Oman plans to privatise two electricity companies next year to attract foreign investment and reduce subsidies, a senior official said on Monday, as the Arab oil producer seeks to boost state coffers that were depleted by a slump in oil prices.
The state aimed to sell stakes in Oman Electricity Transmission and Muscat Electricity Distribution, which have combined assets worth $3.2bn, said Mansoor al Hinai, a vice president at Oman’s state-owned Electricity Holding Co.
“It took us some time to move to this step… but we feel the sector is ready for privatisation. We are confidently selling these assets,” Hinai told Reuters in London.
“We’ll be looking for big players with a track record of actively owning such assets to come onboard in a consortium to deliver new technology to Oman such as electricity smart meters,” said Hinai, who is vice president for distribution and supply at the holding company, also known as Nama.
He declined to say how much the government expected to raise from the privatisations.
Lazard Ltd are acting as financial advisers on the sale which has drawn interest from European and Asian investors along with Australian and Canadian pension firms.
Oman has outlined plans in recent years to sell off state assets as it seeks to confront fiscal deficits built up after oil prices plunged below $30 barrel in 2016. Prices have since recovered and are now trading around $83.
The Arab country has more than 60 state-owned companies but smaller energy reserves and lower oil output than wealthy Gulf neighbours, so it faces a bigger strain on its state finances as it seeks to fund welfare programmes and create jobs.
Nama holds the Omani government’s stake in nine electricity firms and plans to sell 70 per cent stakes in three other power distribution companies by 2020, with the government retaining 30 per cent of the shares.
It might consider floating remaining stakes in initial public offerings (IPOs), said Hinai, declining to give a timeline.
In May, the state company approached banks to advise on a capital expenditure programme worth $1.2bn in the latest Omani foray in the international debt market.