Saudi Arabia’s energy giant ACWA Power, along with the Gulf Investment Corporation (GIC) and Asia-Pacific Economic Cooperation (APEC), has achieved the financial closure for a 500 MW solar independent power project (IPP) at Ibri in the Sultanate of Oman.

Ibri is also the largest utility-scale solar project in the country.

According to the ACWA’s press statement, the $400 million project will be funded on a debt to equity ratio of 70:30. The term of the offtake contract for the project will be 15 years from the commercial operation date (CoD).

“A syndicate of six international and local lenders will provide the $275 million senior debt. 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 tenure,” states the company.

Door-to-door tenure means the period within which the total debt borrowed is to be paid back by the borrower to the lender. The deal also represents the first renewable energy financing in Oman as well as the Gulf Cooperation Council (GCC) region by AIIB.

Speaking on the occasion, Paddy Padmanathan, chief executive officer of ACWA Power, said that the successful 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.”

The 500 MW Ibri II solar project will be developed on a build, own, and operate (BOO) basis. The project will utilize cutting-edge solar PV technology to generate renewable power.

As per the company statement, at peak generation capacity, the project’s output will be enough to supply approximately 33,000 homes with electricity and will offset 340,000 tons of carbon dioxide emissions a year.

Rajit Nanda, a chief investment officer of ACWA Power, said, “The project which is the largest utility-scale solar PV project in Oman will also be the first renewable energy financing for AIIB in the GCC region, paving the way for a stronger partnership with the Beijing based international multilateral bank in the future.”

In February 2020, Mercom reported that the Asian Infrastructure Investment Bank offered a loan of $60 million (~₹4.3 billion) for a 500 MW solar project located at Ibri.

 Earlier, it was reported that a consortium of Kuwait and Saudi Arabian companies won the bid to develop 500 MW of large utility-scale solar IPP located at Ibri. In November, Oman Power and Water Procurement Company received bids from three international consortia for the $400 million solar project.

Image credit: Azure Power