Privatisation of state-owned power subsidiaries progressing

Nama Group — the holding company of state-owned electricity generation, procurement, transmission, distribution and supply subsidiaries — says it is commencing the “market-sounding” phase of a multi-stage process aimed at achieving the privatising of its transmission, distribution and supply assets.
Eng Omar Khalfan al Wahaibi (pictured), Chief Executive Officer, said the keenly anticipated privatisation process is well under way with a consortium of advisers having already completed the Phase 1 of the programme.
Addressing local media at the Annual Press Conference of the Group, Al Wahaibi said Phase 2 of the exercise — designed to gauge the depth of market interest internationally — commenced yesterday.
Of the 11 entities that together make up Nama Group, five of them — Muscat Electricity Distribution Company SAOC, Majan Electricity Company SAOC, Mazoon Electricity Company SAOC, Dhofar Power Company SAOC and Oman Electricity Transmission Company SAOC (OETC) — have been identified as potential candidates for privatisation.
Earlier this year, the government appointed a consortium of advisers, jointly led by London Economics Ltd of the United Kingdom and Lazard Freres SAS based in France, to provide transaction advisory services linked to the privatisation programme. London Economics is overseeing the programme from the economic advisory angle, while Lazard will manage the financial transactions involved. The consortium also has five other advisory firms providing services in other areas.
In his presentation, and in a Q&A session that followed, Al Wahaibi also disclosed that Nama Group plans to raise $2 billion in new funds to meet the financing requirements of its subsidiaries for the 2019-2020 timeframe. This requirement, representing Tranche 3 of its fundraising programme dubbed ‘Lamar Project’, comes on top of an estimated $4 billion (RO 1.6 billion) in funds that were successfully raised over the past three years.
“Diversification of sources, optimization of rates and hedging of interest rates have helped the Group achieve its target financial cost metrics efficiently in comparison with the allowed price control returns. The fundraising programme will further support Nama Group’s capital expenditure for the distribution and transmission networks, and to refinance the existing short term borrowings,” said the Group in a statement.