MUSCAT, SEPT 12
The Gulf Cooperation Council Interconnection Authority (GCCIA) and Sohar International have signed a $500 million interim financing agreement to fund the implementation of a landmark electricity interconnection project linking Oman to the wider GCC power grid.
The agreement was signed on Thursday, September 11, 2025, at a ceremony presided over by Eng Salim bin Nasser al Aufi, Minister of Energy and Minerals and attended by Mohsin bin Hamad al Hadhrami, Under-Secretary of the Ministry of Energy and Minerals (who is also Chairman of the GCCIA) and board members and Authority officials.
The pact was inked between Eng Ahmed bin Ali al Ebrahim, GCCIA CEO and Abdulwahid bin Mohammed al Murshidi, Sohar International CEO.
Ahmed Al Ibrahim, GCCIA CEO, commented: "The project, set to commence implementation towards the end of this year and be finished by 2027, will cover the construction of overhead transmission lines and two key substations, Al Baynoona and Ibri. The agreement is a major step forward towards the GCCIA's endeavour to expand and upgrade the Gulf's power grid. The project has also received financial assistance from the Qatar Development Fund, with further funding pursued from other Arab and Gulf funds".
The project includes the installation of two 400kV transmission lines between Oman's new Ibri station and Al Silaa's GCCIA station in the UAE, 530 kilometres away. It also involves the building of high-grade substations in Ibri and Al Batinah North & South with advanced control, protection and communication devices, in addition to a dynamic compensation station to enhance grid stability. Once built, the interconnection will provide up to 1,600 megawatts of capacity, adding power reliability, enabling energy trading and supporting economic and industrial growth in Oman and the region.
Mohsin bin Hamad al Hadhrami, Under-Secretary of the Ministry of Energy and Minerals, added: "The project represents a dramatic step in the grid integration of the electricity networks of the Gulf region. It raises the profile of Oman as an energy trade hub — a national achievement of the highest order with economic dividends that go far, particularly through the Sultanate of Oman's growing ability to embark on renewable energy projects".
He added: "The step also enhances the efficiency of power grids in the GCC countries, which aligns with greater moves to adopt sustainable development, reduction of emissions and preservation of the environment. Besides facilitating electricity trade between the GCC, the project will also open the way for increased energy exchange in the wider regional market outside the Gulf. It also provides Oman with a strategic edge since it enables the country to draw power from surplus electricity during periods of peak demand throughout the year".
Sohar International CEO Abdulwahid al Murshidi confirmed the bank's backing for regional and national development. "Financing this landmark project reflects the bank's commitment to supporting infrastructure projects aligned with Oman Vision 2040".
He further stated that the project is a pillar in the GCC's strategy for connecting the power network, allowing the region to enhance energy security, provide for renewable resources and reduce carbon emissions.
The project represents the government's vision to accelerate infrastructure delivery and regional integration. It is also a prototype of public–private partnership, founding national vision on the support of the financial sector.
Oman Observer is now on the WhatsApp channel. Click here
