$500M Pact for Oman-GCC Power Interconnection: Implications for Investors and Businesses in the Region
MUSCAT, SEPTEMBER 12 — The Gulf Cooperation Council Interconnection Authority (GCCIA) and Sohar International have finalized a $500 million interim financing agreement aimed at implementing a significant electricity interconnection project that will link Oman to the broader GCC power grid.
The agreement was signed on September 11, 2025, during a ceremony attended by Eng. Salim bin Nasser al Aufi, Minister of Energy and Minerals, alongside Mohsin bin Hamad al Hadhrami, Under-Secretary of the Ministry of Energy and Minerals and Chairman of the GCCIA, as well as various board members and officials from the Authority.
The signing partners were Eng. Ahmed bin Ali al Ebrahim, CEO of GCCIA, and Abdulwahid bin Mohammed al Murshidi, CEO of Sohar International.
In his remarks, Ahmed Al Ibrahim stated that the project is slated to begin implementation by the end of this year and is expected to be completed by 2027. The initiative will involve constructing overhead transmission lines and two vital substations at Al Baynoona and Ibri. He emphasized that this agreement marks a significant advancement in the GCCIA’s efforts to expand and enhance the Gulf’s power grid. The project has also secured financial backing from the Qatar Development Fund, with additional funding sought from other Arab and Gulf sources.
The scope of the project includes the installation of two 400kV transmission lines connecting Oman’s new Ibri station to the GCCIA station at Al Silaa in the UAE, which is approximately 530 kilometers away. Furthermore, it involves building high-capacity substations in Ibri and Al Batinah North & South, equipped with advanced control, protection, and communication technology, alongside a dynamic compensation station to improve grid stability. Once operational, the interconnection is expected to provide up to 1,600 megawatts of capacity, enhancing power reliability, facilitating energy trading, and supporting economic and industrial growth in Oman and beyond.
Mohsin bin Hamad al Hadhrami remarked that this project signifies a transformative step in the integration of the electricity networks across the Gulf region. It elevates Oman’s status as an energy trade hub and represents a significant national achievement, promising extensive economic benefits and paving the way for the Sultanate’s growing capability to undertake renewable energy initiatives.
He further noted that this development will also improve the efficiency of power grids in GCC countries. It aligns with broader goals of sustainable development, emission reduction, and environmental preservation. The project is expected to enable electricity trading among GCC nations while facilitating increased energy exchange with broader regional markets. This strategic initiative will allow Oman to draw power from surplus electricity during peak demand periods throughout the year.
Abdulwahid al Murshidi reaffirmed Sohar International’s commitment to regional and national development, stating that financing this significant project underscores the bank’s support for infrastructure initiatives that align with Oman Vision 2040. He concluded by highlighting that the project is a cornerstone of the GCC’s strategy for linking power networks, aiming to enhance energy security, promote renewable resources, and reduce carbon emissions.
Overall, this initiative aligns with the government’s vision to accelerate infrastructure development and regional integration, serving as a model for public-private partnerships that leverage financial sector support for national objectives.
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اخیر $500 million financing agreement for the GCC power interconnection will significantly enhance Oman’s position as an energy trade hub. This initiative opens فرصتهایی برای کسبوکارها to engage in cross-border energy trading, particularly benefiting those involved in renewable energy sectors. However, entrepreneurial investors should remain vigilant to potential risks tied to project execution timelines and funding dependencies, ensuring they align with evolving energy policies and market dynamics in the region.
