Financial close for $300m Oman water project
Muscat, September 23, 2013
Oman's largest independent water project (IWP) being funded by Japanese financial institutions, has reached its financial close, said international law firm Trowers & Hamlins, which acted as advisor for the project.
The Ghubrah IWP project, valued at $300 million, comprises a desalination plant with a daily treatment capacity of 190,000 cu m. It will use reverse osmosis technology to supply fresh water equivalent to the daily amount consumed by approximately 800,000 people.
The plant will be run by Muscat City Desalination Company under a 20-year Water Purchase Agreement with Oman Power and Water Procurement Company, and commercial operation is scheduled to commence on a fast-track basis in October next year.
Trowers & Hamlins said it has advised the sponsor group comprising Sumitomo Corporation (Japan), Malakoff Corporation Berhad (Malaysia) and Cadagua SA (Spain) on the project.
It will be funded by Japanese financial institutions, led by the Japan Bank for International Cooperation, through a build-own-operate project finance structure.
Trowers & Hamlins said it had acted as local counsel to the sponsor group on all aspects of Omani law relating to financial close and the establishment of a specialist operation and maintenance company.
The consortium was appointed preferred bidder for the Ghubrah IWP in November last year.
Tsutomu Sakamoto, the deputy chairman of Muscat City Desalination Company, representing Sumitomo, said: "Sumitomo, Malakoff and Cadagua are very proud to have the opportunity to contribute to providing a sustainable water supply for 20 years through this project. We believe the Ghubrah IWP will ease the serious shortage of water facing Muscat."
Edward Rose, the energy partner at Trowers & Hamlins who led on the deal, said: "We are very pleased to have been involved in the largest-ever IWP in the Sultanate. This project is designed to help meet the rapidly increasing demand for potable water in Oman, particularly in the Muscat capital area."
"We believe we are likely to see more projects of this kind in the immediate future," he added.
In addition to Rose, the Trowers & Hamlins team included Roger Clarke (partner, head of banking and project finance), Kate Marshall (managing associate), Leyan Al Mawali (associate), Haitham Al Lawati (trainee) and Tom Barton (trainee).-TradeArabia News Service