Omani JVs with friendly states catalyse investment: SGRF

A string of joint ventures set up by Oman’s State General Reserve Fund (SGRF) with a number of friendly countries, continues to catalyse investment and development, as well as generate healthy fiscal returns for the bilateral partners.

Over the past decade, the SGRF – the biggest sovereign wealth fund of the Sultanate of Oman – established joint ventures with the governments and public sector entities of Vietnam, India, Uzbekistan, Brunei Darussalam and Spain. These bilateral investment vehicles have served as important stepping stones to venture into new markets, according to the Muscat-headquartered wealth fund.

“The joint ventures that have been established with some friendly countries so far were the result of Oman’s diplomatic efforts and distinguished relations with the other countries in the world. These JVs are mostly concentrated in the Asian markets, which constitute a strong start to enter into these promising markets,” it noted in its newly published Annual Report for 2018.

The oldest of these JVs — the Vietnam Oman Investment Company (VOI) — has seen investments burgeon to a total of $191 million over the decade since it was established in 2008 as a partnership between the SGRF and the State Capital Investment Corporation of Vietnam. VOI invests in education, health, energy and desalination, among other sectors.

The latest of VOI’s 15 investments is a Swedish coffee brand, named Wayne’s Coffee, which opened its first outlet in Ho Chi Minh City last year. The JV has also pledged to invest in Kim Tin Group, specialists in welding services and tools manufacturing with a share of more than 50 per cent of the local market backed by a distribution network of more than 5,500 welding workshops and welding tools wholesalers. VOI is also investing in the Bamboo Capital Group, which is developing a solar power plant with a capacity of 141 MW in the city of Long Anh.

Uzbek Oman Investment Co (UOI), a JV between the SGRF and Uzbek Reconstruction and Development Fund, has okayed investments totalling $84 million in a pair of shopping centres in Rivira and Compass in Uzbekistan.

Oman Brunei Investment Company (OBIC), a partnership established in 2009 between the SGRF and Brunei Investment Corporation, has already begun investing in Oman. OBIC has a 25 per cent stake in the Kempinski Hotel, which opened in March 2018.

Significant headway has also been made by the Oman-India Joint Investment Fund (OIJIF), a partnership between the SGRF and the State Bank of India (SBI). Established in 2011, OIJIF invests in various economic sectors in India. Last year, the JV managed to mobilise 75 per cent of the target capital of the OIJIF II towards three key investments: (i) Divgi Torq Transfer Systems, one of the leading motor vehicle engine manufacturers in India, (ii) Annapurna Finance, a leading provider of microfinance in rural areas, and (iii) Stanley Lifestyles, a leading furniture company in India. Total investments in the three ventures under OIJIF II amount to $61 million.

SGRF is also a 50 per cent partner in the Spain Oman Private Equity Fund, which was set up in 2014 with a capital of around Euro 200 million in partnership with COFIDES, a Spanish combined private-public concern, which provides financial support to Spanish enterprises abroad.