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Oman Infrastructure Fund commits to ESG principles

Sustainable investing: The principles of ESG are now applied at Rakiza Fund whenever any infrastructure projects are being screened for investment: COO
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Oman Infrastructure Fund (Rakiza), which is affiliated to the Oman Investment Authority (OIA), says its investment decisions are strongly guided by the candidate project’s commitment to ESG (Environmental, Social and Governance) principles.

According to Rehab al Lawati (pictured), Chief Operating Officer, Rakiza Fund’s investment in any infrastructure project – whether located within the Sultanate of Oman or overseas - is conditional on the latter’s adherence to sustainability and ESG.

Speaking at a conference on sustainability held in the city recently, the official said Rakiza Fund’s embrace of ESG was driven by the realisation that many reputable international investors have made ESG-based investment the cornerstone of their business philosophy.

“Post-Covid, we were looking at ESG as ‘nice to have’; but then when we started engaging with international investors investing in the Fund, they (signalled to us) they are not coming in if we don’t have an ESG policy,” Rehab explained.

“We had to shift quickly from ‘nice to have’ to ‘must-have’ within no time. We had three months to understand the policy and start to implement in the Fund, which we did. We went through the entire process of understanding what exactly we are focusing on, given that we are in infrastructure, and we needed to localise the ESG concept to Oman as well. Eventually, we managed to have a policy and to implement it.”

Top officials from the Central Bank of Oman and Capital Market Authority were among the panellists sharing their perspectives on the theme, ‘Funding the Future: Exploring Sustainable Finance and ESG Investing’.

Significantly, the principles of ESG are now applied at Rakiza Fund whenever any infrastructure projects are being screened for investment, according to the Chief Operating Officer.

“We take into account the environmental aspects, the social impact (and on the) community and staff of the company, and how we govern the company. So we take stakes in a company and we start building a matrix for (the application of) ESG. The difference between responsible impact and ESG is that you integrate ESG with the objective to get financial returns out of ESG.”

Rakiza Fund, set up in 2019, is co-managed by Oman Infrastructure Investment Management (OIM), a specialist infrastructure manager wholly owned by Oman Investment Authority (OIA), and Equitix, a leading investor, developer and fund manager of core infrastructure assets in key international markets. London-based Equitix currently manages over $10 billion worth of assets on behalf of long-term investors.

Earlier this year, Rakiza signed agreements to acquire a stake of over 31 per cent in Oman International Container Terminal (presently known as Hutchison Ports Sohar) at Sohar Port. Hutchison Ports Sohar – a joint venture of leading global port operator Hutchison Ports Holdings (HPH), the Omani government, and a number of prominent Omani and international investors – operates the container terminal at Sohar Port on a long-term concession.

The stake acquisition represents one of Rakiza’s first major investments in the Sultanate of Oman’s strategic infrastructure sector. Target segments for investments also include greenfield and brownfield opportunities including renewable energy, power and water, social infrastructure, telecommunications, oil and gas, transport and logistics, and environmental projects – both within and outside the Sultanate of Oman.

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