ACWA Power wins Water Desalination Contract Award Environment and Sanitation

ACWA Power Barka SAOG has announced the signing of the Water Purchase Agreement (WPA) with Oman Power and Water Procurement Company SAOC (OPWP) and other project agreements for the expansion of its existing water desalination capacity by 12.5 MIGD (56,825 m³/day) (Expansion Project Phase II).A separate Usufruct agreement for the use of the project land will be signed between the company and Ministry of Housing, while the Water Connection Agreement will be signed with the Public Authority for Electricity and Water, ACWA Power Barka said in a filing to the Muscat bourse yesterday.

The Expansion Project Phase II is an Independent Water Project (IWP) to be developed on a BOO (Build, Own, Operate) basis and will be located at Barka, 65 km north of Muscat. The Expansion Project Phase II will be constructed adjacent to the company’s existing plant and will benefit from its synergies.

The additional water capacity produced by the Expansion Project Phase II will help in meeting the projected shortfall in Oman’s water desalination production capacity and the steadily increasing annual demand for potable water. The Board of Directors in their meeting held on December 15, 2014, gave the go-ahead for the signing of the project agreements required for the Expansion Project Phase II, obtaining a loan to finance the Expansion Project Phase II and entering into a Supplemental O&M Agreement with a related party to operate and maintain the Expansion Project Phase II.

The term of the WPA will effectively expire with the existing Power and Water Purchase Agreement (PWPA).The Expansion Project Phase II will be funded by a syndicated loan from local financial institutions. Considering a very challenging timeline of completion, construction of the Expansion Project Phase II has gained momentum from the date of signing of the agreements.

The company is targeting to complete this 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), a subsidiary of First National Company for Operation & Maintenance Services LLC, 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.

The Expansion Project Phase II will be built according to Omani Environmental Regulations.