Muscat – Two Omani independent power producers, Al Suwadi Power Company and Al Batinah Power Company, have applied to the Authority for Public Services Regulation (APSR) for preliminary consent to refinance their existing debt. The companies also said their proposed merger has the backing of new lenders but still awaits APSR approval, according to filings with the Muscat Stock Exchange on Tuesday.

Both companies submitted their applications to APSR on October 4. They are targeting completion of the refinancing by the end of October 2026 and said they have made “good progress” toward that goal.

The new financing would replace their existing arrangements and also cover capital expenditure needs during the ‘New PPA period,’ a reference to the new Power Purchase Agreements (PPAs) that will govern their operations.

Both companies signed the new PPAs with Nama Power and Water Procurement Co (Nama PWP) on April 7, 2026. The agreements take effect on April 1, 2028, immediately after the existing PPAs expire, and run until March 31, 2043. Under the new agreements, the contracted capacity of each plant will be 746.53MW. The PPAs provide long-term revenue visibility for power producers by ensuring continued offtake of electricity under agreed commercial terms.

If the refinancing goes through, both companies said it “may enhance dividend distributions in 2027,” subject to shareholder approval. They cautioned that the process is still under way, that there is no assurance a transaction will be undertaken or completed, and that any deal will require approvals from regulators, lenders and each company’s board of directors.

On the proposed merger, Al Suwadi Power and Al Batinah Power said they have appointed AMJ as legal adviser and KPMG as financial consultants for both sides. They have also obtained a no-objection from the new lenders, subject to agreed terms, conditions and documentation. However, they are still awaiting the required APSR approval on merger.

Earlier in September, the Financial Services Authority (FSA) granted in-principle approval for the Al Suwadi-Al Batinah Power merger, subject to fulfilling all requirements and obligations under the Companies Law and other relevant legislation and regulations.

The merger would bring together two power generation companies with similar assets, business operations and founders. Al Suwadi Power operates the 750MW Barka III Independent Power Plant (IPP), while Al Batinah Power operates the 750MW Sohar II IPP.

In May, the companies said potential synergies and operational efficiencies from the merger had already been factored into the economics of their new 15-year PPAs with Nama PWP.

Both companies, in their Tuesday disclosures, said they will keep the market and their shareholders informed of any material developments in accordance with applicable regulatory requirements.