Oman Signs $500M Deal to Plug into GCC Power Grid

Muscat, 12 September 2025: In a landmark move, Oman has signed a financing agreement worth 500 million US dollars with Sohar International Bank and the Gulf Cooperation Council Interconnection Authority (GCCIA). The deal will fund a major electricity interconnection project that will connect Oman’s grid to the wider GCC electricity network, marking a big step for regional energy security and cooperation.

What Is Being Built

The project will include the construction of a 400-kilovolt double-circuit transmission line stretching about 530 kilometres. It will link the Al Sila station in the United Arab Emirates to a new Ibri station in Oman. Two new substations will also be developed, one in Ibri, Oman, and another in Baynonah, UAE, while the existing Al Sila substation will be expanded to handle the new capacity.

This infrastructure will allow much larger volumes of electricity to move across the region. It is designed to improve reliability, strengthen regional integration, and enable power trading among GCC countries.

Why It Matters

Stronger Regional Integration
The new line will give Oman a direct and stable link to the GCC’s shared grid. This reduces reliance on indirect connections and positions Oman as a more active player in the region’s energy market.

Boosting Energy Security and Reliability
As electricity demand rises and climate challenges put stress on grids, countries need backup supply routes. This project will make it easier to handle emergencies and reduce system vulnerabilities across the Gulf states.

Economic and Environmental Gains
By sharing electricity resources, Oman and its neighbours will reduce the need to build additional power plants. The project also supports renewable energy use by allowing solar and wind power to flow across borders. This can cut costs, improve efficiency, and create savings for both governments and households.

Key Facts and Timeline

• Voltage: 400 kilovolts, double-circuit line

• Length: Approximately 530 kilometres from Al Sila in UAE to Ibri in Oman

• Major stations: Al Sila, Ibri, Baynonah

• Financing: 500 million US dollars arranged through Sohar International Bank and GCCIA

• Status: Currently in the financing and planning phase, with construction expected to begin once technical and environmental approvals are secured

Challenges to Consider

Building a transmission line of this scale is complex. It involves crossing difficult terrain, securing land approvals, and ensuring environmental compliance. Grid stability at both ends will require advanced technology and coordination.

Cross-border projects also require agreement on tariffs, safety protocols, and emergency procedures. While the long-term benefits are clear, upfront costs and training for technical staff are expected to be significant.

What Comes Next

The next steps include finalizing designs, completing environmental impact studies, and issuing tenders for construction. Work on substations and transmission lines is expected to take between 18 to 30 months. Once built, the system will undergo testing before being rolled out in full operational mode.

For Oman, this connection is not only about electricity. It represents more influence in the region’s energy landscape, stronger resilience for its grid, and new opportunities for economic growth.