Oman’s Electricity Holding Company (SAOC), a member of Nama group, recently completed the sale of the Dhofar Generating Company in Salalah with the shares transfer in the Muscat Securities Market.
With this, the control of Dhofar Generating Company (SAOC) has transferred from the Ministry of Finance and Electricity Holding Company to the new shareholders, who have appointed new board members.
The successful buyer is Mitsui & Co in consortium with Acwapower and Dhofar International Development & Investment Holding (SAOG).
The completion of the sale provides for the development of the new Independent Power Project at Salalah (the Salalah 2 IPP). DGC, under the new owners, have committed to extend the capacity of the existing power plant by 445 MW designed to meet the needs of the Dhofar Governorate from 2018.
The scope of the Salalah 2 IPP Project includes the design, construction, ownership, operation of a new high efficiency CCGT which will extend the current power capacity of 273 MW to around 718 MW.
With the sale, there are new provisions for the Power Purchase Agreement and an update to the Usufruct Agreement relating to the Site, the Usufruct Agreement relating to the Temporary Areas and the Natural Gas Sale Agreement which were effective from April 19. The power purchase agreement will have an extended term of 15 years from the date of operation of the new Salalah 2 IPP and the new plant is planned to enter into commercial operation by January 1, 2018.
The Oman Power and Water Procurement Company (SAOC) will remain the off taker of electricity for this project. By completing this transaction, SAOC will be able to secure sufficient capacity in the Dhofar Power System on the high case demand beyond 2021.
The Salalah system already includes the privately owned Sembcorp Salalah Power & Water Company operating since May 2012. The Sembcorp Salalah Power & Water Company completed its IPO and entry to the Muscat Security market on 8 October 2013.
The Salalah system will also be connected to the first renewables project in Oman; the new wind farm will be located at Harweel near Thumrait and is currently out for the EPC bid. The project operation will be led by Rural Area Electricity Company (RAECo) with 50 MW of capacity from 2017.
Source: Trade Arabia