HomeWorld RegionsAsiaAES bags its first contract worth $425 million in Oman

AES bags its first contract worth $425 million in Oman


December 04, 2000

A subsidiary of AES Corporation, AES Barka (SAOC), has bagged the contract for the Barka Power and Desalination Project – Phase 1 in the Sultanate of Oman.

The proposed natural gas fired, combined cycle plant to be built at a cost of $425 million will supply 427 MW (net) of electricity and 20 gallons per day (mgd) of water. The Oman Ministry of Gas will supply the natural gas for the facility under a 15-year contract.

The electric power generated and the water produced will be sold to the Ministry of Electricity and water under a 15-year contract. The bid by AES for the project was submitted to the Tender Board of the Government of Oman in the month of September 2000 while the project agreements with the Ministry of Electricity and Water have been signed recently. The construction is expected to start in April 2001.

AES will have a stake of 90 per cent in the project company and will also operate the plants. The remaining 10 per cent of the stake will held by Bahwan group, a leading local business. AES plans to divest 39 per cent of equity in the project to the general public, by the end of the first year of operation. Enelpower of Italy and Hitachi Zosen of Japan will construct the facility for AES at a site near the town of Barka under a turnkey engineering, procurement and construction (EPC) contract.

Commercial operations from the plant are expected to start in April 2003. However, the completion of the project depends on certain governmental approvals. According to the Project Director of AES Oasis for Barka Project, the project is significant as it is one of the first projects in the world under the build, own and operate (BOO) model. This project marks the first major water supply business for AES in the world.

AES is a major power company in the world. Its businesses include competitive generation, distribution and retail supply businesses in Argentina, Australia, Bangladesh, Brazil, Canada, China, Dominican Republic, El Salvador, Georgia, Hungary, India, Kazakhstan, the Netherlands, Mexico, Pakistan, Panama, Sri Lanka, the United Kingdom, the United States and Venezuela.

The company owns generating assets in one hundred and thirty seven facilities having a total capacity of more than 49 gigawatts. The electricity distribution network of the company comprises more than 920,000 km of conductor and associated rights of way and sells more than 126,000 gigawatt hours per year to more than 17 million end-use customers. Apart from this, the company also sells electricity to more than 154,000 end-use customers through its retail electricity supply businesses.

It recently made an offer to acquire all outstanding Gener S.A. ADSs in return for AES common stock having a value of US$16 per ADS. It has also initiated an offer to acquire 3,466,600,000 Gener shares at the Chilean Peso equivalent of US$0.235294118 per share in cash. It has also begun the construction on a $340 million electric power plant and liquefied natural gas importing facility located in the Dominican Republic.

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