ACWA Power notes financial closure on 500MW solar PV plant in Oman
Once complete it will be the largest utility scale solar plant in Oman and will be funded on a debt to equity ratio of 70:30
Saudi Arabia’s developer of power generation and desalinated water plants, ACWA Power, has attained a financial closure of $400m (OMR154m) on Oman’s 500MW Ibri 2 photovoltaic (PV) Independent Power Project (IPP) alongside GIC Pvt Ltd (GIC) and Asia-Pacific Economic Cooperation (APEC).
Touted to be the largest utility scale solar plant in the sultanate, the renewable energy project will be developed on a build-own-operate model for Oman Power & Water Procurement Company (OPWP).
According to ACWA Power, the project will be funded on a debt to equity ratio of 70:30, with the term of the offtake contract for the project being 15 years from the commencement of commercial operations.
A group of six international and local banks will provide the $275m (OMR105.9m) as senior debt for the project. Lead banks under the agreement include Asian Infrastructure Investment Bank (AIIB), Bank Muscat, Riyad Bank, Siemens Bank, Standard Chartered Bank, and Warba Bank.
Together, the six lenders have contributed to the majority of the finance deal on a 16.5 year door-to-door tenor, which means that during this time period the total debt borrowed should be paid back to the banks.
The deal also marks Beijing-headquartered AIIB’s first renewable energy financing in Oman and the GCC.
Speaking about the financial closure, chief executive officer of ACWA Power, Paddy Padhmanathan, said: “Successfully achieving financial closure during these challenging times is a testament to the determination of all the stakeholders in this project to keep doing the best we can within the constraints we all need to work within.”
Meanwhile, chief investment officer of ACWA Power, Ranjit Nanda, said that securing the financial closure during a time when the world is trying to overcome “financial and macroeconomic challenges” amid the spread of COVID-19 showcases ACWA Power’s “structuring capabilities and the resilience of our long lasting partnerships”.
Ibri 1 IPP is located around 300km west of Muscat. At its peak generation capacity, the plant output will fulfill power needs of approximately 33,000 homes, and will offset 340,000 tonnes of CO2 annually.