Creative renewable project structuring from Kuwait

Kuwait

Hassan Qasem, CEO of Alternative Energy Projects Company (AEPCo), talks to The Energy Year about the company’s successful lease model for solar assets and the growing appetite for renewable energy systems in Kuwait’s private sector. AEPCo is a project development company that designs, builds, finances and operates renewable energy assets.

AEPCo announced three renewable energy agreements during Kuwait Sustainable Energy Week 2025. How do they fit with AEPCo’s strategy and Kuwait’s energy transition?
We have a material supply agreement with Shajara Sustainability Solutions (3S) for a 4-MW project and are developing Kuwait’s first privately leased PV system at Jaber Mall. The third agreement is with a consortium led by Gulf Paramount for Electrical Services Company, which also includes the Commercial Bank of Kuwait (Al-Tijari), to develop a renewables project that will generate 59 GWh per year.
These agreements demonstrate leadership and aim to catalyse market evolution. Kuwait faces a serious power deficit – something we have been warning about for years. Infrastructure is lagging behind the country’s growth, and it will take years – not months – for new power plant projects to meaningfully reduce the deficit, as demand is projected to grow further due to new housing and industrial developments.
All of Kuwait’s current solar and conventional capacity does not come close to the projected 17 GW needed for growth. Plans in place only target around 9 GW by 2035. The 59-GWh project we announced aggregates about 30 MW of solar across various private clients, including malls, factories and residential buildings. That is more than what the government has achieved recently, with only 10 MW of PV installed in Shagaya.
We are stepping up to show that the private sector has an appetite for solar. It is an uphill climb because Kuwait’s heavy energy subsidies have dulled incentives for energy efficiency. Our initiatives tell the market and the government: “We are ready.”

Can you explain the lease model behind the solar installation at Jaber Mall for J2, and how it can impact Kuwait’s private renewables space?
Jaber Mall is a joint venture between Alargan International Real Estate and Combined International Real Estate that emerged as part of a new city development. The project is under a BOT [build-operate-transfer] structure, but we are embedding a B2B lease model into it. That means we own and operate the solar plant and lease it to our client for 20 years, while covering everything from financing to maintenance.
Such leases are our core model in Saudi Arabia, Jordan and Oman, where the tariff structures make it naturally feasible. In Kuwait, we have had to be creative due to the low electricity tariffs and regulatory ambiguity. We are incentivising clients by offering them rights to any future energy price adjustment benefits – something we don’t offer in other markets.
We are the only core developer applying this structure in Kuwait right now. If adopted more widely, it could revolutionise how private energy systems are developed in the country.

What’s the status of the 59-GWh renewables project?
That group of distributed projects started generating power in Q3 2024 and contributes about 30 MW in total. We expect all systems to come on line by Q2 2026 – half are operational, and the rest are on track.
We are a private player that moves quickly. Once agreements are in place, we execute. We have told the government that we can deliver large projects within months, but we need policy clarity. Currently, we are not allowed to sell to the grid or offset total consumption. Regulation limits what we can do, but we are still moving forward.

How is AEPCo positioning itself with major public IPPs such as Shagaya’s 1.1-GW project and the 500 MW planned for Phase III?
We have been partners with major developers and participate together in large projects where we are bidding for numerous IPPs. The newly announced 500-MW project is smaller.
Our strategy is simple: whenever a project is released in Kuwait, we try to be part of it. Our involvement also extends beyond bidding for projects; we are embedded in partnerships and can participate in shaping how projects evolve.

How much potential does Kuwait offer for AEPCo’s business goals?
We are monitoring the boom in data centres in Kuwait. Companies are building major data hubs that will require clean power, and their challenge to decarbonise aligns with ours, so we see that as a future opportunity.
Kuwait is our home, and we will always try to be part of any local opportunity, but it is a small market compared to Saudi Arabia or Oman. Our growth depends on how much capacity the government and the K-companies are willing to pursue. They have hinted at requirements as high as 18 GW, but no concrete plans have materialised.
We can’t afford to wait. While Kuwait is strategic, most of our active pipeline is in Saudi Arabia, Oman and Jordan. The Jordanian market is approaching saturation, but it remains key for us.
Regionally, we installed at least 100 MW in 2024. In 2025, we expect more than 1.5 GW in Kuwait and Jordan, where 100 MW are ready to come on line in 2025 and 200 MW are soon to be tendered. In Oman, we plan to close 150 MW in lease-based projects.
Sustainability and decarbonisation are not optional – they are obligations. Climate change isn’t theoretical; it is happening, and if we don’t act now, we will pay the price and pass the burden to future generations. It’s time to lead.

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