AIIB has approved a USD 60 million loan to increase the renewable power generation capacity in Oman by financing a 500 MW solar PV project in the country
The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved a USD 60 million loan to increase the renewable power generation capacity in Oman to help reduce the country’s dependence on gas and other fossil fuels for electricity generation. This is financing institutions’ first nonsovereign-backed financing in the country’s renewable energy sector. The project is a 500 megawatt (MW) greenfield solar photovoltaic power plant in Ibri being developed by a special purpose company established by ACWA Power, Gulf Investment Corporation and Alternative Energy Projects Co. It is Oman’s first utility-scale renewable energy project to be connected to the grid. The total project cost is approximately USD 400 million.
Oman’s sustained economic and population growth over the past decade has led to fast-growing electricity demand and put a strain on the existing power infrastructure. The country has one of the highest solar densities in the world, providing a great development potential for solar energy resources. Currently, almost all the installed electricity capacity in Oman is fueled by natural gas, leaving huge potential for renewable energy.
“AIIB’s investment will increase the availability of Oman’s renewable power generation capacity and contribute to filling the anticipated gap in peak demand,” said AIIB Vice President D.J. Pandian. “The project will also help the country move toward a more balanced and environmentally sustainable energy mix to ensure long-term energy sustainability.”
The project is in line with AIIB’s energy sector strategy in reducing the carbon intensity of energy supply and catalysing private capital investment in renewable energy infrastructure. Its involvement will ensure the use of high environmental and social standards in the project.
In December 2019, we had reported that the Beijing-headquartered multilateral development bank had approved the investment of USD 65 million in Hero Future Energies’ 250 MW solar power project in Jodhpur, Rajasthan. The lender said in a statement that “as part of ongoing efforts to mobilize private capital for infrastructure, President Jin also approved a USD 65-million 250-MW solar power project in Jodhpur, the second-largest city in the northwestern Rajasthan state.”
The Indian independent power producer (IPP) is developing this project via a special purpose vehicle (SPV) called Clean Solar Power (Jodhpur) Pvt Ltd. The project is expected to generate clean energy of 616 MWh in 2022.