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Sohar Power secures IWPP financing

23 November 2003 – Sohar Power Company has announced the financial closing of a $549m facility with a syndicate of international and local banks for its independent power & water project (IWPP) in Oman.

Tractebel EGI, a business division of Suez, and five local partners, National Trading Company, Zubair Corporation LLC, W J Towell and Co, the Ministry of Defence Pension Fund (MODPF) and Sogex Oman LLC, completed the limited recourse financing of the Sohar Power Company SAOC. Additionally, the National Bank of Oman is also issuing a performance bond facility of $70m.

BNP Paribas acted as global co-ordinator and mandated lead arranger. The consortium of banks included BankMuscat, Standard Chartered Bank, Bayerische Landesbank, KBC Finance Ireland, HSBC Middle East, Sumitomo Mitsui Banking Corp and Gulf International Bank as mandated lead arrangers, Noedeutsche LB, Arab Bank Plc, Mizuho Corporate Bank Ltd, Unicredito Banca Mediocredito Spa as lead arrangers and Oman Arab Bank, Natexis Banque Populaires, Oman International Bank, Bank Dhofar, National Bank of Oman as co-arranger are providing the $549 million facility.

In July 2004, the consortium of Tractebel and its local partners was awarded the project by the Ministry of Housing, Electricity and Water. The project consists of 585 MW CCGT plant plus a 33 million gallons per day (6250 cubic metres per hour) water desalination plant and is located in the Sohar Industrial Area.

The project will sell electricity and water to the Oman Power and Water Procurement Company SAOC under a 15-year power and purchase agreement (PWPA) commencing on April 1, 2007.

A first phase of the 360MW is scheduled to be operational on April 1, 2006. This PWPA will secure long-term dollarised returns to the Sohar Power Company.