Bank financing for the planned independent power project to be closed by end of year
The Oman Power & Water Procurement Company (OPWP) is due to finalise a tariff model for the planned independent power project (IPP) in the Musandam governorate within the coming weeks.
Once a tariff scheme is in place, negotiations between the banks and sponsors will move forward, with the aim of being concluded by the end of the year, according to a source.
Approximately $200m-worth of debt financing is expected to be raised to support the construction of the gas-fired plant, which is expected to have a capacity of 100-120MW.
A preferred engineering, procurement and construction (EPC) contractor has been selected for the project, but its confirmation remains subject to final regulatory approval. The prequalification process was concluded in April 2013.
The project sponsor, the Musandam Power Company, is a joint-venture of the Oman Oil Company and South Koreas LG International Corporation. The plant will be developed under the supervision of the OPWP.
The project forms part of Omans strategy to lessen Musandams reliance on diesel-fired power generation. The governorate currently relies on small diesel-fired units, which may be retained for back-up security once the gas-fired power plant is operational.
The project is expected to be completed by October 2016, according to the OPWP.
The Musandam Governorate anticipates power demand to increase in the coming years as the regions economy grows and the tourism industry develops.
Average hourly demand is forecast to grow from 35MW in 2014 to 53MW in 2020, an average increase of 7 per cent a year, according to its expected demand forecasts published in OPWPs seven-year statement 2014-2020.
Peak demand is anticipated to grow by 7 per cent per year, from 65MW in 2014 to 98MW in 2020.
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