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AIIB weighs funding support for Oman’s first solar PV project

The Asian Infrastructure Investment Bank (AIIB), a multilateral development bank with a mandate to support infrastructure development in the Asia-Pacific region, has revealed that it is studying a request for around $60 million in funding support from the developers of Oman’s first utility-scale solar PV project.

Shams Ad-Dhahira Generating Company SAOC, a consortium led by International Company for Water and Power Projects (ACWA Power), has been awarded a license to finance, develop and operate a 500 MW greenfield solar photovoltaic power plant in Ibri in Al Dhahirah Governorate in the west of the country.

The so-called ‘Ibri II Solar PV Independent Power Plant Project’ is being implemented under a Power Purchase Agreement signed by the consortium with Oman Power and Water Procurement Company (OPWP) – the sole buyer of electricity output – in April 2019.

“The total project cost is approximately $400 million, of which the AIIB loan is about $60 million while the rest is to be funded by the sponsors and other financial institutions,” said the Beijing-based international bank in a summary of the proposed transaction made public last week.

It named the borrower as Shams Ad-Dhahira Generating Company SAOC and the sponsors as International Company for Water and Power Projects (ACWA Power), Gulf Investment Corporation (GIC) and Alternative Energy Projects Co (AEPC).

In considering the request for funding support, the bank cited the strategic objectives of the project, which are two-fold: (a) to increase the availability of the renewable power generation capacity and contribute to fill the anticipated gap in the peak demand; and (b) reduce the dependence on gas and other fossil fuels for electricity generation and move to a more balanced and environmentally sustainable energy mix. Importantly, a favourable decision on the funding request will not be the first by AIIB towards an Omani infrastructure project. To date, AIIB’s Board of Directors has already approved up to $504 million in financial assistance for two projects in Oman: the Oman Broadband Project and the Duqm Port Commercial Terminal and Operational Zone Development Project.

Oman was one of 57 founding members of AIIB, which has since grown to 76 members as well as 26 prospective members from around the world.

Last April, a delegation from the Board of Directors of AIIB visited the Sultanate for talks with key officials from both the public and private sectors. They met with senior figures from the Ministry of Finance, Ministry of Transport, Special Economic Zone Authority Duqm (SEZAD), Supreme Council for Planning and Central Bank of Oman.
  • AIIB
  • Funding Support
  • Oman
  • Solar PV Project
  • Investment
  • ACWA Power
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