Overview

Oman is looking to expand its electricity-generation capacities through renewable independent power projects (IPP), with plans to derive at least 30 percent of electricity from renewables by 2030. Although the government has reined in some of its ambitious renewables targets due to fiscal austerity measures implemented since 2020, many opportunities for U.S. firms exist in this sector.

Oman has led the Gulf Cooperation Council (GCC) countries in the development of independent water and power plants and IPPs since 1994 when it launched its first IPP. The state-owned Petroleum Development Oman (PDO), which aims to slash its emissions to 50 percent of 2019 levels by 2030, was an early pioneer in large-scale solar power projects in Oman.

Commercial operations of Oman’s largest utility-scale solar photovoltaic, independent power project, Ibri 2, started in January 2022. Oman Power and Water Procurement Company (OPWP) awarded the project to a consortium of Saudi and Kuwaiti firms, for which Beijing-based Asian Infrastructure Investment Bank (AIIB) loaned USD 60 million to the project. The project is AIIB’s first renewable energy financing project in Oman and the region.

Oman has embarked on several other projects in line with targets for the year 2030, including a wind farm in Dhofar; two solar IPPs in Manah; 11 solar-diesel hybrid facilities; and the ‘Sahim’ (‘Contribute’) initiative to install small-scale solar panels on residential and commercial buildings, among others. In April 2022, OPWP, the sole procurer of new power generation capacity, invited consultants to bid for the development of Oman’s first Waste-to-Energy project.

EDO manages the government’s stake in PDO’s other upstream investments and finances their projects. EDO’s mandate includes investments in renewable and alternative energy resources, according to local media reports. The restructuring of the Ministry of Oil and Gas as MEM has raised the visibility of renewable energy resources. Oman’s integrated oil and gas company OQ is also seeking international partners to replace 40 percent of its 3 GW power consumption with renewable energy projects.

Oman is planning to build a hydrogen-centric economy by 2040, with an annual production of green and blue hydrogen of approximately 30GW by 2040. The government has announced several gigawatt-scale green hydrogen projects, including a 14GW facility powered by 25GW of wind and solar energy. Oman plans over $45 billion worth of green hydrogen and green ammonia projects, according to research agency MEED. Oman established a Directorate General for Clean Energy and Hydrogen at the Ministry of Energy and Minerals, and an EDO subsidiary called Hydrogen Development Oman to manage hydrogen projects.

Leading Sub-Sectors

Solar IPPs, wind, solar power, and green hydrogen projects are leading sub-sectors in Oman’s renewable energy sector, and they have created opportunities for U.S. businesses in the sale of equipment and services, technology transfer, research and development, and privatization of government assets.

Opportunities

Below are the names of active renewable projects in Oman that present potential business opportunities for experienced renewable energy firms as well as local SMEs, according to MEED Projects, as of May 2022.

Resources

Petroleum Development of Oman

OQ

Nama

Oman Power and Water Procurement Company

Authority for Public Services Regulation