The Barka plant is considered one of the first IWPPs to be developed in the region and marks Instrata Capital’s second investment in a regional IWPP despite the challenging economic climate.
The 456 Megawatt, 20 Million Imperial Gallons per Day (MIGD) combined cycle gas turbine power and water desalination facility is located North East of Muscat in the Sultanate of Oman. The facility has been operational since 2003 on a Build, Own and Operate (BOO) model, and is considered one of Oman’s most important infrastructure developments. Currently, Barka 1 meets 11% of Oman’s total electricity requirements and 17% of the Sultanate’s water demand, with a long term power and water purchase agreement with Oman Power and Water Procurement Company (OPWP).
“At Instrata Capital, we look to invest intelligently in infrastructure projects that support real economic growth and development. The Barka 1 IWPP is an important infrastructure asset for the Sultanate of Oman, and a strategic addition to our existing investment portfolio. Despite the challenging economic climate, there remains strong investor appetite for such stable and cash generating investments,” said Mr. Suhail Hajee, Chief Executive Officer at Instrata Capital.
“The Barka 1 IWPP is considered a benchmark throughout the Middle East as it was one of the first privately developed combined power and water projects to be established using the Build, Own, Operate (BOO) model. The BOO model has since been used successfully in a number of new IWPP and IPP projects around the region,” continued Mr. Hajee.
Instrata Capital recently reached an agreement with ACWA Power International (ACWA Power), a developer, owner and operator of independent water and power projects based in the Kingdom of Saudi Arabia, to jointly acquire a 58% interest in Barka 1, of which Instrata Capital holds an 8% stake.
Mr. Khalid Alshakrani, Managing Director at Instrata Capital, said, “The GCC has seen a sharp rise in the amount, both in quantity and value, of infrastructure investments in recent years. Our internal research shows that there is significant demand for infrastructure developments including those related to power generation and water desalination in these developing countries. With an estimated total in excess of $2 trillion set to be invested in infrastructure projects throughout the GCC and MENA region, we can say with confidence that infrastructure spending is a major growth driver for the region and an attractive investment opportunity.”
“At Instrata Capital,” continued Mr. Alshakrani, “we carefully examine each investment before we commit our resources to it, ensuring not only that the project is viable, but that it will ultimately benefit the people it is meant to serve. The Barka 1 IWPP is one such project, and we feel strongly that it is essential to the further growth and prosperity of the Sultanate of Oman.”
Instrata Capital’s growing investment portfolio includes two significant IWPP investments to date, the Al Dur IWPP in Bahrain and the Barka 1 IWPP. Based on the success of Instrata Capital’s initial fund, and growing investor appetite for stable investments capable of attractive returns, Instrata Capital is considering launching a second GCC/MENA and Turkey focused fund. Pending local regulatory approvals. This fund will also focus on infrastructure assets making use of Instrata Capital’s strong investment pipeline.
Instrata Capital focuses its activities on pursuing innovative and value-generating infrastructure investments across the MENA and Turkey region. The team is currently evaluating projects in Saudi Arabia, UAE, Turkey, Oman, Jordan and Morocco for investment.
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