China’s State Grid acquires 49pc stake in Oman Electricity Transmission Co

Preparatory meeting for 40th GCC Summit held
December 10, 2019
NCAT gets approval for mechanical engineering course
December 22, 2019

MUSCAT, DEC 15 – Oman’s Nama Holding, the holding company of state-owned electricity network companies, signed on Sunday agreements pertaining to the sale of 49 per cent shares of Oman Electricity Transmission Company (OETC) to the State Grid International Development Ltd. (SGID), a wholly-owned subsidiary of the State Grid Corporation of China (SGCC). The signing took place under the auspices of Darwish bin Ismaeel al Balushi, Minister Responsible for Financial Affairs, and was attended by a number of high-level government dignitaries from Oman and China, as well as Nama Group officials, and executives representing the companies advising the two sides. The ceremony took place at the Al Bustan Palace — A Ritz Carlton Hotel.

The OETC transaction is conditional only upon the approval of the Authority for Electricity Regulation, and (subject to satisfaction of this condition) completion is expected to occur in early 2020. Saud bin Nasser bin Rashid al Shukaili, Chairman of the Privatisation Supervisory Committee, stated: “Nama Holding is committed to implementing the Privatisation Programme of Oman’s Electricity Sector according to the set timeframe. We are delighted to announce the completion of the privatisation of OETC today with State Grid International Development Limited (SGID), one of the largest operators of electricity transmission networks in the world with a total asset of US $41.2 billion; with international operations covering Philippines, Portugal, Brazil, Australia, Hong Kong, Italy and Greece.”

The deal marks the culmination of a lengthy privatisation exercise that began in 2017 when, based on the Government of the Sultanate of Oman directives, Nama Holding (Electricity Holding Company SAOC) initiated the partial privatisation programme for the four electricity distribution & supply companies and the electricity transmission company, operating in Oman. These companies are wholly owned by Nama Holding on behalf of the Government of the Sultanate Oman. The transactions consist of divesting up to 70 per cent of the shares held in the distribution and supply companies and up to 49 per cent of the shares held in the transmission company.

Through this privatisation programme, Nama Holding will support the government’s objectives of attracting foreign direct investments into the country and promoting private sector participation as part of the wider nation-building process. The objective is also to harness best-in-class technologies and technical & administrative expertise in these companies, which will result in human resource development, improved customer satisfaction and a more efficient resource utilisation. This will, in turn, translate into a more optimised economic cost per unit of electricity supplied over time.

In October 2018, the first phase of this privatization programme was launched at a press conference held in London, by announcing the sale of up to 49 per cent of the shares held in Oman Electricity Transmission Company SAOC (OETC) and up to 70 per cent of the shares held in the Distribution & Supply Companies. Eligible international entities were invited to participate in the process and submit Expressions of Interests (EoI). For OETC, Nama Holding received 11 EOIs from 16 international investors, either individually or in consortia. At the conclusion of the process for OETC, State Grid International Development Ltd. (SGID), incorporated in Hong Kong, was declared the winning bidder.

State Grid International Development Limited (SGID) is a wholly-owned subsidiary and the sole platform responsible for overseas investments and operations of State Grid Corporation of China (SGCC). SGID actively pursues global investment opportunities and has a proven track record of benefiting its investee businesses by leveraging SGCC’s strengths in grid operation, R&D capabilities, technology know-how and financial support. The parent company, State Grid Corporation of China (SGCC), is the dominant transmission and distribution operator in China and carries the mission to provide safer, cleaner, and more economical and sustainable power supply in order to facilitate ongoing economic development.

SGCC’s core businesses are the investment, construction and operation of electricity transmission and distribution grids, as well as the dispatch and provision of electricity supply services within China. Established in 2002, SGCC owns, operates and manages the largest and the most complex ultra-high voltage (UHV) transmission network in the world. SGCC’s operations cover 88 per cent of the geographical area of China and serving a total customer base of over 1.1 billion population. As the largest utility company in the world, SGCC is ranked 5th on Fortune Global 500 in 2019.

Leave a Reply

Your email address will not be published. Required fields are marked *