Masdar, the Abu Dhabi-based renewable energy company, signed an engineering, procurement and construction contract with a group of companies that include GE and Spain TSK to build a wind farm in Oman, the first large scale project of its kind in the Gulf.
“Oman has immense untapped potential in renewable energy, particularly in solar and wind. Masdar is proud to be supporting the historically close ties between the UAE and the Sultanate by providing our experience and expertise from delivering cutting-edge renewable energy solutions across the world," said Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar.
The company did not disclose the financial details of the 50 megawatt Dhofar Wind Power Project, which will power 16,000 homes and counterbalance 110,000 tonnes of carbon dioxide emissions annually.
"The Dhofar Wind Power Project will play an important role in supporting the diversification of Oman’s energy mix, while providing a reliable source of clean power to serve its growing population and economy.”
The project was established in 2014 between Masdar and the Rural Areas Electricity Company of Oman. Funding is being provided by the Abu Dhabi Fund for Development. GE is leading the engineering, procurement and construction consortium, providing 13 wind turbines.
Oman's economy has felt the pinch of a three year oil glut. A halving of crude prices since 2014 left the sultanate with a budget gap of almost 22 percent of economic output in 2016, according to the International Monetary Fund. The country posted a deficit of 2 billion rials ($5.2 billion) in the first five months of the year, compared with 2.5b rials in the year- earlier period.
Oman is planning to raise about $2b through debt sales this year as the largest Arab oil producer outside OPEC seeks ways to plug next year’s budget deficit, Bloomberg News reported earlier this month, citing people with knowledge of the plans.
The Ministry of Finance is speaking to banks and is evaluating bond and loan proposals, the news agency cited the people as saying without identifying them. No formal request for a proposal has been made, they said.
Moody’s Investors Services recently cut the rating of the sultanate to the second-lowest investment grade, saying Oman’s progress toward addressing structural vulnerabilities to a weak oil price environment has been more limited than expected. Oman has a sub-investment grade status at S&P Global Ratings.