Saudi-based Acwa Power said its consortium with Gulf Investment Corporation (GIC) and Alternative Energy Projects Company (AEPC) has achieved the financial closure for the 500 MW Ibri II solar project in Oman.

This $400-million independent power project (IPP), which is being developed on a BOO (build, own, operate) basis, will become Oman’s largest utility-scale solar photovoltaic (PV) project. It will be funded on a debt to equity ratio of 70:30.

Under a key agreement, a syndicate of six international and local lenders, will provide the $275 million senior debt to the consortium.  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 largest utility scale solar PV project in Oman on a 16.5 year door-to-door tenor.

This deal also represents the first renewable energy financing in Oman as well as the GCC region by AIIB, the Beijing-headquartered international multilateral development bank, it stated.

Acwa Power CEO Paddy Padmanathan said: “We are pleased to partner with GIC and AEPC on the largest utility-scale solar IPP in Oman. This milestone further asserts our commitment to provide low-cost and sustainable electricity supply solutions to our esteemed clients like the Oman Power and Water Procurement Company.”

“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,” stated Padmanathan.

On completion, the Ibri II project will utilise cutting-edge solar photovoltaic technology to generate 500 MW 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, said Acwa Power.

Located around 300 km west of 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 start of commercial operations, it added.