Oman power entities garner global investor interest
23 strategic and financial investors submit Eois in response to Nama Group’s invitation to privatise OETC and MEDC
Marking a key milestone in its privatisation drive, the Omani government-owned Nama Holding has announced that it has received as many as 25 Expressions of Interest (Eois) from international investors for a pair of flagship power subsidiaries — Oman Electricity Transmission Company (OETC) and Muscat Electricity Distribution Company (MEDC).
Both OETC and MEDC are among a total of five subsidiaries lined up for partial privatisation as part of the government’s strategy to attract strategic investors to help support the ongoing expansion and modernisation of the Sultanate’s critical power infrastructure. The remaining three Distribution & Supply entities — Majan Electricity Company, Mazoon Electricity Company and Dhofar Power Company — are also being prepped for privatisation as part of a phased process targeted for completion by mid-2020.
Giving an update on the keenly-anticipated privatisation process at a press conference held here on Monday, top Nama Group officials said the provisional offers were received during an EOI Phase that began on October 8, 2018.
During this phase, Nama Group sounded out a total of 90 prospective investors (47 financial investors and 43 strategic investors) from around the world, notably from Europe, USA, Canada, China, India, Japan and Australia, among other countries.
The exercise generated 25 tentative offers from 23 strategic and financial investors. Nama Group CEO Eng Omar al Wahaibi said the high number of offers underscored the strength of investment interest in Oman’s electricity sector. Among the bidders, he said, are reputable utilities that own and operate transmission and distribution networks in their respective countries.
According to Mansoor Talib al Hinai, VP Distribution and Supply at Nama Group, OETC attracted 11 bids while MEDC drew 14 offers. The interested parties will be invited to submit non-binding offers over the next 8-10 weeks before binding offers are sought in the next phase of the process. The entire exercise is expected to be finalised before the end of this year, he noted.
Under Nama Group’s revised privatisation strategy, up to 49 per cent of the equity of OETC — which owns and operates the country’s two main grids — will be offered to a strategic investor. However, in the case of the four Distribution & Supply entities lined up for privatisation, up to 70 per cent of the equity is being offered for investment, effectively granting administrative and operational control to the strategic investor.