ACWA and Mitsui close financing for Salalah 2 IPP

The consortium of ACWA Power, Mitsui & Co and Dhofar International Development and Investment Holding Co (DIDIC) has achieved financial close for the development, construction, ownership and operation of a 445 MW high efficiency gas fired power generation plant along with the acquisition of an existing 273 MW natural gas fired Salalah 2 IPP power plant.

This follows the signing of a 15-year power purchase agreement (PPA) last April 19 by Oman Power and Water Procurement Company (OPWP) with the developer consortium of ACWA Power, Mitsui & Co and DIDIC.

The project debt has been structured as long-term limited recourse project financing and funded by a group of international and regional banks; Standard Chartered Bank, Sumitomo Mitsui Trust Bank, KfW IPEX-Bank GmbH, Sumitomo Mitsui Banking Corporation Europe Limited, Mizuho Bank, Ltd., Bank Muscat and Bank Dhofar.

Paddy Padmanathan, President and CEO of ACWA Power, said:

"We are happy to achieve this great milestone for the Salalah 2 IPP. Reaching financial close on this project once again demonstrates the level of comfort and commitment that international and local banks have for investing in the Sultanate of Oman. We are very enthusiastic to rapidly deliver in the execution and construction of the project in collaboration with our local and international partners."

The Project will be constructed under a lump-sum turnkey EPC Contract with SEPCOIII Electric Power Construction Corp. In addition, First National Operation & Maintenance Company Limited (Nomac), a wholly owned subsidiary of ACWA Power, will be responsible for providing operation and maintenance services for the plant.

Rajit Nanda, Chief Investment Officer at ACWA Power, said:

"We cherish the trust placed on us by OPWP and look forward to delivering a plant that we can all be proud of which will then enable us to reliably deliver the contracted energy over the full 15 year term of contract."