ACWA Power consortium closes financing for 500MW power project in Oman


A consortium of Saudi Arabia-based ACWA Power, Gulf Investment Corporation and Alternative Energy Projects Co. (AEPC) has secured financing for the 500MW Ibri II solar photovoltaic (PV) independent power project (IPP) in Oman.

Located around 300km west of Muscat, Ibri-2 IPP is touted to be the largest utility-scale solar plant in the country. A group of six international and local lenders will provide the $275m senior debt.

Estimated to cost about $400m, the project will be financed on a debt to equity ratio of 70:30.

The project will be developed on a build, own, operate basis. It will feature solar photovoltaic technology to generate 500MWac of power.

At its peak, the plant will produce enough electricity to power nearly 33,000 homes and avoid 340,000 tonnes of CO2 emissions per annum.

The mandated lenders, including Asian Infrastructure Investment Bank (AIIB), Bank Muscat, Riyad Bank, Siemens Bank, Standard Chartered Bank and Warba Bank, helped structure the utility-scale solar PV project in Oman on a 16.5-year door-to-door tenor.

The duration of the offtake contract for the project will be 15 years from the date of commencement of operations.

ACWA Power CEO Paddy Padmanathan said: “We are pleased to partner with GIC and AEPC on the largest utility-scale solar IPP in Oman. This milestone further asserts our commitment to provide low cost and sustainable electricity supply solutions to our esteemed clients like the Oman Power & Water Procurement Company (“OPWP”).

“Successfully achieving financial closure during these challenging times is a testament to the determination of all the stakeholders in this project to keep doing the best we can within the constraints we all need to work within.”

ACWA Power chief investment officer Rajit Nanda said: “We are pleased to achieve a successful closing of yet another financing in Oman which is a key country for ACWA Power’s operations in the Middle East.

“Achievement of this milestone together with our partners – co-shareholders, contractors and the bank group comprising of international and local banks - notwithstanding the trying financial and macroeconomic challenges prevalent the world over resulting from the COVID-19 outbreak demonstrates our structuring capabilities, the resilience of our long-lasting partnerships and our commitment to OPWP.

“The project which is the largest utility-scale Solar PV project in Oman, will also be the first renewable energy financing for AIIB in the GCC region, paving the way for a stronger partnership with the Beijing based international multilateral bank in the future.”


Image: At its peak, the plant will produce enough electricity to power nearly 33,000 homes. (Credit: ACWA Power)

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