Acwa Power Achieves Financial Close on 500MW Ibri II Solar Plant
In a significant stride for Oman’s renewable energy ambitions, ACWA Power, a leading Saudi developer of power and water desalination projects, has officially announced the financial close for the landmark 500 MW Ibri II Solar Photovoltaic (PV) Independent Power Project (IPP). This crucial milestone secures the full funding required for the project, clearing the path for construction to advance and solidifying Oman’s position as a key player in the region’s clean energy transition.
The Ibri II project represents a cornerstone of Oman’s national strategy, which aims to derive 30% of its electricity from renewable sources by 2030. The successful financial close underscores strong investor confidence in Oman’s vision and the economic viability of utility-scale solar power in the Middle East.
Project at a Glance: The Ibri II Solar Plant
Located in the Dhofar Governorate near the city of Ibri, the 500 MW plant is set to become a powerhouse of clean energy. The facility will utilize state-of-the-art solar PV technology, incorporating single-axis trackers to maximize energy capture by following the sun’s path throughout the day.
Once operational, the Ibri II plant is projected to generate approximately 1,150 GWh of electricity annually. This output is sufficient to power around 120,000 Omani households and will play a vital role in decarbonization efforts by offsetting an estimated 600,000 tons of carbon dioxide emissions each year. This project, combined with the adjacent Ibri I Solar Plant, helps establish an 800 MW solar hub in the region.
A Robust Financial and Partnership Framework for Ibri II Solar Plant
The total cost of the Ibri II project is estimated at approximately OMR 240 million (around $624 million USD). The successful financial close was achieved through a strategic blend of equity and debt financing, demonstrating a robust and collaborative partnership model.
The equity consortium is led by ACWA Power with a 40% stake, joined by Korea Western Power (20%), Masdar (20%), and the Oman National Power & Water Procurement Co (20%).
The debt financing, totaling OMR 180 million (around $468 million USD), was secured from a syndicate of eight international and local financial institutions. This diverse group of lenders includes prominent names like Japan’s MUFG and the Korea Development Bank, highlighting the project’s global appeal and financial soundness.
A key element of the project’s bankability is the 20-year Power Purchase Agreement (PPA) signed with the Oman Power and Water Procurement Company (OPWP). The agreement was secured at a highly competitive tariff of just 1.2375 cents/kWh, which at the time was the lowest in the country and a testament to the falling cost of solar energy.
Strategic Significance for Oman and the Region: Ibri II Solar Plant
The Ibri II Solar Plant is more than just a power station; it is a strategic asset for the Sultanate of Oman. By diversifying the national energy mix, the project enhances energy security and reduces reliance on traditional fossil fuels. It serves as a powerful example of how the region can leverage its abundant solar resources to drive sustainable economic growth.
For ACWA Power, this project further cements its leadership in the MENA region’s renewable energy sector, expanding its portfolio and aligning with Saudi Arabia’s Vision 2030 goals for clean energy development.
The project’s successful financing at such a low Levelized Cost of Energy (LCOE) sends a strong signal to the global market. It demonstrates that large-scale solar projects in the Middle East are not only environmentally beneficial but also highly competitive and attractive investment opportunities. With PowerChina International Group leading the construction as the EPC contractor, the project was targeted for commercial operation in late 2023, marking a swift journey from conception to power generation.
