Consortium signs contract for 3,219MW Oman IPP

15 May 2016

Power project will be split over two sites

A consortium of Japan’s Mitsui and Saudi Arabia’s Acwa Power has signed the final contracts for the 3,219MW Ibri/Sohar 3 independent power project (IPP) in Oman.

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.

The contracts were signed at an official signing ceremony in Muscat on 15 May.

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 consortium has entered into a 15-year power purchase agreement (PPA) with OPWP.

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.

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 1,710MW, and the Ibri plant will have a total capacity of 1,509MW.

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