The board of directors of Asian Infrastructure Investment Bank (AIIB) have signed a $60m (€55m) loan as part of a $400m financing deal for a 500MW photovoltaic project in Oman.
The loan for the Ibri 2 solar site is the bank’s first non-sovereign-backed financing in the Gulf state’s renewable energy sector.
AIIB vice president DJ Pandian said: “AIIB’s investment will increase the availability of Oman’s renewable power generation capacity and contribute to filling the anticipated gap in peak demand.
“The project will also help the country move toward a more balanced and environmentally sustainable energy mix to ensure long-term energy sustainability.”
A special purpose company established by ACWA Power, Gulf Investment Corporation and Alternative Energy Projects is developing the clean power plant, located in Ibri, around 300km west of the Omani capital Muscat.
The term of the offtake contract for the project will be 15 years from the commercial operations date.
Oman has one of the highest solar densities in the world. Currently, almost all the installed electricity capacity in Oman is fuelled by natural gas.
The project is in line with AIIB’s energy sector strategy in reducing the carbon intensity of energy supply and “catalysing private capital investment” in renewable energy infrastructure.
AIIB’s involvement will ensure the use of high environmental and social standards in the project, the bank said.