Abu Dhabi’s US$110 billion state-owned investor ADQ is seizing opportunities in Oman worth over US$8 billion and bolstering bilateral economic and political relations, in partnership with the local US$29 billion sovereign wealth fund Oman Investment Authority (OIA).
Joint investment collaboration in low carbon electricity generation, utilities, and metal production were all sited as target areas by officials of both organizations during visit of Abu Dhabi leader and UAE President Sheikh Mohamed Bin Zayed to Oman.
ADQ and OIA signed a partnership agreement worth OMR1 billion (US$2.7 billion) and identified initial investment opportunities worth OMR3 billion (US$8 billion) and agreed to proceed with the feasibility studies.. The Abu Dhabi investor is exploring sectors such as food, tech, health and logistics as it seeks to expand its footprint in Oman. This week, the fund signed an agreement with OIA subsidiary the Oman Information, Communication and Technology Group (ITHCA) to establish a US$160 million venture capital fund to invest in high-growth tech startups in Oman.
Oman has recently attracted interest from other strategic sovereign investors in the region, which could support OIA’s drive for strategic investment. In August, Saudi Arabia’s Public Investment Fund invested US$300 million in Oman’s private equity infrastructure fund Rakiza. Rakiza is co-managed by OIA subsidiary Oman Infrastructure Investment Management and Equitix, and focuses on the renewables, power and water, social infrastructure, telecommunications, and transport and logistics sectors.
A high-profile Kuwaiti delegation including the Kuwait Investment Authority (KIA) visited Oman last year. During the visit, the Acting Managing Director and executive director of the General Reserve at the KIA, Bader Al-Ajeel said: “Kuwait has a great interest in exploring the new investment opportunities in the Sultanate of Oman, and search for opportunities that contribute to the Authority’s interest in attractive returns… We attach great importance to our GCC partnerships, with the aim of creating a system of strategic security cooperation in important and vital sectors such as logistics and food security.”
OIA has emerged as the main facilitator of foreign sovereign investor capital in Oman. It was launched in June 2020 as a merger of the Oman Investment Fund and the State General Reserve Fund. The SGRF has been used largely as an oil revenue stabilization mechanism and to diversify the economy away from oil and gas in more than 25 countries worldwide. The OIF on the other hand was the successor of the Oman Oil Fund and invested in long-and medium-term projects at home and abroad.
OIA has become increasingly active as an investor, both domestically and regionally. In February, it announced a collaboration with US-based food company MycoTechnology to set up innovative food production in the country. The Vital Foods Technologies company will aim to produce alternative protein using dates from the country with the aim of enhancing food security, achieving national sufficiency and reducing date waste. The collaboration boosts OIA’s role in attracting foreign investment and building strategic partnerships.
One of the key goals over the coming five years will be privatizing and/or floating 30 of the 160 government companies it currently holds. This is in line with OIA’s efforts to attract expertise, technology, and foreign investment to the country’s strategic sectors. A good example was the sale of 49% of Oman Electricity Holding Company (Nama) to China State Grid in December 2019 for US$1 billion.
