One of China's state-owned grid operators is acquiring a 49 percent stake in Oman Electricity Holding Co. The State Grid Corp of China announced on Monday that it has signed an agreement with Oman's Nama Holding, the holding company of Oman Electricity Holding Co, to acquire the substantial stake.
The Chinese grid operator mentioned in a statement that the purchase of the stake in the Omani utility company is a landmark deal for China. The deal marks a step forward for both China and Oman as they strengthen their development collaboration under the country's Belt and Road Initiative (BRI).
State Grid Corp of China president, Xin Baoan, stated that the deal should deepen the strategic ties between both countries as they continue to expand their bilateral economic exchanges. Xin added that China is a long-term investor in the global power industry and the company plans to work with its Omani partners to help secure the country's power supply to support its economic prosperity and development.
According to China's ambassador to Oman, Li Lingbing, the State Grid's investment is the largest-ever single investment deal by a Chinese company in Oman. The exact amount paid by the State Grid for the 49 percent stake and other financial details were unfortunately not disclosed.
Oman continues to be one of the leading partners in China's ambitious Belt and Road Initiative. Projects launched under the initiative have so far made considerable progress. To date, Chinese companies have launched projects in Oman with a cumulative turnover of more than $6 billion. The projects cover different sectors, including oil and gas exploration, electricity, processing, and communications.
Analysts have mentioned that the State Grid's plan to leverage its strong management capabilities and decades-long experience should allow it to tap into opportunities oversea, especially with its partners in BRI-related economies. The move to go global is apparently a practical measure for the company as it does have the ability to turn losing projects into money generators.
The State Grid has proven itself time and time again that it is capable of undertaking massive BRI projects and making them profitable. The company has managed to achieve this through the use of modern and efficient management systems and lower construction costs.
The state-owned firm currently supplies power to over 1.1 billion people in China, with its networks spread across 26 Chinese provinces and municipalities. The company has also managed to complete successful backbone energy networks overseas, including projects in countries such as Brazil, Portugal, the Philippines, Italy, and Australia.
