Work on the $415 million Barka power and desalination plant in Oman has started. AES Barka, a subsidiary of AES Corp of the US, said that the launch marked successful financial closure for the project.

The company has entered into a loan agreement with ANZ Investment Bank and Arab Banking Corporation acting as lead-arrangers to secure $348.6 million in financing for the plant that will supply 427 MW of power and 20 million gallons per day (gpd) of water. Commercial operations are expected to start in April 2003.

The power plant is being designed and built by a consortium of Enelpower of Italy and Hitachi Zosen of Japan.

Meanwhile, two new contracts for the project are to be signed shortly. KEC International of India has been awarded a RO17.24 million contract to construct a 220/132 kV electrical transmission system which will link the plant to the northern power grid.A joint venture of Bogest Trading & Contracting of Oman and ERCO of Turkey has won a RO19.2 million contract to construct water storage and transmission infrastructure for the desalination plant.