Oman could defer next renewables round

MEED    2 April 2020 (Last Updated April 2nd, 2020 15:54)

Oman could defer next renewables round

The Oman Government’s directive to cut project spending this year could further delay the procurement timeline for the sultanate’s next renewable round, which includes the procurement of two solar photovoltaic (PV) schemes in Manah.

Oman Power & Water Procurement Company (OPWP) had expected to issue the request for proposals (RFP) for Manah 1 and 2, which will be developed under the independent power producer (IPP) model in the first quarter.

However, the tender has not been issued so far.

The state utility prequalified nine teams to bid for the contract in December.

The prequalified bidders are:

  • Masdar (UAE) / EDF (France)
  • Eni (Italy) / Softbank Energy (Japan)
  • Acwa Power (Saudi Arabia)
  • Jinko (China)
  • Korea Western Power Company / Hanyang Corporation / Solar Reserve / Nafath Renewable Energy (local)
  • Marubeni (Japan)
  • Power Construction Corporation of China
  • TagEnergy (Nigeria) / Al-Shanfari Group (local)
  • Total Solar International (France)

The Manah 1 and 2 solar PV projects, previously named solar IPP 2022 and 2023 respectively, will have a capacity of 500MW-600MW each. The schemes will be developed at Manah, which is located 150km southwest of the capital Muscat.

MEED understands OPWP plans to award the two contracts to separate bidders.

Indian-based Synergy Consulting is the financial adviser for Manah 1 and 2. The UK’s DLA Piper and Germany’s Fichtner are providing technical and legal advisory services respectively.

Oman is targeting for renewables to contribute between 10% and 16% of the sultanate’s generation capacity in the main interconnected system (MIS) by 2025, which will total to approximately 2,800MW.

The first 500MW is due to come online in 2022.

Safe deal

In May 2019, a consortium led by Saudi Arabia’s Acwa Power signed the project agreements for the planned 500MW Ibri 2 solar IPP. The project developer team reached financial closure for the project on 24 March.

Paddy Padmanathan, CEO of Acwa Power, which leads the consortium that will develop Ibri 2, said he is confident the project will push ahead.

Padmanathan said: “I do not understand what the concern is on Ibri 2. It has achieved financial close.”

The $400m Ibri 2 solar IPP project will be funded on a 70:30 debt to equity ratio.

A syndicate of six international and local lenders will provide the $275m senior debt, according to Acwa Power.

The mandated lead banks include Beijing-based Asian Infrastructure Investment Bank (AIIB), Bank Muscat, Riyad Bank, Siemens Bank, Standard Chartered Bank and Warba Bank.

The debt is structured as a 16.5-year door-to-door tenor.

In February 2019, a consortium led by Japan’s Marubeni signed the power purchase agreement (PPA) to develop a 100MW PV solar project at Amin in the southern region of the sultanate.