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
  • Dubai tenders Warsan waste-to-energy consultancy contract

    16 February 2026

    Dubai Municipality has issued a tender for consultancy services on the second phase of the Warsan waste-to-energy (WTE) plant.

    The tender covers feasibility, procurement and construction supervision services for the project.

    The bid submission deadline is 25 February.

    The project relates to the planned expansion of the Warsan WTE plant in Dubai. The scheme has an estimated budget of $500m.

    The facility will be located in Warsan 2, next to the Al-Aweer sewage treatment plant.  As MEED understands, it will use treated wastewater from that facility.

    The project scope includes construction of treatment lines, a boiler hall, waste bunkers, a flue gas treatment system, a main electrical station and associated infrastructure.

    The contract duration is six years

    Expansion strategy

    The original Warsan WTE plant, Dubai’s first major WTE public-private partnership (PPP) project, reached full commercial operations in 2024.

    Located in the Warsan area, the AED4bn ($1.1bn) facility treats 1.9 million tonnes of municipal solid waste annually, generating up to 220MW of thermal energy that is fed into the local grid.

    In February 2023, state utility Dubai Electricity & Water Authority (Dewa) and Dubai Waste Management Company signed the power-purchase agreement (PPA) for the project.

    Dubai Waste Management Company, the special-purpose vehicle implementing the scheme, reached financial close in June 2021 for the project.

    The main contractor was a consortium of Belgium’s Besix Group and Hitachi Zosen Inova of Switzerland.

    The expansion aligns with Dubai’s long-term waste strategy. In February 2022, the emirate approved a AED74.5bn budget covering waste management initiatives from 2021 to 2041.

    The strategy promotes innovation in waste management, recycling and energy conservation. It anticipates private sector contributions of AED70.5bn, equivalent to about 95% of the total planned investment.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15660272/main.jpg
    Mark Dowdall
  • Saudi Arabia wastewater plant reaches financial close

    16 February 2026

     

    The planned $500m industrial wastewater treatment plant (IWWTP) in Jubail in Saudi Arabia’s Eastern Province has reached financial close, sources have confirmed to MEED.

    Located in Jubail Second Industrial City, the facility will treat and recycle wastewater from Satorp’s under-construction Amiral chemical derivatives complex, also in Jubail.

    The project reached financial close after hedging arrangements were completed on 12 February, sources said.

    A consortium of Saudi utilities provider Marafiq, the regional business of France’s Veolia and Bahrain/Saudi Arabia-based Lamar Holding is developing the project under a 30-year concession agreement.

    Saudi Aramco Total Refining & Petrochemical Company (Satorp), a joint venture of Saudi Aramco and France’s TotalEnergies, awarded the contract last September.

    As MEED exclusively reported, Egypt’s Orascom Construction is the engineering, procurement and construction (EPC) contractor for the project, which is expected to be commissioned in 2028.

    Marafiq, formally Power & Water Utility Company for Jubail and Yanbu, will own a 40% stake in the dedicated project company. Veolia Middle East will hold a 35% stake, and Lamar Holding’s Lamar Arabia for Energy will hold the other 25%.

    The planned IWWTP, which will primarily serve the $11bn sprawling Amiral chemicals zone, will implement advanced water treatment and recovery technologies to process complex industrial effluents, including spent caustic streams. Treated water will be reintegrated into the industrial processes, supporting closed-loop reuse and energy efficiency.

    As of February, more than 50% of construction on Satorp’s Amiral facility has been completed. Commissioning is targeted for the end of 2027.

    Construction is also ongoing on a separate industrial wastewater treatment plant (IWTP8) in Jubail. Saudi Services for Electro Mechanic Works is the contractor for the development’s fourth expansion phase.

    The Marafiq-owned project is scheduled to be completed by the end of the quarter.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15660112/main.jpg
    Mark Dowdall
  • Riyadh tenders Expo 2030 site offices contract

    16 February 2026

     

    Saudi Arabia’s Expo 2030 Riyadh Company (ERC), tasked with delivering the Expo 2030 Riyadh venue, has tendered a contract that includes the construction of site offices required for the initial construction works.

    MEED understands that the package was retendered in early February, with a bid submission deadline of 26 February.

    The contract was first tendered in May last year, with bids submitted in July, as MEED reported.

    The tendering activity follows the Royal Commission for Riyadh City (RCRC) issuing a design-and-build tender for the construction of a new metro station serving the Expo 2030 site.

    The new metro station will be located on Line 4 (Yellow Line) of the Riyadh Metro network.

    MEED understands that the tender was floated in early February, with a bid submission deadline of 3 May.

    Construction work on the Expo 2030 Riyadh site is progressing at an accelerated pace. In January, ERC awarded an estimated SR1bn ($267m) contract to deliver the initial infrastructure works at the site.

    The contract was awarded to the local firm Nesma & Partners.

    The scope of work covers about 50 kilometres (km) of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communication systems, and electric vehicle charging stations.

    Contractors are also bidding for infrastructure lots two and three. In December, MEED reported that ERC had floated another tender for the project’s initial infrastructure works.

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport, providing direct access to various landmarks within Riyadh.

    Countries participating in Expo 2030 Riyadh will have the option to construct permanent pavilions. This initiative is expected to create opportunities for business and investment growth in the region.

    The expo is forecast to attract more than 40 million visitors.

    In a statement, the Public Investment Fund said: “During its construction phases, Expo 2030 Riyadh and its legacy are projected to contribute around $64bn to Saudi GDP and generate approximately 171,000 direct and indirect jobs. Once operational, it is expected to contribute approximately $5.6bn to GDP.”

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15659580/main.jpg
    Yasir Iqbal
  • Acwa refinances $2.45bn Hassyan IPP debt

    16 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Acwa has announced it has refinanced the existing debt facilities of the Hassyan independent power project (IPP) in Dubai.

    In a post on social media platform LinkedIn, the developer said the transaction is the largest refinancing it has completed, valued at $2.45bn.

    It added that the deal is backed by a new group of lenders. These lenders have yet to be disclosed.

    The Hassyan IPP has a generation capacity of 2,400MW and reached full commercial operations in 2023.

    The project was originally developed as a coal-fired IPP. It was later converted to operate on natural gas instead, reflecting changes in Dubai’s power generation strategy.

    A consortium comprising Acwa – formerly Acwa Power – and China’s Harbin Electric won the contract to develop the project in 2016.

    Acwa and Harbin Electric hold 26.95% and 14.7% stakes, respectively, in the project company Hassyan Energy Company. Dubai Electricity & Water Authority (Dewa) holds 51%, while Silk Road Fund owns 7.35%.

    The Hassyan plant forms part of Dewa’s wider generation portfolio. Other major assets include the Jebel Ali and Al-Aweer power complexes, Mohammed Bin Rashid Al-Maktoum (MBR) Solar Park and the Hatta hydroelectric project.

    MBR Solar Park is the largest single-site solar park in the world, with a planned capacity target of 7,260MW by 2030.

    Dewa recently extended the bid deadline for its seventh phase, which will add 2,000MW from photovoltaic solar panels and includes a 1,400MW battery energy storage system with a six-hour capacity.

    The new bid submission deadline is 1 May.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15659537/main.jpg
    Mark Dowdall
  • SWPC rebrands as Sharakat to reinforce PPP focus

    13 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Water Partnership Company (SWPC) has unveiled a new corporate identity as part of a strategy to reinforce the role of public-private partnerships (PPPs).

    At a ceremony in Riyadh, the company said it will operate under the name Sharakat, reflecting its “evolution and expanding mandate in the kingdom’s water sector”.

    The new identity comes as Saudi Arabia expands the use of PPPs to deliver infrastructure projects.

    In January, the government launched a National Privatisation Strategy targeting more than 220 PPP contracts by 2030, including projects in the water sector.

    The government is targeting over $64bn (SR240bn) in private capital investments in this period, which it said would be “a new phase focused on execution and accelerating delivery”.

    Previously, the 2018 privatisation programme had focused on the ‘foundational phase’.

    SWPC has served as the principal offtaker of all water in Saudi Arabia since 2017. Its mandate covers desalinated water, transmission and treatment projects. It also includes small-scale plants, collection networks and strategic water reservoirs.

    The total investment value of its current projects exceeds SR56bn ($14.9bn), the offtaker said.

    According to MEED Projects, SWPC has over $11bn-worth of PPP projects in the pipeline, with two projects ($2.10bn) currently under bid evaluation.

    In December, local firm Vision Invest was named as the preferred bidder to develop and operate the 859-kilometre Riyadh-Qassim independent water transmission pipeline project. 

    The consortium of Miahona (Saudi Arabia), Marafiq Company and Buhur for Investment was also named as the preferred bidder for the Arana independent sewage treatment plant (ISTP).

    Financial close for both projects is expected in 2026.

    Meanwhile, SWPC has issued a request for proposals for the $150m Riyadh East ISTP, which will have a treatment capacity of 200,000 cubic metres a day (cm/d), expandable to 400,000 cm/day in the second phase.

    The bid submission deadline is 2 April. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15647732/main.jpg
    Mark Dowdall