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Infrastructure & PPPs in Oman - H12020 Update

July-20

RFPs out for Manah I & II solar IPPs

Oman Power and Water Procurement Company (OPWP) issued the request for proposal documents for Manah Solar I & II – 2 independent power producer (IPPs) projects with outputs of 500-600MW each. The deadline for bids is in Dec-20.

OPWP prequalified 9 bid groups for the two projects in Dec-19.

  • ACWA Power

  • Eni, SB Energy

  • Jinko Power

  • Korea Western Power, Hanyang Corporation, Solar Reserve, Nafath Renewable Energy

  • Marubeni

  • Masdar, EDF Renewables

  • PowerChina

  • TagEnergy, Al Al-Shanfari Group

  • Total Solar International

June-20

OMAN LAUNCHES PATHFINDER SHIPYARD PPP

The government of Oman has announced a 􀁷rst-of-its-kind shipyard complex PPP, the latest in a series of PPPs in the country. The private sector will build, maintain, and operate the new complex for a period of 30 years, according to a release from Oman’s government.

The project, procured by Oman’s Public Establishment for Industrial Estates, Madayn, will be in the Sur Industrial City, 200km south of Muscat.

The new shipyard is needed due to increasing demand in the fishing sector and a need to increase the number of factories to build small and medium-sized fishing vessels, according to the announcement. The Sur Industrial City was inaugurated in 1999 and accommodates 134 businesses, according to Madayn’s website.

OMAN OIL COMPANY INVITED PROPOSALS FOR ACCOMMODATION PPP

Oman’s state oil company has issued a request for proposals (RFP) for a USD 500m PPP to build accommodation for 30,000 staff and outside contractors. Petroleum Development Oman (PDO) is also tendering a mandate for advisors to help it define a more precise structure for the design, build, own, operate and maintain contract, which could have an option to transfer the assets back to the company (DBOOM/T).

The new housing blocks will be built in 12 locations, replacing temporary accommodation facilities, according to PDO’s project document on its website. Technical bids are due in Oc-10with final bids by Jan-21.

The Manazil project is being procured directly by PDO, and not via Oman's Public Authority for Privatization and Partnership (PAPP), which generally handles the sultanate’s PPP projects. PDO, which did not respond to requests for comment, accounts for 70% of Oman’s crude oil production and almost all of its gas supply. It is 60% owned by the government of Oman, 34% by Royal Dutch Shell, Total (4%) and Partex (2%).

May-20

Pipeline of 49 projects in Oman for PPP implementation

With a view to strengthening the partnership between the public and private sectors, the Public Authority for Privatization and Partnership (PAPP) has unveiled a portfolio of 49 initiatives related to the health sector, education, environment, transportation, government services, agriculture and fisheries, for implementation under the PPP model.

The Partnership Law promulgated by Royal Decree 52/2019, which is managed by PAPP, aims to encourage the private sector to invest in infrastructure and public services projects to contribute to the process of economic diversification.

The summary status of 49 projects is as below:

  • negotiation and award stage – 1

  • offer stage – 4

  • feasibility study stage – 9

  • initial study stage – 35

OMAN LAUNCHED MULTIPLE TENDERS FOR ADVISORY SERVICES

Oman’s Public Authority for Privatization and Partnership (PAPP) issued various advisory tenders for PPPs in different sectors.

  1. Salalah-Thumrait Truck Road PPP project - Ministry of Transport (MoT) and state-owned transport company MWASALAT

  2. Integrated ndustrial Waste Treatment Facility (IWTF) PPP project - Be’ah, a closed stock company fully owned by the government of Oman

  3. Schools PPP programme - Ministry of Education (MoE)

  4. Renal dialysis services PPP project - Ministry of Health (MoH)

Oman’s Public Authority for Privatisation & Partnership (PAPP) is implementing the tender for the advisory services for all the projects.

OMAN’S OPWP ISSUES NOTICES FOR PAYMENT SUSPENSION TO IPPS, SUBSEQUENTLY WITHDRAWS THE DECISION IN LESS THAN 2 WEEKS

Oman Power and Water Procurement Company is reversed its decision to halt payments to IPPs, IWPs and IWPPs in less than 2 weeks since it was first announced on 17-May-20, with letters of suspension being withdrawn.

The unprecedented move by OPWP alarmed market participants and only a few days after its announcement the Ministry of Finance said it was working with OPWP on a financial plan to restore the payments that had been deferred. If Oman had proceeded with the deferral of payments, the losses by private project owners was estimated to run into the hundreds of millions of dollars.

A wholesale failure to meet contractual obligations by OPWP would have damaged market appetite for upcoming projects.

The Ministry of Finance (MoF) and OPWP will work with the relevant companies on financial plans for payments as well as review an expansion plan in production capacity as per future needs. According to the ministry, these measures are all part of the framework aimed at improving the efficiency of financial collection and reducing financial losses resulting from government support provided without disrupting the fulfilment of the government's contractual obligations.

Mar-20

TANWEER’s ISSUE OF RFP FOR OMANI HYBRIDS

Oman’s Rural Areas Electricity Company (TANWEER) has issued request for proposal (RFP) documents to the 14 teams prequalified on the tender for 11 solar-diesel-storage hybrid power projects with a combined capacity of 146MW. All 11 projects will be awarded under a single build, own, operate, and transfer (BOOT) contract, and the winning consortium will also finance and maintain the power plants.

The 14 bidding groups prequalified in Dec-19 are:

  1. · Alfanar

  2. · Bahwan Renewable Energy, Canadian Solar

  3. · EDF, PDO, Alawi

  4. · Engie, Multitech

  5. · FRV, Aggreko

  6. · Jinko Solar

  7. · Mainstream Renewable Power, Tesla, FG Wilson

  8. · Mytilineos

  9. · NTPC

  10. · Scatec Solar

  11. · Shell, Enertech, Enerwhere, HTC

  12. · Total, Altaaqa

  13. · Voltalia

  14. · Wartsila, MB Holding, Arket International

The BOOT contract will see 70MW of diesel-fired, 48MW of solar PV, and 28MWac/14MWh of battery storage added to Oman's generation capacity. The responsibilities include:

  • · two greenfield diesel-fired power plants at Madha, in Musandar, and Mittan, in Dhofar

  • · replacement and expansion of nine brownfield diesel-fired power plants

  • · solar PV and battery storage components at all 11 sites

Tanweer has not yet revealed the length of the concession, but the offered PPA will run for a period of 15 years – the standard length for offtake agreements for many other energy projects in Oman.

IBRI II SOLAR PV, OMAN REACHED FINANCIAL CLOSE

Oman’s first utility-scale, grid connected renewable energy project reached financial close just as the world entered economic turmoil caused by the Covid-19 pandemic.

An ACWA Power-led consortium was able to fast-track the $275 million debt financing of the $400 million, 500MW Ibri II solar PV by ending negotiations with an ECA and stepping up the commercial tranche to compensate.

The 15-year offtake agreement features a ‘long tail’ of 10 years against the 25-year project agreements which forced bidders to take an "aggressive view" of what solar prices will resemble in the future.

The three consortia who submitted bids for the project were:

  1. · ACWA Power, Gulf Investment Corporation (GIC), Alternative Energy Projects (AEPCo)

  2. · Marubeni

  3. · Masdar, Total Solar, Jinko Solar

The ACWA Power-led consortium was named the preferred bidder in Mar-19 and signed with OPWP the build, own, operate (BOO) contract in May-19.

The debt was signed in Mar-20 with below commercial lenders:

  1. · Standard Chartered Bank (lead)

  2. · Bank Muscat

  3. · Riyad Bank

  4. · Siemens Bank

  5. · Warba Bank

Ibri II is expected to begin commercial operations in Jun-21.

STATE GRID ACQUIRED STAKE IN OMANI NATIONAL GRID

The State Grid Corporation of China completed its acquisition of a 49% stake in Oman Electricity Transmission Company (OETC) from Nama Holding for $1 billion. The deal is part of the privatisation process under way in the Omani energy sector.

State Grid will be a technical partner of transmission company and will provide its “advanced power transmission technologies, management experience and strong brand” to OETC. Nama Holding retains the remaining 51% of OETC. The deal was agreed in Dec-19 and signed in Mar-20.

The government of Oman is seeking further foreign direct investment in the country’s energy sector.

OMAN’S HAYA WATER LAUNCHED MISFAH WASTEWATER PPP

State-owned Haya Water issued the request for qualification (RFQ) documents for the Misfah sewage treatment plant (STP) in the Muscat Governorate – the first PPP to be procured since the establishment of an Omani PPP unit on 1 July 2019.

Misfah STP will have a capacity of 40,000 cubic metres of water per day (m3pd) and will be delivered through a DBFOM contract. The chosen sponsor will also DBFOM an 18km pipeline from the Misfah facility to an existing STP at Al Ansab for the offtake of treated water.

The project is being implemented by Oman’s Public Authority for Privatisation & Partnership (PAPP), which was established by the government in July 2019. Haya Water – a joint-stock company founded in December 2002 and wholly-owned by the government – holds the concession to develop and O&M wastewater projects in the Muscat Governorate. The state-owned enterprise is planning several more wastewater PPPs.



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