Qatar Fund for Development Signs a Loan Agreement with the GCC Interconnection Authority to Expand the Electricity Grid in the Brotherly Sultanate of Oman

Muscat, Sultanate of Oman

Qatar Fund for Development has signed a loan agreement with the GCC Interconnection Authority to finance the expansion of the electricity grid in the brotherly Sultanate of Oman, as part of efforts to enhance regional cooperation and sustainable development. The total project cost is estimated at 560 million USD, with the fund contributing a loan of 100 million USD.

The project consists of the construction of two 400 kV electrical transmission lines connecting the Al-Sila station of the GCC Interconnection Authority in the UAE to the Ibri station, which will be built by the Authority in Oman, with a total length of 530 kilometers. The project includes the construction of two 400 kV electricity transmission substations in both the Ibri and Al-Bayouna areas, equipped with advanced control, protection, and communication systems to ensure reliability, efficiency, and safety. It will also include dynamic compensation stations to enhance network stability and increase transmission capacity, providing an overall transmission capacity of up to 1,700 MW, with a net capacity of 1,200 MW.

This project is a strategic step toward the integration of the GCC energy networks and a vital strategic initiative aimed at enhancing the integration of regional energy grids, increasing the reliability and sustainability of electricity systems in the region. It comes in response to global calls for the development of energy infrastructure and the achievement of sustainable development goals.

The project will provide significant benefits for Oman and the GCC countries, achieving savings of hundreds of megawatts from additional generation capacities, thereby reducing the need to build new power plants. It will also facilitate and enhance electricity exchange between GCC countries and Oman, increasing the flexibility of electrical systems and improving their stability. Additionally, it will reduce operational costs by cutting down the operational expenses of connected countries and generate significant annual financial savings. An important benefit of the project is its contribution to reducing carbon emissions, supporting environmental conservation goals.

In his statement, His Excellency Eng. Salim bin Nasser Al-Oufi, Minister of Energy and Minerals, confirmed that the signing of the financing agreement represents a strategic step within the GCC energy integration policies. He pointed out that the project enhances energy security and sustainability, supporting the GCC countries’ plans to develop energy infrastructure in an efficient and reliable manner.

His Excellency also praised the central role of the GCC Interconnection Authority in implementing joint interconnection strategies, emphasizing that this project strengthens the stability of electrical networks and supports the GCC’s drive toward integrated energy markets. He added that the contribution of Qatar Fund for Development reflects the importance of partnership in financing vital energy projects that contribute to sustainable development and enhancing the flexibility of the regional electricity system.

His Excellency Mohsen bin Hamad Al-Hadrami, Undersecretary of the Ministry of Energy and Minerals and Chairman of the GCC Interconnection Authority, noted that the electricity interconnection project is one of the most important infrastructure projects approved by the GCC leaders. Since its operation in 2009, the electricity networks of GCC countries have been linked to a shared Gulf network, aimed at maintaining energy security for the electricity grids of GCC countries and achieving the highest levels of reliability, dependability, and efficiency. The Authority has successfully avoided power outages in member states’ networks by providing immediate support to transfer required energy through the interconnection network, with more than 2,800 support cases provided since the system’s inception.

He added that the Authority is keen to meet the growing requirements of electricity networks in all GCC countries. It has prioritized the expansion and development of the electricity interconnection between member states and the region’s electricity networks, leading to the implementation of several major projects to expand the grid, including the direct interconnection with the Sultanate of Oman. These projects will raise the capacity of the GCC interconnection network and provide member states with increased capacity in emergency situations.

Al-Hadrami pointed out that this project is a strategic step towards the integration of Gulf energy networks and a vital initiative to increase the reliability and sustainability of electricity systems in the region. It responds to global calls for energy infrastructure development and sustainable development goals.

For his part, His Excellency Eng. Ahmed Al-Ibrahim, CEO of the GCC Interconnection Authority, said that the project, which is expected to begin construction in the second half of 2025 and enter into service in the first half of 2027, will effectively contribute to improving network stability by reducing the impact of major outages and ensuring continuous operation under various conditions. He added, “The project will enable the networks to accommodate growing loads and support future expansions. It will also significantly contribute to accommodating renewable energy sources by enhancing the network’s ability to receive electricity produced from clean sources such as solar and wind energy, supporting the environmental goals of the GCC countries. It will also play a significant role in increasing energy exchange and trade between GCC countries and providing electricity trade opportunities for GCC countries, especially Oman, with the Republic of Iraq.”

He further added that the financing agreement is a continuation of the ongoing cooperation between the Authority and the Fund in the current phase of the electricity grid expansion, in addition to the southern Iraq interconnection project. There are three major projects to enhance interconnection with Kuwait, the UAE, and Oman, with a total cost exceeding one billion USD.

Al-Ibrahim commended the ongoing cooperation between the Authority and the Fund, which enhances the Fund’s contribution to financing infrastructure projects in the GCC countries to achieve sustainable development goals.

On the other hand, His Excellency Mr. Fahd bin Hamad Al-Sulaiti, Director General of Qatar Fund for Development, stated that the signing of the agreement is part of Qatar Fund for Development’s commitment to strengthening the economies of Arab and developing countries by providing the necessary financing and loans to implement development programs. This initiative is based on a shared belief in the importance of regional cooperation, with energy being a fundamental element to achieving stability and economic and social development in our countries.

This project reflects the Qatar Fund for Development’s continuous commitment to enhancing regional partnerships and efforts to support sustainable development, contributing to building a prosperous and stable future for the GCC countries and the Arab nations in the region.

During the signing of the agreement, Mr. Abdullah Al-Fihani, Deputy Director General for Risk and Compliance of Qatar Fund for Development, stated: “These efforts come as part of Qatar Fund for Development’s commitment to strengthening the economies of Arab and developing countries by providing the necessary financing and loans to implement development programs. This initiative is based on a shared belief in the importance of regional cooperation, with energy being a fundamental element to achieving stability and economic and social development in our countries.”

• Geography Oman
• Timeline 2025
• SDGS Partnerships
• Sector Economic DevelopmentInfrastructure