Oman Power and Water Company (OPWP) has awarded the contract to build a 2,000MW independent power project (IPP) at Sur to a consortium of Japan’s Marubeni Corporation, Qatar Water & Electricity Company (QEWC), Japan’s Chubu Electric Power and the local Multitech, a subsidiary of Bahwan Engineering Group.
The contract was signed on 15 July and the group is now finalising the financing for the $1.6bn project
The contract was signed on 15 July and the group is now finalising the financing for the $1.6bn project. About $400m will be supplied in equity by the four sponsors. Marubeni is the largest stakeholder with a 50 per cent share; Chubu has 30 per cent, while QEWC holds 15 per cent and Multitech has 5 per cent.
Roughly $1.2bn debt will be required, of which Japan Bank for International Cooperation (JBIC) is expected to supply 50-60 per cent. The remaining 40-50 per cent will be secured from commercial lenders.
The UK’s Standard Chartered, Germany’s KfW, Japan’s Bank of Tokyo-Mitsubishi and Japan’s Mizuho have all committed to the financing.
The Marubeni group was selected to build Sur IPP over the following rival bids (MEED 9:3:11):
- Mitsui & Company (Japan) / Abu Dhabi National Energy Company (UAE) / Oman Oil (local)
- Sembcorp Utilities (Singapore)
- Enka (Turkey)
- Siemens (Germany) / Saudi Oger (Saudi Arabia) / Korea East West Power Company (South Korea)
The Marubeni team was selected as preferred bidder with Mitsui and Siemens as joint reserve bidders. Marubeni will need to bring 400MW of power capacity online by the summer of 2013 as part of its contract with OPWP, in order to help the country meet its peak demand during the hot months. Full commissioning is scheduled for the following summer.
Sur is located south of the capital, Muscat, on the coastline and offers a large area ready for construction, as well as access to an existing pipeline that feeds the Oman LNG plant operating on the outskirts of the site.
The advisory team selected to work on the shelved Al-Ghubrah plant was transferred to the Sur IPP in July. This team comprises the UK’s Ernst & Young, DLA Piper, British Power International and Glen House Capital Strategies.