MUSCAT: New awards for power and water supply contracts secured by Barka Power & Water Company SAOG (BWPC), which owns and operates the Barka 1 Independent Water & Power Project (IWPP) in South Al Batinah Governorate, are collectively valued at $356 million.
An announcement to this effect was made by ACWA Power, the Saudi-headquartered developer of power generation and water desalination capacity, in a filing to the Saudi bourse, Tadawul, earlier this week. ACWA Power has a 41.91 per cent stake in Barka Power & Water, which operates a 427 MW capacity gas-fired power project alongside a multi-stage flash (MSF) and seawater reverse osmosis desalination plant at Barka.
“ACWA Power is pleased to announce that its subsidiary, Barka Water and Power Company SAOG (BWPC), has received a letter of award from Nama Power and Water Procurement Company, Oman (PWP) for extending the Power and Water Purchase Agreement (PWPA),” said the Saudi developer in its filing on Wednesday.
“The award includes extending the operation of the power plant for 8 years & 9 months term with operations starting from June 1, 2024 and the water plant for 3 years term starting from September 1, 2024 with extension option at PWP’s discretion for a further term of 3 years and another term of 2 years & 9 months (total 8 years and 9 months term).” In a simultaneous filing to the Financial Services Authority (FSA) in Oman, Barka Power and Water, a publicly traded company, noted that it had accepted the Letter of Award and was working with PWP on the “finalization and approval” of the contract extensions and other project agreements.
Importantly, the announcement comes as a shot in the arm for a number of Omani gas-fired power producers nearing the end of their contracts with PWP, the sole buyer of electricity and water output.
Earlier this month, SMN Power Holding SAOG announced that its 99.9 per cent owned Al Rusail Power Company had secured a new Power Purchase Agreement (PPA) for a six-year term starting from April 20, 2024. Al Rusail Power operates a 665 MW capacity gas-fired power plant at Rusayl on Muscat’s outskirts.
Both sets of awards stem from PWP’s Power 2024 and Water 2024 procurement processes designed to encourage existing players with expired or close-to-expiry supply agreements, to offer their capacity for possible extensions or new agreements.
Barka Power and Water, with a 427 MW gas-fired power generation facility and 20 MIGD (million imperial gallons per day) Multi-Stage Flash Distillation (MSF) water facility, commenced its commercial operations on June 11, 2003. A seawater reverse osmosis (SWRO) plant of 10 MIGD was brought into operation on May 29, 2014, as part of the first phase expansion of the project. Two years later, on February 26, 2016, another SWRO plant of 12.5 MIGD was added.
Under the latest awards, the multi-stage flash evaporator (MSFE) water plant receives an award extension for a three-year term starting from September 1, 2024 with an extension option at PWP’s discretion for a further term of 3 years and another term of 2 years & 9 months (total 8 years and 9 months term).
Also holding stakes in Barka Power & Water, alongside ACWA Power, are the Civil Services Pension Fund, and Ministry of Defence Pension Fund.
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