Advisor sought for IPO of Oman’s grid operator

MUSCAT, APRIL 23

Nama Group, the holding company of state-owned power and water utilities operating in the Sultanate of Oman, is assembling a team of experts to provide advisory services linked to the long-anticipated public listing of majority-owned Oman Electricity Transmission Company (OETC), the operator of the national grid.

On Tuesday, Nama Group – part of integrated wealth fund Oman Investment Authority (OIA) – invited suitably qualified legal companies to bid for its contract to provide Transaction Legal Advisory services for the planned Initial Public Offering (IPO) of OETC and its eventual listing on the Muscat Stock Exchange (MSX). The deadline for submission of proposals is May 2, 2024.

OETC is among a number of subsidiaries of OIA that are tipped for partial privatization in line with the wealth fund’s strategy to divest some of its assets with the goal of raising funds, as well as encouraging the private sector to participate in the local economy.

The move to list OETC via an IPO comes four years after parent group Nama Holding successfully sold 49% of the transmission company’s stake to the State Grid Corporation of China (SGCC), a Chinese state-owned grid utility, which is also the largest utility company in the world. The deal earned the Omani government close to $1 billion. OIA, represented by Nama Group, has since retained 51% of OETC’s equity.

Seeking to raise the standards of the national grid to world-class levels, OETC has earmarked sizable amounts, aggregating in excess of $1 billion, towards the modernization of its networks. The lion’s share is being spent towards the interconnection of the standalone North and Southern grids into one integrated national grid. The initiative, known as ‘Rabt’, has now entered its second phase, with contractors focusing on building grid stations and overhead lines effectively extending the network from Duqm all the way to Salalah in the south.

Significantly, the total value of OETC assets soared 16.75% to RO 1.77 billion at the end of 2023, compared to RO 1.516 billion in 2022. Revenues from the Transmission Use of System (TUoS) and Connection Charges (CC) climbed 12.31% to RO 160.97 million in 2023, up from RO 143.33 million in 2022. The operating profit increased 12.4% to RO 87.28 million in 2023 compared to RO 77.673 million a year ago. However, net profit after tax dipped 1.94% to RO 41.7 million in 2023, compared to RO 43.64 million in the previous year.