Muscat: The recently published Oman Investment Authority (OIA) first annual report highlights seven joint ventures entered into by the authority with Arab and non-Arab countries, giving the nation an edge in promising markets.
Mulham Basheer Al Jarf, OIA Acting Deputy President for Investment said that these strategic projects help the Sultanate of Oman to further promote its relations with Arab and non-Arab countries, and get into strategic partnerships that serve the interests of all parties. He added that OIA has successfully entered into seven joint ventures since its inception and together made some good results in the form of promising additional investments, yields from timely exits, increased capital and directing some investments to new areas.
To strengthen the partnership between the Sultanate of Oman and the State of Qatar, Al Hosn Investment Company (HIC) was established in 2007, as a closed joint stock company with its head office in Muscat. With assets totalling OMR135 million, and capital up to OMR250 million, the company invested in the economic sectors in Oman, e.g. banking, industry, communications and technology, food, health care, and education. Currently, the company’s portfolio has 14 investment projects in different sectors.
Established in 2001 as a joint venture between OIA and the Government of Pakistan, Pak-Oman Investment Company (POIC) is a finance company with a capital totalling OMR40 million. The company achieved a net profit as a result of its diversification initiatives of instruments between fixed and floating interest rates.
In 2008, Oman Vietnam Investment Co. was established as a joint venture between OIA and the State Capital Investment Corporation (SCIC). It invests in businesses and projects aiming to achieve development and sustainable economic growth. The value of this joint venture is $200 million covering 12 investment portfolios.
From June 2020 to December 2021, the company invested $20 million in CMES Company specialised in developing rooftop solar power systems, and $30 million in VPI, a real estate development company. Moreover, the company fully exited from BCG Solar Farms with an IRR of 13%, where the value of investment increased by 3.1 times, and partially exited 70% from CII Company operating in infrastructure projects, with an IRR of 13%, where the value of investment increased by 4.2 times.
Moreover, the company reviewed and updated its investment plan to cope with the expected changes in the Vietnamese market, and to focus on the promising sectors; i.e. technology, education, health, logistics, retail and industrial zones.
Another joint venture is Oman Brunei Investment Company. Established in October 2009, OBIC’s investment strategy focuses on the optimisation of capital in companies with high growth potential through private equity and investing in new projects or joint ventures. OBIC seeks to achieve an IRR not less than 12-15 per cent through a diversified portfolio that includes service, industry, health, education and tourism sectors. OBIC was founded with an initial capital of $100 million, which was later increased to $200 million in 2019.
Currently, the company invests in assets worth $1 billion. It contributed to the development of several key projects in Oman, including the Kempinski Hotel Muscat, Oman International Hospital, which is managed by an international operator, a water desalination plant in Sohar in partnership with a specialized company from Spain, and a portfolio of aircraft rental in partnership with a German company. It is working on developing a private school in collaboration with a global specialised educational company. Additionally, it invests in projects in the Sultanate of Brunei, including a shrimp aquaculture project, and another salmon aquaculture project in the pipeline. It managed to profitably exit from previous investments such as Majan Telecommunication (Renna Mobile), Babylon Medical Services Company, and a stock portfolio specialized in the energy sector.
The Uzbek Oman Investment Co. (UOI) was established in 2010 as a joint venture between OIA and Uzbekistan (75% from Oman and 25% from Uzbekistan), with a capital of $200 million. UOI invests in textile, food and pharmaceutical products, retail, financial and technological services, real estate and foreign currencies. The company currently has 12 investment projects after it fully exited from a number of investments. During the fourth quarter of 2021, the company’s board of directors approved a proposal to restructure its investment portfolio to maintain the portfolio’s value and improve its returns by shifting from low-return assets to high-return assets.
The Oman India Joint Investment Fund (OIJIF ) was established in 2011 and invests in different economic sectors in India in two portfolios. The first portfolio is a 50/50 joint investment fund between OIA and the State Bank of India (SBI) and includes 7 investment projects. It exited completely from 13 investments and partially from one investment, with an IRR of 2.3 times the cost. The value of the second portfolio is $229 million, of which 63% is for OIA, while 22% is owned by the State Bank of India and another 15% is owned by other investors. Over 80% of the fund's capital is directed to investment projects.
Spain Oman Private Equity Fund is established in 2014 as a 50/50 joint investment between OIA and COFIDES, a company owned by the Spanish Government. The capital of this joint fund is EUR 200 million. Currently, it has 6 investment projects representing 43% of the fund’s total capital. In April 2021, it invested in Logalty, a company that specialised in the provision of electronic evidence service for e-contracting, communication, and personal identity.
After it successfully added 35 new investments to its investment portfolio in the private equity markets, exited some investments with good returns, and realized average returns of 10.3% since its inception, OIA is pursuing new opportunities through partnerships with brotherly and friendly countries. OIA’s first annual report, which has been issued recently, gives an overview of its business and investments since its establishment on 4 June 2020 under Royal Decree No. 61/2020 till December 31, 2021.