Ownership of Middle East’s first IPP transferred to Omani government

Ownership of Middle East’s first IPP transferred to Omani government

7 May 2020

The Manah IPP was the first concluded independent power project (IPP) in the Middle East when the power purchase agreement (PPA) was signed in 1994

Ownership of Oman’s Manah independent power project (IPP), the first privately financed power project in the Middle East, has been transferred to the government.

Transfer of the ownership of the power plant to the government on 1 May followed the expiration of the power purchase agreement (PPA) between the United Power Company (UPC), the special purpose vehicle set up to develop and operate the plant, and the Oman Power & Water Procurement Company (OPWP), the offtaker for electricity and water in the sultanate.

The Manah IPP had been developed under a build-own-operate-transfer (BOOT) model, with the PPA for the 264MW IPP signed in 1994.

In 2017, OPWP had announced it was planning to negotiate an ancillary services agreement, under which the PPA would be extended beyond the transfer date of 1 May 2020.

Oman pioneered the IPP model in the GCC with the award and execution of the Manah project, which began operations in 1996. The sultanate then relaunched its private utilities programme in 2000, and has since awarded a number of IPPs, independent water and power projects (IWPPs) and more recently independent water projects (IWPs).

Most recently, in 2019 OPWP awarded a contract to a consortium of Saudi Arabia’s Acwa Power, Kuwait’s Gulf Investment Corporation (GIC) and Alternative Energy Projects Company (AEPC) to develop the 500MW Ibri 2 photovoltaic (PV) solar IPP.

In March this year, the Acwa Power consortium reached financial close for the $400m Ibri 2 project.

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