UPDATE 1-Kuwait selects GE to build $2.65 bln power plant

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KUWAIT Aug 26 (Reuters) - Kuwait has selected General Electric Co (GE.N) to build a $2.65 billion power plant in the north of the country, a government official said on Wednesday.

Both Kuwait's Ministry of Electricity and Water and the central tenders committee have chosen the U.S. giant to build the Subbiya 2,000 megawatt power plant, electricity ministry spokesman Meshan al-Otaibi said.

"It not final yet. There are still more approvals needed," he said. "General Electric had the lowest bid for about 760 million Kuwaiti dinars ($2.65 billion)," he said.

A final approval by two other governmental bodies, including the state audit bureau, is expected within two weeks, he added.

General Electric beat other pre-qualified firms for the projects such as Germany's Siemens (SIEGn.DE), Japan's Mitsui & Co (8031.T) and Marubeni Corporation (8002.T), Spain's Iberdrola Ingenieria Y Construccion (IBE.MC), and Canada's SNC-Lavalin Limited (SNC.TO).

In April, Kuwait issued a new tender to build turbines for the plant in the north of the country, which is due to come on stream in 2011, saying it expected the cost to be far less than earlier estimates in excess of 700 million dinars. [ID:nLM654812]

Peak demand strains the capacity of the power grid in the desert state, where air-conditioning is widely used.

Kuwait, with one of the world's highest per capita power consumption rates, has said it plans to boost power capacity to around 16,000 megawatts from 10,000 MW by 2012. ($1=.2869 Kuwaiti Dinar) (Reporting by Rania El Gamal, editing by Thomas Atkins and Jon Loades-Carter)