Mitsui Engineering plans Tunisia solar plant: sources

TOKYO (Reuters) - Mitsui Engineering & Shipbuilding Co plans to build a solar power plant in Tunisia, targeting a desert solar energy market dominated by European firms, two sources with direct knowledge of the matter said.

Mitsui Engineering aims to build a tower-type concentrated solar power plant (CSP) with 5 megawatts capacity in El Borma in southern Tunisia, following a feasibility study planned early next year, under a joint project of the Japanese and Tunisian governments, said the sources, who requested anonymity because Mitsui Engineering’s selection for the project has not yet been announced.

The company’s shares rose 2.0 percent to 208 yen by midday on Friday, their highest in more than six months and outperforming a 0.4 percent drop in the benchmark Nikkei average, and was on course to post its heaviest trading volume in at least six months.

Mitsui Engineering and the governments will announce the deal during the Japan-Arab Economic Forum scheduled for December 11-12 in Tunis. Japan’s trade minister Akihiro Ohata will attend the meeting, along with executives from more than 100 Japanese oil, trading and engineering companies.

The El Borma plant will be coupled with a 39 MW gas turbine combined-cycle plant, which combines gas and steam turbines to generate power more efficiently.

The Japanese government, which announced initial plans for the project in July, has said operation is expected to start around 2013.

The project, led by Japan’s trade ministry, is aimed at helping Japanese companies gain know-how in CSPs, seen as a key next-generation technology to turn plentiful desert sunlight into electricity.

CSPs employ mirrors to reflect the sun’s rays, producing steam and driving turbines that generate electricity. Mitsui uses reflective towers to concentrate sunlight.

France’s Total, Spain’s Abengoa and the United Arab Emirates’ Masdar plan to build a $600 million CSP in the UAE with capacity of 100 MW, which will be the world’s largest such plant.

The European Union is backing projects to turn sunlight in the Sahara desert into electricity for power-hungry Europe, which it hopes will contribute to meeting its target of deriving 20 percent of its energy from renewable sources in 2020.

The EU is backing the construction of new electricity cables, or interconnectors, under the Mediterranean Sea to carry renewable energy from North Africa to Europe.

Reporting by Yuko Inoue; Editing by Chris Gallagher and Edmund Klamann