Consortium signs agreements for Oman IPP

02 March 2016

Split-site power project will be sultanate’s largest independent power scheme

A consortium of Japan’s Mitsui and Saudi Arabia’s Acwa Power has signed the power purchase agreement (PPA) for the 3,150MW Ibri/Sohar 3 independent power project (IPP) in Oman.

The team signed the PPA on 1 March.

MEED reported in January that the project owner, Oman Power & Water Procurement Company (OPWP), had selected the Mitsui/Acwa consortium as preferred bidder for the scheme.

Mitsui has the majority share in the winning consortium, with 50.1 per cent ownership. Acwa Power holds 44.9 per cent and the local Dhofar International Development & Investment Holding the remaining 5 per cent.

The Ibri/Sohar 3 scheme will be split between two sites in Sohar and Ibri. The plants are being tendered as one developer contract, but a separate special-purpose vehicle (SPV) will be formed for each plant. The Sohar facility will have a generation capacity of 1,700MW, and the Ibri plant will have a total capacity of 1,450MW.

The preferred bidder saw off competition from two other groups, led by the UK/France’s Engie and Japan’s Marubeni. The three groups had submitted tender clarifications on 1 November, after submitting commercial proposals on 30 August.

The IPP is part of the government’s efforts to meet rising demand for power in the Main Interconnected System (MIS), the sultanate’s main grid, and follows on from the Sur IPP, which added 2,000MW to the MIS grid when it was commissioned at the end of 2014.

OPWP estimates that peak demand in the MIS will grow at about 9 per cent a year, from 5,122MW recorded in 2014 to reach 9,530MW in 2021.

The consortium of Acwa Power and Mitsui was also successful in winning the deal to develop the Salalah 2 IPP in Oman’s southern Dhofar governorate in 2015.

MEED reported on 25 August that the team of Mitsui and Acwa Power had reached financial close on the Salalah 2 IPP and secured project finance of about $450m. The new 445MW plant is estimated to cost $620m.

China’s Sepco 3 will be the consortium’s engineering, procurement and construction (EPC) contractor. The facility is scheduled for commissioning in January 2018.

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