Phoenix Power is the largest power plant in Oman, with an installed capacity of 2,000 MW. As the largest power plant in Oman, the contracted power capacity represents c.27.8% of Oman’s MIS total currently contracted capacity of approximately 7,197 MW based on OPWP’s 7-year statement (2014-2020).
Strong and experienced project foundersPhoenix Power has the backing of Founders with a proven track record of implementing large and complex independent power and water plants globally and in the GCC. All Founders will remain Shareholders in the Company immediately after the IPO, with a collective holding of 65%:
Fully operational ProjectThe plant has been in full commercial operation since December, 2014. From 1 January, 2015, the plant has achieved a commercial reliability of 100% which stands testimony to the world-class plant operations.
Operated by the same founding shareholdersPlant operators Phoenix Operation and Maintenance Company LLC (POMCo), are managed by the same shareholders as Phoenix Power, creating seamless alignment between the company and the operator.
Maintained by the world’s bestThrough the O&M Agreement with POMCo, Phoenix Power has also largely insulated itself from major operating and maintenance risks, with the maintenance contracted on a long-term basis to Siemens AG, a respected name in the industry globally.
Stable and predictable cash flowsClose to 97% of the total revenues of Phoenix Power in FY 2015 (excluding fuel revenue, which is virtually a pass-through) will be through capacity charges from OPWP for the contracted power capacity of the Plant. These capacity charges are payable regardless of orders or output of the Plant. Phoenix Power’s capacity charges are calculated so that they cover its debt service and other fixed costs, such as operating and maintenance, insurance, taxes and capital returns.
Robust contractual framework and long term power purchase agreementOman is a pioneer of private power privatization in the GCC. The project benefits from the proven contractual framework adopted by the Government, and leverages the strong track record of the country in tendering of IPPs and IWPPs.
The output from Phoenix Power’s installed capacity is contracted with OPWP, through a single long-term PPA which expires on 31 March 2029. Beyond the PPA period, Phoenix Power shall either extend its PPA with OPWP or sell its output in a liberalized market in a power pool or to eligible customers. Its decision to do so will depend, amongst other factors, on the evolution of the market regulations set by the Authority for Electricity Regulation, Oman (AER).
Strong and consistent demand for electricityOPWP indicates that there is a significant surge in demand expected for electricity in Oman, underlined by many factors such as a growing economy, increase in population, more personal income, capital investment, housing, infrastructure and industrial spending and tourism developments.
In 2013, peak and annual demand in MIS for electricity were 4,455 MW and 22.7 TWh respectively. According to IPA’s analysis, this is expected to increase to 13,729MW and 66.1 TWh, respectively, for peak demand (including minimum reserve margin requirement) and annual demand in MIS at the end of the PPA period. IPA anticipates that the capacity of existing plants and firm new builds in the MIS will not be sufficient to cover demand thereafter.
Therefore, based on the results of the IPA’s study, Phoenix Power is expected to remain economically useful in the post-PPA period.
Long-term availability of natural gasNatural gas is the primary fuel used at the plant. A long term NGSA entered into by Phoenix Power secures the supply over the contracted PPA period.
Experienced and Skilled Operational PersonnelPhoenix Power benefits from an experienced management team in addition to the experienced personnel employed by POMCo. Collectively, the plant benefits from extensive management expertise and operational knowledge accumulated through decades of collective experience.
