Launch of Oman’s first solar power plant with an investment of $417 million

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The Ibri II solar power plant in Oman will supply electricity to 50,000 homes. the project is funded by Saudi Arabia, Kuwait and Gulf-based investors.

Gulf countries unite to build the first solar power plant in Oman: Ibri II is a 500 MW solar photovoltaic energy project located in the Ad-Dhahirah region of Oman. The size of this will power approximately 50,000 homes.

Now complete, it is the first large-scale renewable energy installation in the Sultanate of Oman. Until now, Oman’s primary energy source has been natural gas, with a small percentage of diesel fuel in the mix.

Oman solar energy

The Ibri Power Plant is built, owned and operated by Shams Ad-Dhahira Generating Company, a special purpose entity incorporated by ACWA Power of Saudi Arabia (50%), Gulf Investment Corporation (40%) and the in Kuwait. Alternative energy projects (10%).

“As a company driving the transition globally, we are extremely proud to play a key role in supporting the Sultanate of Oman’s ambitious Vision 2040 energy transition goals,” said Mohammad Abunayyan, President of Oman. ‘ACWA Power, pictured below. “Since entering the Oman market in 2011, we have attracted significant foreign direct investment as we strongly believe in its vision and future.”

ACWA power supply of Saudi Arabia develops, invests and operates power plants and water desalination plants in 12 countries. ACWA Power’s portfolio, with an investment value of over $67.1 billion, can generate 42.6 GW of electricity and produce 6.4 million m3/day of desalinated water.

Gulf Investment Company based in Kuwait is a supranational financial institution equally owned by the 6 states of the Gulf Cooperation Council. GIC has a paid-up capital of US$2.1 billion and can be characterized as part sovereign wealth fund, part private equity firm, and part investment bank.

According to this report, The Gulf Cooperation Council (GCC) region plays a vital role in shaping global energy markets due to its substantial amount of hydrocarbon resources. Although the GCC has abundant hydrocarbon resources, countries in the region have also shown their commitment and intention to become world leaders in alternative energy. All countries in the Middle East have also set renewable energy deployment targets at the federal or local level.

The Ibri II solar power plant is supported by a 15-year power purchase agreement with the Oman Power and Water Procurement Company (OPWP). Ultimately, solar power plants are built with incentives: investors deposit the money and are then promised high feed-in tariffs for a fixed term, usually the life of the solar panels – around 15 or 20 years.

(You don’t have to be a big company to go solar. Check out our DIY solar guide here).

Financing of US$417 million was finalized in March 2020 and the solar power plant has just been made operational. When it reaches its maximum production capacity, the Omani solar power plant will supply 50,000 Omani homes while offsetting around 340,000 tonnes of CO2 emissions per year.

Located in a 10 square mile undeveloped area in Ibri Wilayat Province of Ad-Dhahirah Governorate of Oman, the power station is approximately 200 miles from the city of Muscat and approximately 80 miles from the United Arab Emirates border.

Powerchina Huadong Engineering Corporation (HDEC), a subsidiary of Powerchina, is the engineering, procurement and construction (EPC) contractor for the project.

Chinese company Jollywood provided the solar modules, while Sungrow provides the inverters. The First National Operation and Maintenance Company, a subsidiary of ACWA Power, will be responsible for the operation and maintenance of the Ibri II solar park. Yahya Engineering and 5 Capitals Environmental & Management Consultancy were engaged in carrying out the environmental and social impact study.

The overall objective of the plant and those to come is to reduce Oman’s dependence on fossil fuels.

Oman says 11% of its electricity will come from renewable energy by 2023 and 30% will come from renewable sources by 2030. Even though it is one of the countries with the highest solar densities (potential to go solar) in the region, he only started thinking about going solar because the state is gifted with natural resources such as natural gas.

If you have a proposal, bilateral agreements and solar tenders will need to go through the Oman Power and Water Procurement Company to be successful.

fuel sources gulf countries, middle east

According to PV Magazine the Middle East is seeing strong solar power growth this year: “The Middle East, and the Gulf in particular, has seen record solar prices in recent years,” the report said.

“Major projects are being awarded through competitive bidding, with prices steadily approaching the remarkable $1 USD/kWh. Of course, this is no coincidence due to the favorable solar conditions of the region: availability of cheap and sunny desert land, low labor costs, cheap project financing, favorable tax regimes, large projects benefiting from economies of scale, well-designed bidding structures and decreasing PV component prices.

Neom Desert Location

Location of the proposed city of Neom, on the Red Sea.

I would add that Saudi Arabia is also a leader in these developments, moving into new areas such as Oman for example, but also in the development of alternative fuel sources and their storage, such as hydrogen. I’m a fan of their exploration and belief in new energy sources (they have big wallets and can take risks) and less of a fan of their new developing city called Neom, which is supposed to be a sustainable city made of dreams.

Many Europeans are rushing to Saudi money and offering elaborate solutions to Saudi Arabia that might better come from local and indigenous sources. Read the Lo-Tek book to find out what these solutions might look like.

Image of the FSO Safer slowly sinking off the coast of Yemen

Moreover, with an oil tanker about to explode on the coast of Yemen, any dream of an ecological paradise in Neom will soon turn into a nightmare when everything is covered in bitumen. The oil tanker held by Houthi rebels is caught in the crossfire between escalating conflicts in the region that will make the Exxon Valdez explosion look like child’s play.

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