The Challenge

The client, Phoenix Power Company, was awarded the Build Own Operate (BOO) contract to construct and operate the 2,000 MW Sur Independent Power Project (IPP) in 2011. Under the terms of this contract, the client was obliged to offer for sale at least 35% of the total issued share capital to the public by the way of an Initial Public Offering (IPO) on the Muscat Securities Market. IPA were engaged by the client to prepare a market study and forecast net revenues over the plant’s projected lifetime in support of the IPO.

Our Solution

IPA created a model of the Omani Main Interconnected System (MIS) using its proprietary integrated power and desalinated water model, ECLIPSE™ (Emissions, Constraints and Legislation Interactions in Power System Economics).  The model forecasts the dispatch and capacity development profile that minimises the present value of total system costs (including fuel, operation and maintenance and return on capital for new investments) over the forecast horizon.

Taking account of future demand for electricity and incorporating fuel price projections and planned capacity expansions, the model was used to forecast dispatch and net revenues for the plant over its projected life.  The results of the analysis were included in a market report for the prospectus, thereby helping potential investors establish a view on the plant’s value after expiry of its power purchase agreement (PPA).

The offering was 18 times oversubscribed and completed in June 2015 with the listing of the company’s shares on the Muscat Securities Market.