Qatar Development Fund has signed a $100 million loan agreement with the Gulf Cooperation Council Interconnection Authority (GCCIA) to help finance the connection of the regional power grid to Oman.

The project is expected to cost more than $700 million.

It involves the construction of two 400 kilovolt (kV) overhead transmission lines connecting the GCCIA’s Al Sila station on the UAE-Saudi Arabia border to a new station at Ibri in Oman, which the GCCIA will build.

The total length of the lines will be 530km. Two 400kV substations will also be built – one at Ibri and another at Al Baynunah in Abu Dhabi.

The project is expected to begin in the second half of this year, with completion slated for H1 2027.

The connection will unlock hundreds of megawatts of additional generation capacity and reduce the immediate need for a new power plant.

GCCIA said the interconnected network will reduce operational expenditures for those connected, leading to “substantial annual financial savings” and a reduction of carbon emissions.

“It will enable our networks to handle increasing loads and support future expansion, while also seamlessly integrating renewable energy sources like solar and wind power,” said Ahmed Al Ebrahim, CEO of the GCCIA.

In addition to increasing the volume of energy exchange and trade among GCC nations, he said there was also an opportunity for electricity trade with Iraq.

The current GCCIA network connects Kuwait, Saudi Arabia, Bahrain, Qatar and the UAE.

The interconnection network prevented more than 2,800 electrical outages in the Gulf through the instantaneous transmission of required power, the GCCIA said.

There is also a plan to increase electricity transmission capacity in the UAE by expanding lines from Saudi and installing a new substation for $205.5 million. The project is expected to be finished by 2027, according to the GCCIA’s website.