ACWA Power consortium achieves Financial Close for Salalah 2 IPP in Oman

The consortium of ACWA Power, Mitsui& Co., Ltd.(“Mitsui”) and Dhofar International Development and Investment Holding Co (DIDIC) has achieved financial close for the development, construction, ownership and operation of a 445 MW high efficiency gas fired power generation plant along with the acquisition of an existing 273 MW natural gas fired power plant “the Salalah 2 IPP”.   This follows the signing of a 15-year Power Purchase Agreement (“PPA”) on April 19th 2015 by Oman Power and Water Procurement Company “OPWP” with the developer consortium of ACWA Power, Mitsui and DIDIC.

The Project debt has been structured as long-term limited recourse project financing and funded by a group of international and regional banks viz. Standard Chartered Bank, Sumitomo Mitsui Trust Bank, KfW IPEX-Bank GmbH, Sumitomo Mitsui Banking Corporation Europe Limited, Mizuho Bank, Ltd., Bank Muscat and Bank Dhofar. 

Paddy Padmanathan, President and CEO of ACWA Power stated “We are happy to achieve this great milestone for the Salalah 2 IPP. Reaching Financial Close on this project once again demonstrates the level of comfort and commitment that international and local banks have for investing in the Sultanate of Oman. We are very enthusiastic to rapidly deliver in the execution and construction of the project in collaboration with our local and international partners.”

The Project will be constructed under a lump-sum turnkey EPC Contract with SEPCOIII Electric Power Construction Corp. In addition, First National Operation & Maintenance Company Limited (“NOMAC”, a wholly owned subsidiary of ACWA Power) shall be responsible for providing operation and maintenance services for the plant. 

Rajit Nanda, Chief Investment Officer at ACWA Power said, “We cherish the trust placed on us by OPWP and look forward to delivering a plant that we can all be proud of which will then enable us to reliably deliver the contracted energy over the full 15 year term of contract”.

ACWA Power established its presence in Oman through its acquisition of Barka1 IWPP in 2010, which is currently listed on the Muscat Stock Market as ACWA Power Barka. Since this acquisition, ACWA Power Barka has been awarded two water desalination expansion projects. 

ACWA Power’s portfolio companies in Oman will now be responsible to deliver over 1,100 MW of power and 193,000 m3/day of desalinated water to OPWP.