A consortium consisting of ACWA Power, GIC and AEPC has achieved financial closure for its 500MW solar PV Independent Power Project (IPP), the largest utility scale solar plant in the sultanate of Oman.
The $400m project will be funded on a debt to equity ratio of 70:30. A syndicate of six international and local lenders will provide the $275m senior debt.
The mandated lead banks, including Asian Infrastructure Investment Bank (AIIB), Bank Muscat, Riyad Bank, Siemens Bank, Standard Chartered Bank and Warba Bank, helped structure the project in Oman on a 16.5-year door-to-door tenure.
The deal represents the first renewable energy financing of its kind in Oman by AIIB, the Beijing headquartered international multilateral development bank.
ACWA Power chief executive Paddy Padmanathan said: “This milestone further asserts our commitment to provide low cost and sustainable electricity supply solutions to 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 stake holders 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 Oman is a key country for ACWA Power’s operations in Middle East.
Nanda added: “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 500 MWac Ibri 2 solar project based in Ibri will be Oman’s largest utility-scale solar PV Independent Power Project to date.
The project, to be developed on a build, own, operate basis, will utilise cutting-edge solar PV technology to generate 500MW of renewable power.
At peak generation capacity, the plant output will be enough to supply an estimated 33,000 homes with electricity and will offset 340,000 tonnes of carbon dioxide emissions a year.
Located around 300km west of the Omani capital Muscat, Ibri-2 IPP will contribute towards increasing power supplies in the Sultanate.
The term of the offtake contract for the project will be 15 years from the commercial operations date.