Decision due on new IWPP

31 May 2002

The government is moving closer to making a final decision on whether to commission a new independent water and power project (IWPP). Mohammed al-Mahrouqi, acting director-general of private sector affairs, speaking on 28 May at MEED's Power in the Middle East conference in Abu Dhabi, said that final approval for the project could be given in September.

The UK's Mott MacDonaldhas drawn up the initial studies for the plant, which is expected to generate between 400-450 MW of power and process up to 65 million gallons a day of water. The plant, to be located in Sohar's industrial area, is expected to come on stream in 2005 (Oman, MEED Special Report, 26:4:02, pages 31-32).

Oman's other independent power projects (IPPs) commissioned under the government's fast-track privatisation programme are Al-Kamil, Barka and Salalah. These facilities account for some 940 MW of new capacity in total. Al-Kamil is due on stream this year and will be followed in the first quarter of 2003 by Salalah and Barka. The construction of a fourth IPP in Sohar is intended to meet rising demand, which is growing at a rate of 3.6 per cent a year.

The government had considered increasing supplies through the privatisation of the sultanate's three large-scale generating companies that operate the Ghubrah, Rusayl and Wadi Jizzi plants. However, Al-Mahrouqi said there will be no requirement for the successor companies to invest in building additional capacity.

The privatisation of the unbundled assets of the Ministry of Housing, Electricity & Water is expected to begin in early 2003 following the final approval of a sector law governing the regulation of all the key elements of the system, namely: generation, dispatch, procurement and production of electricity and related desalinated water. The government is currently reviewing the third of five draft documents of the legislation. A team of ABN AMRO, Denton Wilde Sapteand Mott MacDonald is advising the government on the privatisation (MEED 22:3:02).

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