Acwa Power Barka has closed a $70m syndicated loan with local banks to fund the second-phase expansion of its independent water and power project (IWPP) in Oman.

The funding has been provided by Bank Muscat and National Bank of Oman, sources tell MEED. The two banks also financed the first phase of the expansion in 2012.The facility carries a 10-year tenor and the first draw-down has already taken place.

The financing plans follow the signing of a water purchase agreement between Acwa Power Barka, the project company led by Saudi Arabia’s Acwa Power International, and the Oman Power & Water Procurement Company (OPWP) on 12 January.

The expansion will add an additional 12.5 million imperial gallons a day (MIGD) to the Barka 1 IWPP.

This will be the second upgrade of the plant’s desalination capacity, with the developer having completed a 10 MIGD expansion in May 2014.

The scheme is one of several desalination projects that OPWP is pushing ahead with in order to keep pace with growing demand for water in the sultanate.

Water production from the IWPP is scheduled to begin in three phases, starting in the third quarter of 2015 and ending in the first quarter of 2016.

The first phase of Barka 1’s expansion was funded via a $45.1m non-recourse financing closed in 2012.  Acwa Power raised the new debt at the same time as securing funding to refinance $190.4m-worth of existing obligations.