OIA officially launches Oman Future Fund

Oman Wednesday 17/January/2024 15:51 PM
By: Times News Service
OIA officially launches Oman Future Fund

Muscat: Oman Investment Authority (OIA), officially launched the Oman Future Fund with a capital of OMR 2 billion on Wednesday, January 17, 2024.

The Oman Investment Authority officially launched the Oman Future Fund today with a capital of OMR 2 billion , divided over five years at a rate of OMR 400 million annually, and distributed 90 percent for new or existing direct investment projects that are commercially and economically viable and meet the results of the feasibility study, and 10 percent for small and medium enterprises and emerging companies.

 The Fund provides its services to private sector institutions, business owners, small and medium-sized companies, in addition to foreign investors, and includes eight targeted sectors which are tourism, industry and production, green energy, information and communications technology, ports and logistics services, mining, fisheries, and agriculture.

 His Excellency Abdul Salam bin Mohammed Al Morshedi, Chairman of the Oman Investment Authority, said that the establishment of the Oman Future Fund aims to advance the targeted economic sectors. The Fund is considered a major potential for stimulating the growth of the national economy, and a reliable partner for local and international investors wishing to expand the scope of their projects in the Omani economy or enter the Omani market.

His Excellency added that the Oman Future Fund will contribute to integration with the private sector, support small and medium enterprises, in addition to stimulating the venture investment system in the Sultanate of Oman. Explaining that the fund will serve as a third portfolio for the agency, in addition to the two current investment portfolios (National Development) and (Generations).

 The chairman of the Oman Investment Authority indicated that the Authority will use its investment experience to manage the fund, which confirms the Omani competencies it possesses and has proven its ability to achieve successes in managing, investing and developing funds and achieving good returns from them.

His Excellency the Chairman of the Oman Investment Authority added in a statement to reporters that the Oman Future Fund will support all initiatives that aim to establish projects in the Sultanate of Oman, whether these projects are carried out by government companies, companies from the private sector, or by foreign private sector initiatives.

His Excellency noted that the Fund will have the ability and flexibility to take several forms of financing, including contributing as a partner in the capital, and also being a lender to these projects, noting that there are currently no funds or portfolios that can finance more than OMR 5 million . While the Oman Future Fund will be able to finance projects up to OMR 100 million for each project separately, with a maximum of 40 percent of the capital in the partnership, as the private sector will be the one leading these projects.

His Excellency the Chairman of the Oman Investment Authority stressed the need for the projects to be financed by the Oman Future Fund to have economic feasibility studies from neutral parties, and progress will be via a digital platform, which will save effort and time for project owners.

His Excellency pointed out that the foreign investor is always looking for several incentives, including the presence of local financing bodies, adding that priority in financing will be given to the projects that are most feasible and most valuable to the Sultanate of Oman in terms of providing jobs, using Omani raw materials, contributing to the Omani economy, the size of the local product. Therefore the best projects are the ones that win financing, not necessarily the projects owned by the Omani Investment Authority.

Her Excellency Halima bint Rashid Al Zaria, Chairwoman of the Small and Medium Enterprises Development Authority, explained that allocating 10 percent of the Oman Future Fund to small and medium enterprises will enhance access to non-traditional financing for emerging companies based on innovation and technology, as well as small and medium enterprises.

The fund will be subject to the governance in force in the Authority , which includes the best international practices and ensures efficiency and flexibility in order to achieve the financial and economic objectives desired by establishing the fund, to complement the system of financing and investment coverage currently provided by the government through a number of institutions such as the Oman Development Bank, the Small and Medium Enterprises Portfolio, the Rakaza Fund, and the Oman Technology Fund, with flexibility in determining the type of contributions to the selected investments, whether through direct financing at market cost, or through capital partnership with the private sector, so that funding is distributed among these sectors in a balanced manner and not focused on a specific sector.