Oman energy push needs broader funding

MUSCAT: Oman’s expanding renewable energy and electricity infrastructure plans will require broader funding sources and stronger project structures to attract investment, a senior Sohar International executive said, urging banks to support the supply chains behind major developments.
Hisham Mousa, Senior Executive Vice President and Head of Government Banking and Strategic Alliance at Sohar International, said developers should combine domestic lending with international capital, equity and debt market instruments to meet financing needs across generation, transmission and distribution.
“It’s not only about how you can get the money, it’s about how you can get the right capital for these projects,” Mousa said in a presentation on financing energy infrastructure.
He pointed to solar, wind and battery storage as areas requiring substantial investment as Oman pursues its energy transition under Vision 2040. Securing funding, however, would depend on putting credible commercial and technical arrangements in place before approaching lenders.
Clear power purchase agreements, agreed tariffs, strong sponsors, permits and experienced technical partners were central to making projects bankable, he said. These elements would underpin business plans and help financiers assess repayment prospects and allocate risk.
Mousa said funding options included long-term bank loans, bonds, sukuk and financing from development institutions, alongside shareholders’ equity. The appropriate combination would depend on the project’s structure and the risks assumed by its participants.
He urged developers to look beyond borrowing solely from banks in Oman, highlighting the role of international expertise and financing partnerships in bringing complex energy investments to market.
Banks, in turn, should take a broader role than simply providing loans, helping originate transactions, structure financing, arrange syndication and develop ways to reduce investment risks, he said.
Such an approach would allow lenders to work more closely with investors and project sponsors, while distributing financing commitments across participating institutions.
Mousa also called for financing to cover the wider project ecosystem, including international contractors, subcontractors and smaller businesses supplying equipment and services. Supporting these companies would help extend access to funding throughout the value chain.
He cited the development of a solar manufacturing ecosystem in Sohar, beginning with polysilicon production and extending into subsequent manufacturing stages, as an example of how technical expertise, investors and financial institutions could support linked industrial activities.
The investment case also extended beyond individual power plants, he said, with electricity networks and storage forming part of the infrastructure needed to support additional renewable generation.
Mousa said Sohar International had participated in financing GCC electricity interconnection infrastructure, highlighting regional grid links as another area requiring sustained capital investment.
He stressed that new capacity should be delivered in line with demand, as population growth, industrial development and new factories increase electricity requirements.
Oman’s wind resources and coastal location provided opportunities for further projects, he said, while storage investment could help manage available power more effectively.
For developers and financiers, the priority was to align project preparation, commercial agreements and funding so that investments could proceed when needed, he said. That required coordination among government entities, offtakers, technical partners, sponsors and lenders throughout the development process.