Oman finalises advisory team for coal IPP

19 November 2017
Oman is planning to develop its first coal-fired power plant in partnership with the private sector

Oman Power & Water Procurement Company (OPWP) has finalised the advisory team for its planned coal-fired independent power project (IPP).

According to sources close to the scheme, the UK’s EY (Ernst & Young) has been appointed as financial adviser, with Finland’s Poyry awarded the technical services mandate and the UK’s Gowling WLG awarded the legal advisory role.

OPWP received proposals in May for the financial and commercial advisory roles on the scheme, before receiving legal advisory proposals in July.

If the project goes ahead, it will be Oman’s first coal-fired power plant. OPWP had previously considered developing coal-fired power plants in the sultanate. In 2009, an advisory team of WorleyParsons of Australia and Netherlands-headquartered KPMG was selected for a proposed 1,000MW coal-fired IWPP at Duqm. Although coal was ranked the following year by the UK’s Mott MacDonald as the most economic feedstock available, the coal-fired option was dropped on environmental grounds.

The state utility company’s decision to look at coal again may have been influenced by the successful tendering and award of the contract for the GCC’s first coal-fired power plant in Dubai in 2016.

The GCC’s first coal-fired power plant is being developed under the IPP model, with the developer consortium having signed a 25-year power purchase agreement (PPA) with Dubai Electricity & Water authority (Dewa).

MEED reported in September that the project company had reached financial close for the $3.4bn scheme. The coal project will be funded by debt of $2.5bn and equity of $650m, according to sources close to the scheme.

The majority of the debt, about 78 per cent, is being raised from Chinese banks. Industrial and Commercial Bank of China (ICBC), China Construction Bank, Agriculture Bank of China and Bank of China are all participating in the transaction.

Fewa, the utility provider for the Northern Emirates in the UAE is also planning to develop a large coal-fired power plant.

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