"I think they use the time to recommit and understand what the solar project means to Oman. They are committed to doing the project. They need to understand the impact and the financing, before taking a final decision," said Andrew Charles Rackham, Director, Projects Development, Oman Power and Water Procurement Company (OPWPC).
He was speaking to the media on the sidelines of Oman Power & Water pre-summit focus conference here yesterday. The conference is organised by Global Exhibitions & Conferences (GEC) in partnership with IQPC Middle East.
The capital expenditure for building the solar project must have substantially come down from an earlier estimate of $1 billion.
When OPWPC first estimated the cost eight months ago on the basis of the then prevailing photovoltaic (PV) price of $5,000 per KW, the cost for building the solar project was in the region of $1 billion.
"But we are already seeing the price of PV dropping and probably, will drop through the $3,000 floor, down to $2,000. Then, you are looking at a project in the region of $500 million to $600 million," Rackham explained.
He also noted that a contract to build the plant would probably be awarded 14 months after the project gets governmental approval. "Since it is the first project (in Oman), it is taking little more time."
The government is opting for an independent power project (IPP) model for developing the project. The project will be awarded through a competitive tender for a long term power purchase agreement.
Addressing the conference, Qais Saud Al Zakwani, Deputy Executive Director of Authority for Electricity Regulation, said a detailed feasibility study conducted by the authority found that there is a significant potential for developing solar energy sources in the country. In order to facilitate large-scale projects, Oman needs clear policies.