Oman Oil Co's majority owned subsidiary Musandam Power Company (MPC) has closed on the finance of its 120 MW Musandam power project in Oman.
Bank Muscat has signed off on the development and financing of the project, having been advised by Shearman & Sterling.
The project involves the construction of a 120 MW power plant in northern Oman and will provide electricity to the Governorate of Musandam. Designed to run primarily on natural gas, the plant will also accept diesel fuel due to its remote location.
Wärtsilä Muscat has signed the Engineering, Procurement and Construction (EPC) contract along with a Long Term Service Agreement (LTSA) with the Musandam Power Company. The firm will provide on-going maintenance and performance monitoring for 15 years as of the commissioning date. Operation of the site is scheduled for Q4 2016.
The Musandam plant will operate under a Power Purchase Agreement (PPA) with Oman Power & Water Procurement Company (OPWP) for the supply of electricity to the Rural Area Electricity Company (Raeco), which owns and operates Musandam's generation and distribution system.
The Musandam project stands out as a ground-breaking transaction because it will provide a reliable power supply across the Musandam peninsula, which is geographically remote from the rest of Oman.