Muscat: Qatar Fund for Development (QFFD) has signed a loan agreement with the GCC Interconnection Authority to finance the expansion of the electricity grid in the brotherly Sultanate of Oman, as part of efforts to enhance regional cooperation and sustainable development. The total project cost is estimated at $560m, with the fund contributing a loan of $100m.
In a press release today, QFFD said: “This project is a strategic step toward the integration of the GCC energy networks and a vital strategic initiative aimed at enhancing the integration of regional energy grids, increasing the reliability and sustainability of electricity systems in the region.”
The project will provide significant benefits for Oman and the GCC countries, achieving savings of hundreds of megawatts from additional generation capacities, thereby reducing the need to build new power plants. It will also facilitate and enhance electricity exchange between GCC countries and Oman, increasing the flexibility of electrical systems and improving their stability. Additionally, it will reduce operational costs by cutting down the operational expenses of connected countries and generate significant annual financial savings. An important benefit of the project is its contribution to reducing carbon emissions, supporting environmental conservation goals.
Oman’s Minister of Energy and Minerals, H E Eng Salim bin Nasser Al Oufi confirmed that the signing of the financing agreement represents a strategic step within the GCC energy integration policies. He pointed out that the project enhances energy security and sustainability, supporting the GCC countries’ plans to develop energy infrastructure in an efficient and reliable manner.
He also praised the central role of the GCC Interconnection Authority in implementing joint interconnection strategies, emphasizing that this project strengthens the stability of electrical networks and supports the GCC’s drive toward integrated energy markets.
He added that the contribution of QFFD reflects the importance of partnership in financing vital energy projects that contribute to sustainable development and enhancing the flexibility of the regional electricity system.
For his part, Undersecretary of Oman’s Ministry of Energy and Minerals and Chairman of the GCC Interconnection Authority H E Mohsen bin Hamad Al Hadrami noted that the electricity interconnection project is one of the most important infrastructure projects approved by the GCC leaders. Since its operation in 2009, the electricity networks of GCC countries have been linked to a shared Gulf network, aimed at maintaining energy security for the electricity grids of GCC countries and achieving the highest levels of reliability, dependability, and efficiency.
The Authority has successfully avoided power outages in member states’ networks by providing immediate support to transfer required energy through the interconnection network, with more than 2,800 support cases provided since the system’s inception, he pointed.
He added that the Authority is keen to meet the growing requirements of electricity networks in all GCC countries. It has prioritized the expansion and development of the electricity interconnection between member states and the region’s electricity networks, leading to the implementation of several major projects to expand the grid, including the direct interconnection with the Sultanate of Oman. These projects will raise the capacity of the GCC interconnection network and provide member states with increased capacity in emergency situations.
In turn, CEO of the GCC Interconnection Authority, Eng. Ahmed Al Ibrahim, said that the project, which is expected to begin construction in the second half of 2025 and enter into service in the first half of 2027, will effectively contribute to improving network stability by reducing the impact of major outages and ensuring continuous operation under various conditions.
On the other hand, Director General of Qatar Fund for Development, Fahd bin Hamad Al Sulaiti stated that the signing of the agreement is part of Qatar Fund for Development’s commitment to strengthening the economies of Arab and developing countries by providing the necessary financing and loans to implement development programs. “This initiative is based on a shared belief in the importance of regional cooperation, with energy being a fundamental element to achieving stability and economic and social development in our countries,” he said.
