meed-logo

line1 line2 line3
SIGN IN / REGISTER

Oman expands grid connectivity

10 December 2023

Oman’s power and water sector has awarded an annual average of approximately $1.5bn-worth of contracts over the past 11 years – a relatively low value compared to the total awarded every year by some of its GCC neighbours.

However, 2023 can still be considered a good year for the sultanate, as contracts worth an estimated $1.2bn have been awarded.

This is an improvement on the performance of the previous two years, which saw very limited project activity within the sector, with contract awards valued at just $104m in 2021 and $244m in 2022.

Having adopted a policy to not procure further gas-fired thermal power plants, Oman awarded the contracts to develop its second and third utility-scale solar photovoltaic (PV) plants in early 2023.

The Manah 1 and 2 solar PV independent power projects (IPPs) each have a capacity of 500MW. Wadi Noor Solar Company, comprising France’s EDF Renewables and South Korea’s Korea Western Power Company (Kowepo), will deliver and maintain the Manah 1 solar IPP project for 20 years.

Another team, comprising Singapore’s Sembcorp Industries and China-headquartered Jinko Power Technology, will develop the Manah 2 IPP scheme. The country’s first utility-scale solar project, Ibri 2, became operational in 2021. 

Oman’s Ministry of Regional Municipalities & Water Resources also awarded a $108m contract for the construction of a flood protection dam in Wadi Ajay Gorge in Muscat in early 2023. The rest of the awarded contracts comprise water and power transmission pipeline projects across the sultanate.

Demand growth

Nama Power & Water Procurement Company (PWP), formerly Oman Power & Water Procurement Company (OPWP),  expects peak electricity demand for the main interconnected system (MIS), the sultanate’s main electricity grid, to grow by an average of 3.54 per cent annually from 2022 to 2029, reaching 8,350MW at the end of the forecast period.

Most of this growth is expected to occur in the near term, as the economy recovers from the effects of the Covid-19 pandemic, according to PWP’s most recent Seven-Year Statement, which covers the years 2023-29. It is also higher compared to the 2.5 per cent average annual peak demand growth rate seen between 2015 and 2022.

PWP’s low-case forecast scenario shows an average annual peak demand growth of 1.3 per cent, with the base growing from 6,628MW to just over 7,200MW. A high-case scenario, on the other hand, indicates an annual demand growth of 5.2 per cent, which can drive the demand to reach 9,430MW.

Annual peak demand growth in the smaller Dhofar grid is expected to average 5 per cent between 2022 and 2029.

The first phase of Oman’s North-South Interconnection project, known as Rabt, became operational in November. The 400-kilovolt (kV), 670-kilometre (km) project required an investment of about $966m.

The first phase of Oman’s North-South Interconnection project, known as Rabt, became operational in November

The project enables the MIS, serving the northern half of the Oman grid, to connect with Nihada in Al-Dhahirah Governorate and Duqm Special Economic Zone (SEZ) in Al-Wusta Governorate.

Al-Wusta offers an optimal location for solar and wind projects, which the country aims to develop as part of its green energy ambitions.

Also part of Rabt's first phase, the isolated networks of Petroleum Development Oman and the Rural Areas Electricity Company (Tanweer) in Duqm SEZ, have been interconnected.

A second phase is being planned for Rabt. To be launched later this year, it will comprise a 500km, 400kV transmission line from Duqm to Dhofar.

Water requirements

Peak water demand in the MIS is expected to increase by an average of 2 per cent annually between 2022 and 2029, while peak water demand in Dhofar is expected to grow by an average of 7 per cent a year.

To meet the expected demand rise in the MIS, several independent water projects are being developed or planned. These include the Barka 5 scheme, which has a capacity of 100,000 cubic metres a day (cm/d) and is expected to come online in 2024. Ghubrah 3, which has three times as much capacity, is expected to be operational two years later.

A third project, a replacement capacity for the Barka zone of about 102,000 cm/d, is also expected to be added in 2024.

Future projects

In addition to the second phase of Rabt, Oman is in the early procurement phase of several solar and wind projects, in line with meeting demand growth and replacing expiring contracted capacity.

The power and water purchase agreement for the gas-fired Barka 2 independent water and power facility, for instance, expires in 2024, while the contract for the Barka 3 IPP expires in 2028.

KPMG Lower Gulf, a subsidiary of the Netherlands-based consultancy company, has been selected to provide financial advisory services to Nama PWP for the Ibri 3 solar IPP, which will have a capacity of 500MW. Ibri 3, along with the planned 100MW Jalaan Bani Bul Ali wind power project, will cater to the MIS.

Another key scheme being planned to connect to the MIS is Oman’s first waste-to-energy plant in Barkah. When complete, the facility is expected to treat 4,500 tonnes of municipal waste a day, produce 130MW-150MW of energy, and reduce the carbon footprint of Oman's landfills by 1.3 million tonnes annually.

For the Duqm grid, a 100MW wind IPP is being planned, in addition to a potential concentrated solar power plant. These plants are expected to become operational in 2026 and 2028, respectively. A 100MW wind project is also being planned for Dhofar, although there has been no fixed target for when it is expected to become operational.

In May, it was also announced that Oman Electricity Transmission Company is planning a second link to the GCC grid. The planned 400kV power transmission link is scheduled to start operations in the first quarter of 2026.

Hydrogen hubs

There are major plans to develop green hydrogen hubs in Duqm and Dhofar, in line with Oman's ambition to produce up to 1.25 million tonnes a year of green hydrogen by 2030.

The proposed projects will integrate renewable energy plants that will supply power to the electrolyser plants, which split water into hydrogen and oxygen, as well as the other units of the facilities.    

The government has so far awarded land concessions to international consortiums looking to develop integrated green hydrogen and ammonia facilities in the country.

The programme will have a potentially significant impact in terms of Oman’s future gross renewable energy capacity growth, with some of the earliest announced projects requiring several gigawatts of wind and solar power.

However, since most of the planned projects include captive renewable energy power plants, they will not necessarily affect the Omani utility companies' future capacity procurement plans. 

On the other hand, water demand may be affected as the electrolysis plants require pure water to be split into hydrogen and oxygen.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11354723/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Jordan tenders IPP8 power project

    14 July 2026

    Jordan’s National Electric Power Company (Nepco) has issued a tender for a contract to develop the 700MW combined-cycle gas turbine (CCGT) power project known as independent power project 8 (IPP8).

    Companies understood to have prequalified include France’s EDF, Saudi Arabia’s Acwa and Egypt’s Orascom Construction. Bids are due in July, although the market expects the closing date may be extended.

    MEED reported in November last year that Nepco had invited developers to submit prequalification documents for IPP8. The project will be developed on a build, own and operate (BOO) basis and will supply power to the national grid under a 25-year agreement.

    Natural gas will serve as the primary fuel, with light distillate as backup. The facility will be connected to Nepco’s 132kV/400kV transmission infrastructure, which will be built separately.

    In April, MEED reported that Nepco had signed an agreement to establish a natural gas supply point for the 700MW IPP7. The agreement was signed with Fajr Jordanian-Egyptian for Natural Gas Transmission and Supply to support fuel provision for the CCGT plant.

    The plant will be developed in partnership with Etihad Development Company, a subsidiary of the UAE’s Etihad Water & Electricity (EtihadWE), following recent approval by the Ministry of Energy & Mineral Resources.

    The IPP7 plant is expected to meet about 10% of Jordan’s electricity demand once operational. It is also intended to enhance the reliability and efficiency of the national power system.

    The project is scheduled to become operational between 2027 and 2028.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17662814/main.jpg
    Colin Foreman
  • AtkinsRealis wins key Riyadh infrastructure roles

    14 July 2026

    Canadian engineering firm AtkinsRealis has been awarded a contract by the Royal Commission for Riyadh City (RCRC) to support the operation and expansion of the Riyadh Metro and oversee the delivery of major road infrastructure projects across the capital.

    AtkinsRealis will provide engineering consultancy, project management, construction supervision and technical oversight for ongoing works on the Riyadh Metro.

    The agreement was signed during the Saudi Arabia-Canada Investment Forum in Jeddah, held on the sidelines of Canadian Prime Minister Mark Carney’s visit to the kingdom.

    The company will also supervise a portfolio of strategic road development schemes designed to strengthen Riyadh’s wider transport network.

    AtkinsRealis also recently secured a contract to deliver lead design services for the Place & Planet Pavilion at the Expo 2030 Riyadh site.

    The contract was awarded by Expo 2030 Riyadh Company, which is tasked with delivering the Expo 2030 Riyadh venue.

    AtkinsRealis will deliver the full architectural and engineering design for the pavilion, coordinate all relevant design disciplines and embed sustainable design principles throughout.

    The Place & Planet Pavilion is anticipated to be a key attraction at Expo 2030 Riyadh.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17660065/main.jpg
    Yasir Iqbal
  • Clarifications begin for Saudi Landbridge Riyadh section

    14 July 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia Railways (SAR) has begun post-tender clarifications with bidders for a contract to design and build the Riyadh Rail Link, a new north-to-south railway line across the capital.

    MEED understands that the latest round of clarifications with bidders was held last week.

    Contractors submitted their commercial proposals on 30 June, as MEED reported.

    The bidders include:

    • China Civil Engineering Construction Corporation / Al-Ayuni Investment & Contracting (China/local)
    • Nesma & Partners / China Harbour Engineering Company (local/China)
    • Al-Rashid Trading & Contracting / IC Ictas Construction / Saipem (local/Turkiye/Spain)
    • Saudi Binladin Group (local)

    The scope includes a 35-kilometre double-track line connecting SAR’s North-South Railway to the Eastern Railway network.

    Issued on 29 January, the tender also covers the procurement, construction and installation of associated infrastructure, including viaducts, civil works, utility diversions/installations, signalling systems and other related works.

    Once delivered, the Riyadh Rail Link is expected to become a key component of the Saudi Landbridge railway.

    In January, SAR said it would deliver the Saudi Landbridge project through a “new mechanism” by 2034, after failing to reach an agreement with a Chinese consortium to construct it, as MEED reported.

    In an interview with local media, SAR CEO Bashar Bin Khalid Al-Malik said the consortium failed to meet local content requirements, and that the project would instead be delivered in several phases under a different procurement model.

    Negotiations have been under way between Saudi Arabia and China-backed investors interested in developing the scheme through a public-private partnership (PPP). Al-Malik put the project cost at about SR100bn ($26.6bn).

    Overall, it comprises more than 1,500km of new track. A core element is a 900km railway between Riyadh and Jeddah, providing the capital with direct freight access to King Abdullah Port on the Red Sea.

    Other key elements include upgrading the existing Riyadh-Dammam line, a bypass around the capital known as the Riyadh Link, and a connection between King Abdullah Port and Yanbu.

    The Saudi Landbridge is one of the kingdom’s most anticipated project programmes. First announced in 2004, it was put on hold in 2010 before being revived a year later. Rights-of-way issues, route alignment and the high cost have been among the main stumbling blocks.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17659657/main.jpg
    Yasir Iqbal
  • Contractors win $213m King Salman airport deal

    14 July 2026

     

    Register for MEED’s 14-day trial access 

    A joint venture of Beijing-headquartered China Civil Engineering Construction Corporation and Dammam-based Mofarreh AlHarbi & Partners has won an estimated SR800m ($213m) deal to undertake the enabling and substructure works for Terminal 6 at King Salman International airport (KSIA) in Riyadh.

    The contract was awarded by King Salman International Airport Development Company (KSIADC).

    In March, MEED exclusively reported that KSIADC had selected three groups for the main construction of Terminal 6.

    KSIADC, which is backed by Saudi sovereign wealth vehicle the Public Investment Fund, will initially deliver the Terminal 6 main works on an early contractor involvement basis.

    The latest development follows KSIADC’s receipt of prequalification statements from contractors on 1 July for two new packages at KSIA.

    These include the construction of a permanent East-West corridor and landside access roads serving the North and South terminals.

    In May, KSIADC selected three groups to deliver the Terminal 6 apron, taxiways and other airfield infrastructure at KSIA.

    MEED reported in May 2025 that US firm Bechtel Corporation had been appointed as the delivery partner for the terminals at KSIA.

    Terminal 6 will boost the airport’s capacity by 40 million passengers.

    The project is expected to be delivered before the start of Expo 2030 Riyadh.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17659431/main.jpg
    Yasir Iqbal
  • I Squared eyes $2bn deployment across PIF portfolio

    13 July 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia's Public Investment Fund (PIF) has signed a memorandum of understanding (MoU) with US infrastructure investor I Squared Capital, under which the firm will pursue the deployment of up to $2bn in real estate and infrastructure assets owned by the sovereign fund and its portfolio companies.

    The non-binding agreement, announced on 13 July, will see the two work with PIF portfolio companies to identify opportunities in digital infrastructure and district cooling, which the parties describe as critical enablers of the real estate sector. I Squared will target allocating up to $1bn in each of the two areas, with the option to scale across additional related business themes.

    The MoU aligns with PIF's 2026-30 strategic objectives to partner with global investors on opportunities within its portfolio and to maximise the value of its portfolio companies. The collaboration is expected to accelerate project delivery and increase the contribution of third-party capital into opportunities across the portfolio.

    Founded in 2012 and headquartered in Miami, I Squared Capital manages $60bn in assets across power and utilities, transport and logistics, digital infrastructure, and environmental and social infrastructure. Its portfolio includes more than 100 companies operating in over 70 countries.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17655682/main2812.png
    Colin Foreman