Oman to receive electricity connection boost after $500m GCC grid deal

14/09/2025 01:34 AST

A $500 million financing deal has been struck to help fund a direct electricity interconnection project between the Gulf Cooperation Council and Oman.

The GCC Interconnection Authority and Sohar International Bank have signed an agreement for the project, which includes the construction of a double-circuit 400 kilovolt power line linking the UAE's Al-Silaa station and a station that the Authority will build in Oman.

It also includes the construction of two 400 kV transmission stations in Ibri in Oman and Al-Baynunah in the UAE, equipped with advanced control, protection, and communication systems to ensure efficiency, reliability, and safety.

The agreement aims to enhance energy security at the regional level and increase opportunities for energy trade and exchange between GCC countries, in a strategic step that reflects the depth of integration, according to the Saudi Press Agency.

The agreement was signed in Muscat, in the presence of Mohsen bin Hamad Al-Hadhrami, undersecretary in Oman's Ministry of Energy and Minerals and chairman of the GCC Interconnection Authority, as well as heads of energy and electricity companies in the country, and the executive management of Sohar International Bank.

According to SPA, Al-Hadhrami "explained that this project represents a qualitative leap in the integration of electricity networks across the GCC countries and enhances the Sultanate of Oman's position as a pivotal hub for energy exchange."

He added that the direct connection will contribute to raising the efficiency of the networks and achieving tangible economic and environmental savings, in line with the objectives of Oman Vision 2040 and the shared visions of the GCC countries in the field of sustainable energy.

The agreement was signed on behalf of the GCC Interconnection Authority by its CEO Ahmed bin Ali Al-Ibrahim, and also by Abdul Wahid bin Mohammed Al-Murshidi, CEO of Sohar International Bank.

The project will be equipped with a dynamic compensator station to enhance network stability and increase transmission capacity, providing a total capacity of up to 1.6 gigawatts.

The GCC Interconnection Authority CEO stated that the signing of the agreement reflects the institutional confidence in the project and its regional importance, according to SPA.

Al-Ibrahim "affirmed that implementation will proceed according to the approved timetable, which will enhance the reliability of supplies and enable the integration of renewable energy on a wider scale," said the report.

Sohar International's CEO stated that his company's financing of this project stems from its ongoing commitment to supporting infrastructure projects that contribute to achieving Oman Vision 2040 and driving the Gulf economic integration.

Al-Murshidi noted that the project represents an important pillar of the Authority's strategy to connect the electricity grids of the GCC countries and enable them to meet challenges, including absorbing renewable energy sources and reducing carbon emissions, SPA stated.

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