OPEC Fund pledges support for Oman’s infra development
Conrad Prabhu
Business Correspondent - Oman Daily Observer; Magazine Editor - ENERGY OMAN
OMAN DAILY OBSERVER / 25 OCT 2024
CONRAD PRABHU
MUSCATG: The Sultanate of Oman has signed a loan agreement with the OPEC Fund for International Development covering financing to the tune of $392 million to support the construction of the Khasab-Diba-Lima road project in Musandam Governorate.
The agreement was inked by Sultan bin Salem al Habsi, Oman’s Minister of Finance, with Dr Abdulhamid al Khalifa, President – The OPEC Fund, on the sidelines of the 2024 World Bank / IMF Annual Meetings underway in Washington DC.
The signing follows last month’s formal decision by the Vienna-based private banking institution approving a loan facility of up to $392 million for the landmark road project in Oman. Describing the 72km project as a strategic investment by Oman, the Fund noted that the blacktop will “reduce travel times, improve traffic safety, and boost traffic”. It also said the loan will be disbursed in two tranches – an initial $180 million and another $212 million.
In a statement, the OPEC Fund described the loan facility as a symbol of deepening collaboration with the Sultanate of Oman. “We are pleased to deepen our cooperation with the Sultanate of Oman with these agreements, which align with our shared goals of promoting sustainable development and enhancing regional connectivity. The Khasab-Diba-Lima Road Project is a vital investment in the future of the country, while creating the opportunity to support the private sector will boost our activities for the benefit of the local economy,” said Dr Al Khalifa.
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According to the Fund, around 94 per cent of the total project cost of $416.46 million will be covered by its loan facility. Besides enhancing regional connectivity, the road link will also enable safer and faster market access, while boosting the local economy as well.
Last December, Oman’s Ministry of Transport, Communications and Information Technology (MTCIT) signed an agreement with well-known Omani contractor Al Sarooj Construction for the design and implementation of the Khasab-Diba-Lima road link at a cost of around $390 million. Featuring as many as 11 bridges, it will traverse rugged mountainous stretches in the governorate.
Separately, a framework agreement on Private Sector Operations was also signed by Oman with the OPEC Fund.
Significantly, the latest loan facility marks only the second time that Oman has benefited from financing support from the OPEC Fund. Oman, while not a member of OPEC, continues to be part of the OPEC-Plus Alliance that is collaboratively working to shore up global oil prices.
In July 2019, the Fund extended $130 million in loan finance to fund the construction of the Al Sharqiyah Expressway Tunnels Project – a first in Oman at the time. Since brought into operation, the two ‘twin-tube’ tunnels have improved connectivity between the north and eastern governorates of the country, enabling the safe and efficient flow of people and goods.