Omani and international banks are submitting their commitments for the RO200m ($520m) refinancing of Majan Electricity Company and Dhofar Power Company before the end of March.

The parent company, Electricity Holding Company (EHC), is seeking a 10-year amortising structure, UK news agency Reuters reported in February.

The amortising structure, where the principle is repaid throughout the term, replicates a previous EHC loan for Oman Electricity Transmission Company (OETC), Muscat Electricity Distribution Company (MEDC) and Mazoon Electricity Company in 2015.

Both loans are part of a mandate for US-based JP Morgan and the local Bank Muscat’s investment arm to raise about $2.1bn, signed in 2014. About $1bn of this took the form of an international bond issued by OETC in 2015, the first corporate transaction of this type for Oman. The finance is intended to replace EHC’s short-term borrowing with longer-term finance. The total ticket size to be arranged is not fixed.

The sizes of the international and local tranches for the current transaction will be set based on the banking commitments received.

The previous transaction means the arranging process should be relatively straightforward. A financial close could be reached as early as May, according to one banking source in Oman, so long as they get enough commitments from banks.

Liquidity has tightened significantly in Oman, and banks are being cautious with their lending decisions. Pricing has also risen as a result.

The US’ Moody’s Investors Service assigned A3 long-term issuer ratings to Dhofar Power Company and Majan Electricity Company, with a stable outlook, in line with other EHC subsidiaries.

EHC is also studying privatising MEDC.