Bahrain-based Instrata Capital has entered into an agreement with Oman Investment Corporation to acquire a strategic stake in the Sultanate’s giant Sembcorp Salalah Independent Water and Power Project (IWPP).

A regulated asset management firm specializing in infrastructure investments, Instrata said the transaction has been done through its Bunyah GCC Infrastructure Fund.

The Sembcorp Salalah IWPP is a 445 MW combined cycle gas turbine power and water desalination plant located in the southern region of Salalah.

The 15 million imperial gallons per day (MIGD) plant has been developed on a build, own and operate (BOO) model, and will play an important part in meeting demand in one of Oman’s key growth regions.
 
The entire output of the project is contracted under a long term power and water purchase agreement with Oman Power and Water Procurement Company (OPWP). It is due to be completed by this April.

“The Salalah IWPP is an important infrastructure asset for the Sultanate of Oman, and a strategic addition to our existing investment portfolio in the region,' said Suhail Hajee, chief executive officer at Instrata Capital. 
 
'The current economic uncertainties have led to an increased focus on infrastructure investment which delivers stable cashflows to investors,' he added.

Khalid Alshakrani, managing director at Instrata Capital, said, “2011 was a challenging year for investment in the region. With this backdrop we are very pleased to have closed the Sembcorp Salalah acquisition.'

'Notwithstanding a challenging economic environment, demand for additional infrastructure projects remains constant driven by strong underlying fundamentals including population and GDP growth and we are confident that there will be significant opportunities for additional infrastructure investment in 2012 and beyond,' he added.  

Alshakrani said, “At Instrata Capital, we are proud of our expertise and understanding of the infrastructure asset class which is demonstrated by our successful track record of investment in infrastructure projects.”

Based on the success of Bunyah and growing investor appetite for stable investments capable of attractive returns, the Bahrain firm is planning to launch a second GCC/Mena and Turkey-focused fund.

This fund will also focus on infrastructure assets making use of Instrata Capital’s strong investment pipeline, said Hajee.

Instrata’s existing investment portfolio also includes two significant IWPP investments in the Gulf region.

In June 2009 Instrata Capital had closed the acquisition of a stake in the Al Dur IWPP in Bahrain and in August 2010 the company acquired a stake in the Barka 1 IWPP in Oman.-TradeArabia New Service