• German investors plan $2 billion solar energy project in Oman

  • Oman Daily Observer, By A Staff Reporter on January 15, 2012
  • Integrated project claims to manage A to Z requirement locally

    MUSCAT — Terra Nex Financial Engineering AG Switzerland (Terra Nex), in collaboration with Middle East Best Select (MEBS) Group of Funds, has announced its plans for a major $2 billion project to develop solar power resources in the Sultanate.

    Terra Nex, a Swiss licensed and global wealth management company that is specialises in identifying and developing investment opportunities in the Middle East, has developed an integrated solar energy project consisting of the local implementation of the entire value chain in the renewable energy sector.

    Solar power electricity generation stations are central to the project. The project aims to generate approximately 400MW. Industrial plants to manufacture the solar panels and aluminium frames to be used by the power station will also be established for local consumption and export.

    Knowledge and technology transfer is another critical aspect to the success of this project. The project aims to tie up with major international technology companies and international universities with expertise in renewable energy education, to help train the local population in service this bourgeoning industry.

    A delegation of 70 German investors held meeting with representatives of Public Authority for Investment Promotion and Export Development, Oman Power and Water Procurement Company, Public Authority for Electricity and Water and Special Economic Zone at Al Duqm

    Shaikh Hilal bin Khalid bin Nasser al Maawali, local partner to Terra Nex and MEBS, who has helped direct the project in Oman, said in his comments, “This is great beginning for 2012 for Oman. With a major $2 billion international investment strong indication of commitment coming to Oman so early in the year, we have yet again highlighted the potential for attractive investment in the Sultanate.”

    “This project touches so many aspects of Omani society – from economic growth to energy generation; from industrial diversification to education and jobs creation; from optimum utilisation of natural resources to technological innovation – the chance for exponential growth is all but definitive,” added Shaikh Hilal.

    “To ensure the project’s achievability, MEBS has also launched a private investment fund named Solar Energy-Photovoltaik In Oman as an added incentive. With a total initial investment of $200 million, this fund will finance the first solar power station” said Shaikh Hilal.

    David Heimhofer, Chairman of Terra Nex and Managing Director of MEBS Group said, “Oman’s stable business environment and pro-environmental policies makes the Sultanate a natural partner to this project. The government’s aim to produce 10 per cent of its energy needs from renewable energy resources by 2020 is laudable. And this project will go a long way in making that vision a reality.”

    The whole project will be financed by world investors and financiers. Majority of the parties involved are from Germany with the main investors being Middle East Best Select Fund and other European investors.

    While MEBS is funded by a group of German institutional and individual investors, other investors include prominent German and European leading institutions.

    “With investors providing the necessary investment of approximately $2 billion, in which $600 million will be direct equity capital and the remaining covered by loans from European financiers, this project will be a boost to Oman’s economy” said Heimhofer.

    “By attracting FDI in the developing and growing renewable energy sector, Oman can become not just a regional leader in the field using the German expertise and learning from their experience, but also explores a great intrinsic value within the complete value chain associated with this economic sector, in addition to generating new jobs for the Omani people and boosting its exports” he said.

    Terra Nex and MEBS have agreed with the local partner, Sheikh Hilal al Maawali, to offer 40 per cent of the capital for public subscription in the future after not more than four years from the operation of the project. The IPO will be a boon to the Omani economy by enhancing the capital markets base in the Sultanate International partners in Technology Siemens AG is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. For over 160 years, Siemens has stood for technological excellence, innovation, quality, reliability and internationality. The company is the world's largest provider of environmental technologies. More than one-third of its total revenue stems from green products and solutions.

    Siemens AG has already signaled its high interest in the project at various levels. Siemens AG, Solar and Hydro Division is keen to act as the EPC contractor to provide the PV-powerplant as a turnkey solution with strong preference for local supplies and services, thus being the basis for the establishment of the industrial resources required by the Sultanate to be a fully independent solar energy producer. “With global technology partners such as Siemens AG, this project is going to benefit from their strong technical expertise.” said Heimhofer.

    This project is set to create over 2000 work opportunities for Omanis over diverse industrial sectors and services. In order to increase the skillset of the local population to help service these new jobs, a well-known European University is proposed to setup an educational institution in the Sultanate that specialises in the field of renewable energy engineering.

    Apart from this international prestigious university, Terra Nex is also proposing training opportunities with global companies such as Siemens. Giving them real-world expertise, the German technology partners and suppliers are committed to train the Omani youth in their technologically advanced factories.

    “The new institute for solar energy in conjunction with international training will give the Sultanate the necessary expertise and well educated human capital to establish a manufacturing base with the ability to produce and export clean energy to regional countries, and gives the Omani youth a competitive edge in the region job market. These new jobs will create a new revenue stream for the national economy and help place Oman as a leader in the field of the renewable power technology sector; an expertise that will be marketable in the region,” the local partner said.