ACWA Power Barka inks water purchase agreement
Muscat-listed unit of Saudi Arabian firm pens supply deal for expansion phase two.
ACWA Power Barka has signed the Water Purchase Agreement (WPA) with Oman Power and Water Procurement Company (OPWP) and other project agreements for the second expansion phase of its desalination plant north of Muscat.
A usufruct agreement for the use of the project land will be signed between the company and Ministry of Housing, the local unit of Saudi power plant developer and owner said in a statement to the Muscat Securities Market.
A separate Water Connection Agreement (WCA) will be signed between ACWA Power Barka and the Public Authority for Electricity and Water (PAEW).
Expansion Project Phase II is an Independent Water Project (IWP) to be developed on a Build, Own, Operate (BOO) basis and will be located at Barka, 65 km north of Muscat. It will benefit from synergies with the existing plant adjacent to it.
The additional capacity of 12.5 million gallons per day (MIGD) (56,825 m3/day) will meet the projected shortfall in the Sultanate of Oman’s water desalination production capacity and the steadily increasing annual demand for potable water.
The term of the WPA will effectively expire with the existing Power and Water Purchase Agreement (PWPA). The expansion will be funded by a syndicated loan from local financial institutions.
ACWA Power Barka aims to complete Expansion Project Phase II and start water production in three phases beginning from Q3 2015 with final COD in Q1 of 2016.
First National Company for Operation & Maintenance Services LLC (NOMAC Oman) is intended to be the O&M provider for the Expansion Project Phase II and is the current O&M provider for the existing plant and 10 MIGD Water Expansion Project Phase I of the Company.
ACWA Power Barka said it anticipates reasonable income generation from Water Expansion Phase II for all shareholders.