provide support to Phoenix Power Company SAOC in
Oman for the initial public offering (IPO) of 35% of their shares
on the Muscat Securities Market. This article provides
background and describes the work undertaken, and the
successful outcome for our client as a result.
the unbundling of generation, transmission and distribution.
transferred to, or built by, private companies (highlighted in blue in Figure 1 on the following page).
Oman, acts as the single buyer for electricity generation (and desalinated water) and is responsible for ensuring
sufficient electricity capacity in the country, at the lowest cost, in order to satisfy growing demand. The OPWP
does this by entering into power purchase agreements (PPAs) with private power generators, who commit to
providing a specified generating capacity, dispatched on demand.
the Main Interconnected System (MIS) (the most populated area of the country, where most of commercial and
industrial activities are located), where about 90% of the capacity currently contracted is owned by independent
power producers (IPPs). Whilst the OPWP is expected to retain its role as the single buyer for electricity and
desalinated water in the future, its proposals include the introduction of a spot market, which is currently being
designed and should be operational by 2017, and of more flexible processes for awarding new, or extending
existing, PPAs.
for the development of a new plant, typically for a 15-year duration. However, as power plants are expected to
operate for up to 30-40 years, there is a potential revenue stream that can be captured after the expiry of the
contract.
monetize the residual value of their assets, IPPs will have the option of either re-contracting with OPWP or, in
the light of the latest developments, participating in the spot market.