The sultanate last month announced the successful closure of
the Al Kamil power project with Al Kamil Power Company, a unit
of the UK?s National Power. This is the second independent
power project (IPP) in the sultanate and is the first deal to
close as part of the government?s current electricity and water
privatisation programme. The project was tendered earlier this
year and is for the design, construction, financing, ownership
and operation of a new 275-MW, open-cycle, gas-fired power
plant at Wilyat, in the Ash-Sharqiya region.
National Power made the lowest bid for the project on the basis
of a 230-250 MW capacity. During negotiations, the government
and National Power agreed to contract for an additional 25-MW
of capacity at no additional cost.
The agreement covers a project life of 15 years, under which
the government will purchase capacity and output of the plant,
and a 15-year natural gas supply agreement, whereby gas will be
supplied to fuel the plant at a price of $1.50/m Btu.
The project company is obliged to offer at least 35% of its
shares to the public in Oman, on the Muscat securities market,
within four years of its incorporation. It has also committed
to implementing a detailed ?Omanisation? plan, which obliges it
to employ and train Omani nationals at all administrative and
technical levels in its organisation. Some 75% of employees are
expected to be Omani citizens by the 15th year of the project.
Oman?s privatisation programme also includes the 400-440 MW
Barka Power and Desalination project, for which bids are due in
early September, and substantial power and water transmission
upgrades, including a new power load dispatch centre.
Under a separate tender by the Ministry of Electricity and
Water on 15 July, a preferred bidder was appointed for the
Sharqiya Transmission project. This will upgrade the power
transmission network in the region and provide interconnection
for the Al Kamil plant to the Northern Oman power grid.
Richard Ingham, of ABN AMRO, which leads the international
consortium advising on the privatisation programme, said: ?We
are continuing to make progress with the restructuring and with
the Barka project, which we expect to close in November.?