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
  • Dewa raises Empower stake in $1.41bn deal

    12 February 2026

    Dubai Electricity & Water Authority (Dewa) has announced it has increased its stake in Emirates Central Cooling Systems Corporation (Empower) from 56% to 80%.

    The transaction was completed through the purchase of 2.4 billion shares and the transfer of the entire ownership of Emirates Power Investment (EPI), which is wholly owned by Dubai Holding.

    The total value of the deal is AED5.184bn ($1.41bn).

    Empower currently holds over 80% of Dubai’s district cooling market and operates 88 district cooling plants across the emirate.

    According to MEED Projects, the UAE’s district cooling sector currently has nine projects worth $1.29bn in the pre-execution phase.

    Empower has ownership in four of these projects, which have a combined value of $472m.

    This includes a $200 million district cooling plant at Dubai Science Park, with a total capacity of 47,000 refrigeration tonnes serving 80 buildings.

    Empower signed a contract to design the plant last August, with construction scheduled to begin by the end of the first quarter of 2026.

    The utility is also building a district cooling plant at Dubai Internet City.

    UAE-based TMF Euro Foundations was recently appointed as the enabling and piling subcontractor for the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15635949/main.jpg
    Mark Dowdall
  • Saudi cabinet approves Qatar high-speed rail link

    12 February 2026

    Saudi Arabia has approved the establishment of a proposed high-speed rail line connecting Riyadh and Doha.

    The approval was granted during a cabinet session chaired by King Salman Bin Abdulaziz Al-Saud in Riyadh on 10 February.

    The high-speed railway line will cover 785 kilometres (km) and will pass through Hofuf and Dammam, while also linking King Salman International airport and Hamad International airport.

    Saudi Arabia and Qatar signed an agreement in December last year to build a high-speed rail line.

    The agreement was inked by Saudi Arabia’s Transport & Logistics Services Minister, Saleh Al-Jasser, and Qatar’s Transport Minister, Sheikh Mohammed Bin Abdulla Bin Mohammed Al-Thani.

    Trains will reach speeds exceeding 300 kilometres an hour, reducing the travel time between the two capitals to about two hours.

    The project is slated for completion in six years. It is expected to serve over 10 million passengers annually and create more than 30,000 direct and indirect jobs.

    Riyadh and Doha relaunched the proposed rail link between the two countries in 2022, after agreeing to set a date to begin studying the connection. 

    In July of that year, France’s Systra was selected to conduct a feasibility study on the proposed scheme, as MEED reported.

    A rail link connecting Saudi Arabia and Qatar was planned before the diplomatic dispute that froze relations between Riyadh and Doha from 2017 until the Al-Ula Declaration was signed in January 2021.

    In 2016, Qatar Railways Company (Qatar Rail) planned to tender a design-and-build contract for the construction of regional railways in Qatar, including a link to the Saudi border.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15635582/main.jpg
    Yasir Iqbal
  • Bidders line up for Saudi sewage treatment contract

    12 February 2026

     

    Six bidders are competing in the next phase of Saudi Arabia’s long-term operations and maintenance (LTOM) sewage treatment programme, as National Water Company (NWC) moves closer to awarding a contract.

    The contract covers the North Western A Cluster Sewage Treatment Plants Package 11 (LTOM11) and has an estimated value of about $211m.

    The project involves the construction and upgrade of two sewage treatment plants with a combined capacity of about 440,000 cubic metres a day (cm/d).

    As MEED understands, the companies that have submitted proposals include:

    • Alkhorayef Water & Power Technologies (Saudi Arabia)
    • Civil Works Company (Saudi Arabia)
    • United Water (China)
    • Kuzu Group (Turkey)
    • VA Tech Wabag (India)
    • Aguas de Valencia (Spain)

    LTOM11, also known as the North Western A Cluster, forms part of the second phase of NWC’s rehabilitation of sewage treatment plants programme.

    The scheme is being procured on an engineering, procurement and construction (EPC) basis with a long-term operations component.

    The scope also includes a pumping station, surplus discharge lines, SCADA installation and associated infrastructure.

    The main contract was tendered last year, with an award initially expected by the end of 2025.

    It is now understood that NWC is preparing to offer the main contract in this quarter.

    LTOM programme

    LTOM11 follows a series of earlier awards under the programme.

    In January, a consortium of United Water (China), Prosus Energy (UAE) and Armada Holding (Saudi Arabia) won the main contract for the Northern Cluster Sewage Treatment Plants Package 10 (LTOM10).

    This has an estimated value of about SR203m ($54.1m).

    NWC previously awarded $2.7bn-worth of contracts for the first phase of its LTOM programme. This comprises nine packages covering the treatment of 4.6 million cm/d of sewage water for the next 15 years.

    As MEED reported, local contracting firm Alkhorayef Water & Power Technologies won three contracts with a combined capacity of 2.04 million cm/d, nearly half of the awarded total. These three contracts are worth more than SR5.53bn ($1.47bn).

    A consortium of France’s Suez and the local Al-Awael Modern Contracting Group, with its affiliate Civil Works Company (CWC), won two packages worth a combined SR1.84bn.

    A consortium comprising France’s Veolia and Awael-CWC won a single package worth SR1.26bn, and local utility developer Miahona won one package worth SR392m.

    In 2024, a joint venture of CWC and Al-Awael Modern Contracting was awarded a $211m contract for LTOM9.

    As part of the second phase, the main contract bids for LTOM12 (North Western B Cluster) have also been submitted.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15635292/main.jpg
    Mark Dowdall
  • Indian firm wins Dubai Latifa Bint Hamdan road project

    12 February 2026

    Indian contractor Larsen & Toubro (L&T) has won a contract to construct the first phase of the Latifa Bint Hamdan Street development project in Dubai.

    The contract value is between $110m and $275m, according to L&T’s contract classification.

    This project covers 12.2 kilometres of road network from its intersection with Al-Khail Road to Emirates Road.

    The project also includes 8.1km of bridges and will add capacity for about 16,000 vehicles an hour in both directions.

    The scope also involves widening the two-lane dual carriageway to four lanes in each direction.

    The project is scheduled for completion within 36 months.

    The contract was awarded by Dubai’s Roads & Transport Authority (RTA).

    The project is part of the RTA’s estimated AED16bn ($4.3bn) 2024-27 Main Roads Development Plan, which includes 22 projects across Dubai’s road network, as announced in November 2024.

    The development plan includes the construction of new roads and bridges to alleviate traffic congestion at several key locations across Dubai.

    Planning for growth

    The Dubai 2040 Urban Master Plan was launched in March 2021. Its launch referenced studies indicating that the emirate’s population will reach 5.8 million by 2040, up from 3.3 million in 2020. The daytime population is set to increase from 4.5 million in 2020 to 7.8 million in 2040.

    In December 2022, Sheikh Mohammed Bin Rashid Al-Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, approved the 20-Minute City Policy as part of the second phase of the Dubai 2040 Urban Master Plan. 

    In addition to the road projects, the RTA’s Dubai Metro Blue Line extension also forms part of Dubai’s plans to improve residents’ quality of life by cutting journey times, as outlined in the policy.

    The policy aims to ensure that residents can meet 80% of their daily needs within a 20-minute walk or bike ride. This goal will be achieved by developing integrated service centres with the necessary facilities and by increasing population density around mass transit stations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15635237/main.gif
    Yasir Iqbal
  • SAR tenders Riyadh section of Saudi Landbridge

    12 February 2026

     

    Saudi Arabia Railways (SAR) has tendered a design-and-build contract for the construction of a new railway line, the Riyadh Rail Link, which will run from north to south Riyadh.

    The tender was issued on 29 January, with a bid submission deadline of 29 March.

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

    The contract also covers the procurement, construction and installation of associated infrastructure such as viaducts, civil works, utility installations, signalling systems and other related works.

    The project is expected to form a key component of the Saudi Landbridge railway.

    Last month, 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 for the construction of the project, 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 will now be delivered in several phases under a different procurement model.

    The project has been under negotiation between Saudi Arabia and China-backed investors keen to develop it through a public-private partnership.

    Al-Malik said that the project cost is about SR100bn ($26.6bn).

    It comprises more than 1,500 kilometres (km) of new track. The core component is a 900km new railway between Riyadh and Jeddah, which will provide direct freight access to the capital from King Abdullah Port on the Red Sea.

    Other key sections include upgrading the existing Riyadh-Dammam line, a bypass around the capital called the Riyadh Link, and a link between King Abdullah Port and Yanbu.

    The Saudi Landbridge is one of the kingdom’s most anticipated project programmes. Plans to develop it were first announced in 2004, but put on hold in 2010 before being revived a year later. Key stumbling blocks were rights-of-way issues, route alignment and its high cost.

    In April last year, MEED exclusively reported that SAR had issued a tender for the lead design consultancy services contract on the Saudi Landbridge railway network.

    MEED understands that the scope covered the concept design and options for the preliminary and issued-for-construction design stages on the network.

    MEED reported that the launch of a design tender directly by SAR suggested that Riyadh was looking at other options to develop it alongside the Chinese proposal.

    In December 2023, MEED reported that a team of US-based Hill International, Italy’s Italferr and Spain’s Sener had been awarded the contract to provide project management services for the programme.

    If it proceeds, the Saudi Landbridge will be one of the largest railway projects ever undertaken in the Middle East and one of the biggest globally. Based on typical design timeframes, tenders for construction are likely to be ready by mid-2026, although the question of how it will be financed will need to be answered before it can proceed to the next step.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15635220/main.jpg
    Yasir Iqbal