Total foreign investment in the Sultanate of Oman has increased and renewable energy projects are at the forefront

By Manal Abdel Fattah

The Sultanate of Oman last year witnessed an increase in total foreign investment by 21.6%, reaching more than 25 billion Omani riyals at the end of the fourth quarter of last year, compared to the same period of the previous year, amounting to 2.5 billion Omani riyals.

There is no doubt that the policies followed by the government during the past years It has had an effective role in attracting many investments in various sectors, and its continuation of the same approach contributes to enhancing economic growth and attracting broader foreign investments.

The efforts of the Sultanate of Oman in the past three years have resulted in it achieving advanced ranks in various fields this year, as it advanced in the Economic Freedom Index to 39th place to rank 56th globally compared to its 95th rank last year, as amended by Standard & Poor’s.

Its first credit rating report on the Sultanate of Oman for this year has a positive outlook, with the credit rating level fixed at “BB+” after last year it was at a stable outlook and the rating at the Ba1 level.

According to preliminary statistics issued by the National Center for Statistics and Information at the end of this month, the United Kingdom topped the total foreign investment by the end of the fourth quarter of 2023, accounting for 31.7% of the total foreign investment to reach more than 12.6 billion Omani riyals, followed by the United States of America with a total investment of 4.2 billion Omani riyals, with an acquisition rate of 16.6%, and the Republic of China with 27.8%, bringing its total investments to 1.3 billion Omani riyals, then the United Arab Emirates with 958.6 million Omani riyals, the State of Kuwait with 830.9 million Omani riyals, the State of Qatar with 405.1 million Omani riyals, and the Kingdom of Bahrain with 350 million Omani riyals, the Republic of India with 314.8 million Omani riyals, and the Kingdom of the Netherlands with 307 million Omani riyals.

Foreign investments from the Republic of Switzerland amounted to 181.9 million Omani riyals, and from other countries more than 3.4 billion Omani riyals.

Data from the National Center for Statistics and Information also indicated that the oil and gas extraction sector was the most prominent sector in total foreign direct investment, as investment in it increased by 33.4% to reach 19.5 billion Omani riyals at the end of the fourth quarter of last year, compared to 14.6 billion riyals the previous year.

The value of foreign direct investment in the manufacturing sector amounted to more than 1.8 billion Omani riyals, while investment in financial intermediation amounted to 1.3 billion Omani riyals.

Investment in real estate, rental, and commercial project activities amounted to more than one billion Omani riyals, and in the electricity and water sector, investment amounted to more than 1 billion Omani riyals. Foreign direct investment amounted to 466.6 million Omani riyals, while transportation, storage and communications amounted to 362.9 million Omani riyals, foreign investment in trade amounted to 254.1 million Omani riyals, hotels and restaurants amounted to about 115.4 million Omani riyals, construction amounted to 82.1 million Omani riyals, and other sectors amounted to 82.5 million Omani riyals.

It is no secret that renewable energy projects were among the most prominent sectors that witnessed promising investments that contributed to strengthening the economy and sustainable energy adopted by the Sultanate of Oman, as the directions of the Sultanate of Oman called for diversifying energy sources, preserving the environment, and reducing harmful emissions, as the National Energy Strategy until 2040 It recommended that about 10% of the Sultanate’s electricity generation should come from renewable energy sources, primarily coastal wind and solar energy, by 2025.

The Sultanate of Oman has an abundance of solar and wind energy resources, through which it promotes the entry of international partnerships to build projects that constitute added value to the economy.

This makes it able to meet the demand for electricity at competitive prices, in addition to the Foreign Capital Investment Law that was introduced last year, which contributes to the creation of entities and investment opportunities, whether in the renewable energy sector or other sectors in the Sultanate of Oman, in addition to creating job opportunities for Omanis from Direct or indirect opportunities, as the law includes many investment incentives enjoyed by the foreign investor in the Sultanate of Oman.

The Sultanate of Oman had launched a number of projects to diversify energy sources, including projects to produce electrical energy, as it launched the Ibri solar power station in 2022 AD, and it was a partnership between the public and private sectors, and a contract between the Omani Power and Water Procurement Company with a Gulf investment group led by “Aqua Power”.

With the participation of the Gulf Investment Corporation and the Alternative Energy Projects Company to establish, own and operate this station, the station’s production capacity is 500 megawatts.

The Dhofar Wind Power Plant was also established and operated in partnership between the Rural Areas Electricity Company “Tanweer” and the Abu Dhabi Future Energy Company “Masdar”. This plant is the first wind power plant in the region with a production capacity of 50 megawatts, and work is currently underway to establish a planned solar energy station. It will be operational in 2025 with a capacity of 1,000 megawatts, and there are upcoming projects in renewable energy, including the Ibri 3 solar power station, in addition to wind energy projects in the Al Wusta and Dhofar governorates, and the Duqm wind energy project in 2027 with a capacity of more than 150 megawatts.

The Sultanate of Oman also aims to introduce new innovations in the electricity sector, as it launched the first spot market for electricity in the Middle East in 2022, which in turn helps reduce the cost of electricity and water, increases the efficiency of energy and water provision, and supports the energy transition. It also allows generation companies to sell uncontracted production to market at competitive prices, which enhances new revenue opportunities for these companies, and is a particular advantage for solar and wind energy projects.

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