Oman pursues utility and grid expansion
5 December 2024

Expanding renewable energy and water production capacity and interconnecting disparate grids have been key priorities for Oman’s main utility stakeholders, especially over the past two years.
These efforts support a stated objective for renewable energy to account for 30% of Oman’s electricity generation capacity by 2030 – or an intervening milestone of about 3,000MW by 2027 – while ceasing to procure new thermal capacity.
“As in every other GCC state, the role of renewables is enshrined in Oman’s overall energy production mix target,” notes a UAE-based infrastructure consultant.
In addition to the longer-term renewable energy target, the sultanate expects new wind and solar projects to contribute to almost 11% of electricity production by 2025, according to the state offtaker Nama Power & Water Procurement Company’s (Nama PWP) latest seven-year statement covering 2023-29.
The milestones appear manageable. While Oman’s operational renewable energy capacity, mainly from the Ibri 2 solar independent power project (IPP), is only around 500MW, a further 1,000MW is under construction through the Manah 1 and Manah 2 solar IPPs.
The tendering process is also under way for around 1,000MW of wind IPP schemes.
In September, Nama PWP invited firms to bid for a contract to develop and operate the first two wind farms it is procuring under an IPP framework.
Located in South Sharqiyah Governorate, the Jalan Bani Bu Ali wind IPP will cater to Oman’s Main Interconnection System (MIS). It will have a capacity of 91MW-105MW and a commercial operation target of Q1 2027.
The second scheme is the Dhofar wind IPP, catering to the smaller Dhofar Power System (DPS). It will have a capacity of 114MW-132MW and will be operational in Q2 2027.
Three other wind schemes will be tendered over the following months, bringing the total capacity of wind IPPs to be developed in Oman over the next two to three years to over 1,000MW.
Nama PWP is also expected to issue the request for proposals for the 500MW Ibri 3 solar IPP scheme shortly.
Expiring capacities
While Muscat has said it does not plan to procure further thermal power generation capacity in the foreseeable future, it successfully extended the contracts for several expiring thermal power generation and water desalination capacities earlier this year.
These agreements collectively secured over 1,500MW of electricity and 200,000 cubic metres a day (cm/d) of desalinated water for up to nine years.
The contract renewals follow the expiry or expected expiry of the power- or power and water-purchase agreements for the following plants:
- Barka 1 independent water and power project (IWPP): 427MW (installed power generation capacity) / 101,000 cm/d (desalination capacity)
- Barka 2 IWPP: 703MW / 120,000 cm/d
- Rusail IPP: 184MW
- Manah IPP: 179MW
According to Saudi utility developer Acwa Power, the Barka 1 plant’s power and water purchase agreement extension is valued at $356m.
It includes extending the operation of the power plant for eight years and nine months, starting from 1 June 2024, and the water desalination plant for three years from 1 September 2024. When it began operations in 2003, the facility contributed 6% of Oman’s electricity and 24% of its desalinated water.
Nama PWP said “efficient utilisation of gas consumption will continue to improve” over the 2023-29 planning horizon.
Peak demand forecast
Peak demand in the MIS is expected to grow at an average of approximately 3.4% a year over the seven-year planning period, reaching about 8,350MW in 2029, up from 6,628MW in 2022.
In the DPS, peak demand is anticipated to grow 5% a year, from 612MW in 2022 to 837MW in 2029.
Oman has been implementing key projects to improve the efficiency of its electricity grids, addressing growing peak demand and intermittent renewable power.
In 2023, Oman Electricity Transmission Company completed works on the $966m, 400-kilovolt (kV) first phase of the North-South Interconnection project – known as Rabt – enabling Oman’s MIS to connect with the Duqm Power System.
The project is expected to stimulate the development of the Special Economic Zone at Duqm (Sezad) and the development of renewable energy projects in the Al-Wusta Governorate. The next phase to expand the Rabt project is expected by 2026.
Oman’s second direct link to the GCC regional electricity grid is also planned to come onstream the same year.
The 400kV Oman Direct Link project will extend the Gulf Cooperation Council Interconnection Authority’s (GCCIA) 400kV transmission network to enable direct interconnection with Oman.
According to energy consultancy firm Energoprojeckt, which is advising the GCCIA on this project, a new 400kV double circuit overhead line connection, with a total route length of 528 kilometres, will be constructed from the existing 400kV GCCIA Silaa substation in the UAE to the existing 400/220kV Ibri substation in Oman.
Oman’s first link with the GCCIA became operational in November 2011. It comprises a 200kV line connecting the Mahadha grid station in Al-Wasit, Oman, to the Al-Oha grid station in Al-Ain, UAE.
Water sector
The sultanate’s water sector has been similarly buoyant. Contract awards for desalination and treatment capacity and the construction of water transmission pipelines are approaching record highs.
According to MEED Projects data, close to $1bn-worth of contracts are in the bid evaluation stage, including the estimated $100m package for the wastewater network facilities on Masirah Island, as well as several water pipeline, desalination and dam projects across the sultanate.
Oman’s Barka 5 independent water project (IWP) reached commercial operations in August, its owner and operator, Madrid-headquartered GS Inima, announced. Oman’s eighth IWP scheme has a design capacity of 100,000 cm/d.
The project, which uses reverse osmosis technology, will serve 800,000 people in the sultanate’s most populated areas: Muscat, Dakhiliyah and Batinah.
GS Inima, in a consortium with local contractor Sogex and Saudi Arabia’s Aljomaih, won the contract to develop another IWP in Oman, the 300,000 cm/d Ghubrah 3 IWP, in 2020. The project is expected to reach financial close soon.
Peak water demand in the sultanate’s MIS is expected to increase by an average of 2% annually, from 1,172,000 cm/d in 2022 to 1,387,000 cm/d in 2029.
A higher growth rate of 5% annually is expected in the sultanate’s Sharqiyah zone, and 7% is projected in Dhofar.
Other upcoming projects
In addition to Nama PWP’s plans, state-backed Petroleum Development Oman (PDO) is procuring renewable energy capacity to support its target of 30% of its power capacity coming from renewable sources by 2026 and 50% by 2030.
PDO floated a tender for two 100MW wind projects in April 2023. It is understood that PDO is in discussions with Abu Dhabi Future Energy Company (Masdar) for the contract to develop the Riyah-1 and Riyah-2 wind projects.
PDO has also appointed a team comprising Beijing-headquartered Power Construction Corporation of China (PowerChina) and its subsidiary, Huadong Engineering Corporation (HDEC), to undertake the engineering, procurement and construction (EPC) work for the two wind projects.
PDO plans to develop its second solar photovoltaic project near Saih Nihayda, next to Qarn Alam airport, in the northern region of Oman. The project is expected to come onstream late next year, nearly five years after its first 100MW Amin solar project began operating.
Exclusive from Meed
-
Safety and security matters3 April 2026
-
Saudi forecast remains one of growth3 April 2026
-
-
-
Oman’s Nama PWP tenders consultancy contract3 April 2026
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Safety and security matters3 April 2026
Commentary
Colin Foreman
EditorRead the April issue of MEED Business Review
Employment and investment opportunities in a low or no-tax environment have been key attractions for people and businesses located in the GCC for decades. Another crucial factor has been safety and security.
That reputation has been tested by the missile and drone attacks that began on 28 February. Whether the GCC’s safe haven status has been damaged depends on perspective.
For some, the fact that attacks occurred fundamentally changes how the region is viewed. For others, the ability to absorb a serious shock, respond quickly, and keep daily life and businesses functioning demonstrates resilience.Any assessment of safety is also relative. Many people and businesses that relocate in the GCC do so not only for opportunity, but because of dissatisfaction elsewhere. Common reasons include limited economic prospects, high taxation, distrust in political leadership and concerns about personal safety. Even with the recent conflict, the GCC may still compare favourably for those considering these factors.
There is no doubt that missile and drone attacks are extremely dangerous, and the fear of further incidents can linger. Even if attacks are infrequent, the uncertainty matters. It can influence personal decisions, travel advice, and the cost of insurance and risk management. These perceptions will shape the region’s attractiveness.
Safety concerns vary. In many parts of the world, higher levels of crime are an everyday worry for residents and businesses. For some, the GCC may still feel like the better option, provided the current tensions do not become the new normal.
How this question is answered will play an important role in how the region’s economies perform in the period ahead. If confidence returns quickly and the risk is seen as contained and manageable, investment and hiring will likely rebound faster than many expect. If uncertainty persists or escalates, the road to recovery will be a long one.
READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDFEconomic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.
Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:
> AGENDA: Gulf economies under fire> GCC CONTRACTOR RANKING: Construction guard undergoes a shift> MARKET FOCUS: Risk accelerates Saudi spending shift> QATAR LNG: Qatar’s new $8bn investment heats up global LNG race> LEADERSHIP: Shaping the future of passenger rail in the Middle EastTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16250747/main.gif -
Saudi forecast remains one of growth3 April 2026

MEED’s April 2026 report on Saudi Arabia includes:
> COMMENT: Risk accelerates Saudi spending shift
> GVT &: ECONOMY: Riyadh navigates a changed landscape
> BANKING: Testing times for Saudi banks
> UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
> DOWNSTREAM: Saudi downstream projects market enters lean period
> POWER: Wind power gathers pace in Saudi Arabia
> WATER: Sharakat plan signals next phase of Saudi water expansion
> CONSTRUCTION: Saudi construction enters a period of strategic readjustment
> TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure pushTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16250096/main.gif -
Dubai seeks consultants for Al-Khawaneej stormwater project3 April 2026
Dubai Municipality has issued a consultancy tender to assess and upgrade the stormwater drainage system serving the Al-Khawaneej First residential district in northeastern Dubai.
The project, listed as TF-22-E1, covers the upgrading and rehabilitation of the stormwater system in the area. The tender has been issued by the municipality’s Sewerage and Recycled Water Projects Department.
The bid submission deadline is 23 April.
The works form part of Dubai’s wider efforts to strengthen flood resilience and support sustainable urban infrastructure development.
Two separate consultancy tenders were issued in March as part of a broader review of the emirate’s water and wastewater infrastructure to support future population growth.
One involves a study to develop a sustainable urban drainage systems strategy across the emirate. The other covers a review of the emirate’s sewage treatment and recycled water distribution strategy.
The Al-Khawaneej First consultancy role will include data collection, site investigations and an assessment of existing drainage conditions.
Additionally, the consultant will be required to identify flooding hotspots and evaluate the performance of the current system.
The project covers the preparation of preliminary and detailed designs, tender documents and construction packages as well as construction supervision through to project handover.
The municipality added that integrated drainage solutions are to be developed as part of the package, including sustainable drainage systems (SuDS) and nature-based approaches to address current and future stormwater demand.
READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDFEconomic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.
Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:
> AGENDA: Gulf economies under fire> GCC CONTRACTOR RANKING: Construction guard undergoes a shift> MARKET FOCUS: Risk accelerates Saudi spending shift> QATAR LNG: Qatar’s new $8bn investment heats up global LNG race> LEADERSHIP: Shaping the future of passenger rail in the Middle EastTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16249098/main.jpg -
Developer plans two residential schemes in Saudi Arabia3 April 2026
Saudi developer Alramz Real Estate is planning two new residential developments in Jeddah and Riyadh.
In a Tadawul filing on 31 March, Alramz said it had signed an agreement with Oud Capital to establish a sharia-compliant real estate investment fund to develop the Alramz Front project in Jeddah’s Al-Firdous district.
The fund is targeting approximately SR650m ($173m), with Alramz committing about SR81.6m. The company will also contribute land totalling around 47,800 square metres, valued at SR215m, as an in-kind contribution.
The project is expected to deliver nearly 900 residential units. Alramz will serve as developer and exclusive marketer under a development contract valued at about SR269m.
Separately, Alramz said it had acquired mixed-use plots in Riyadh’s Al-Malqa district for SR94.6m. The 8,600 sq m site will be developed into a residential scheme comprising approximately 135 apartments.
READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDFEconomic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.
Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:
> AGENDA: Gulf economies under fire> GCC CONTRACTOR RANKING: Construction guard undergoes a shift> MARKET FOCUS: Risk accelerates Saudi spending shift> QATAR LNG: Qatar’s new $8bn investment heats up global LNG race> LEADERSHIP: Shaping the future of passenger rail in the Middle EastTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16249064/main.jpg -
Oman’s Nama PWP tenders consultancy contract3 April 2026
Oman’s Nama Power & Water Procurement Company (Nama PWP) has opened a tender for the provision of environmental, social and governance (ESG) reporting consultancy services.
The tender seeks proposals from interested parties to support the utility in assessing its ESG maturity and identifying gaps against the Oman Investment Authority’s ESG guidelines.
The deadline for firms to submit offers is 10 May.
According to the tender notice, the selected consultant will develop the required ESG policies, strategy, report and implementation roadmap.
Nama PWP, part of Nama Group, said the scope of work is intended to support the company’s wider ESG framework as it continues to procure new power and water capacity in Oman.
The utility also recently opened a tender seeking proposals from qualified law firms to provide legal consultancy services in Oman.
The selected firms will be included on a panel and engaged on an as-needed basis. They will deliver legal advisory services across a range of matters relevant to Nama PWP’s business.
The deadline for firms to submit offers is 21 April.
In March, the state utility released its latest seven-year plan outlining the rapid expansion of solar and wind projects.
It expects the renewable energy share of Oman’s power generation mix to increase steadily across the period, reaching 16% in 2028 and 21% in 2029 before rising to 30% in 2030. This compares to about 4% in 2024.
The pipeline includes a series of large-scale independent power projects scheduled for delivery between 2027 and 2031.
Solar photovoltaic capacity in the sultanate is projected to rise from 1.54GW in 2024 to 23.26GW by 2031. Wind capacity is expected to grow from 120MW to 6.75GW,
READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDFEconomic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.
Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:
> AGENDA: Gulf economies under fire> GCC CONTRACTOR RANKING: Construction guard undergoes a shift> MARKET FOCUS: Risk accelerates Saudi spending shift> QATAR LNG: Qatar’s new $8bn investment heats up global LNG race> LEADERSHIP: Shaping the future of passenger rail in the Middle EastTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16249021/main.jpg
