The Gulf Cooperation Council Interconnection Authority and Bank Sohar International (SIB) have signed a $500mn interim financing agreement to support the direct electrical interconnection project between the GCC grid and Oman's network, Akhbar 247 reported on September 12.

The project aims to enhance regional energy security and increase opportunities for energy trade and exchange between GCC states in a strategic step that embodies Gulf integration depth.

The scheme includes the construction of a 400-kilovolt double-circuit transmission line connecting the Al Sila station of the GCC Interconnection Authority in the UAE with the Ibri station to be built by the authority in Oman, spanning a total length of 530 kilometres.

The project will establish two 400-kilovolt transmission stations in Ibri, Oman, and Al Baynounah in the UAE, equipped with advanced control, protection and communication systems to ensure efficiency, reliability and safety.

A dynamic compensator station (STATCOM) will be installed to enhance grid stability and increase transmission capacity, providing total capacity of up to 1,600 megawatts.

The interconnection will deliver economic savings in production capacity investments and operational and fuel costs, whilst enhancing electrical energy trading capabilities between GCC states and Oman directly.

GCC Interconnection Authority Chief Executive Ahmed Al Ibrahim signed the agreement alongside Bank Sohar International Chief Executive Abdulwahid Al Murshidi. The signing ceremony was attended by Oman's Energy and Minerals Ministry Undersecretary and GCC Interconnection Authority Board Chairman Mohsen Al Hadrami.

The project represents a practical model of public-private sector cooperation, combining ambitious government vision with financial support from national banking institutions.