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Overview

SGID participates in OMR 100 million short-term, shareholder bridge loan to Oman Electricity Transmission Company SAOC (OETC) for general corporate purposes

Commitments (Constant USD, 2023)$129,628,096
Commitment Year•2020Country of Activity•OmanDirect Recipient Country of Incorporation•OmanSector•EnergyFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jul 1, 2020
Last repayment (originally scheduled)
Dec 30, 2020

Geospatial footprint

Map overview

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Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownershipAt least 25% Chinese ownership

Funding agencies

State-owned companies

  • State Grid International Development Co., Ltd. (SGID)

Cofinancing agencies

State-owned companies

  • Nama Holding

Receiving agencies

State-owned companies

  • Oman Electricity Transmission Company SAOC (OETC)

Loan desecription

SGID contributes to OMR 100 million short-term, shareholder bridge loan to Oman Electricity Transmission Company SAOC (OETC) for general corporate purposes

Interest rate (t₀)•5%Interest type•Fixed Interest RateMaturity•0.5 years

Narrative

Full Description

Project narrative

Under a Ministerial Decision (No. 1377/2017) issued on December 19, 2017, the Government of Oman mandated the partial privatization of some utility companies. Oman Electricity Transmission Company SAOC (OETC) was one of the firms in the sector earmarked as an eligible company for partial privatization by the Government of Oman. The process and all related formalities took place in 2019 in the search for a suitable strategic partner to invest in the company for acquiring a 49% equity stake, with the Government of Oman retaining a 51% equity stake. State Grid Corporation of SGCC -- through State Grid International Development (SGID) -- ultimately acquired a 49% equity stake in OETC for a cash consideration of approximately $1 billion. The acquisition (privatization) was completed on March 12, 2020. Then, in July 2020, SGID and Electricity Holding Company SAOC (Nama Holding) issued a shareholder bridge loan worth 100 million Omani rials (OMR) for general corporate purposes. SGID contributed OMR 49 million, and Nama Holding contributed OMR 51 million (in proportion to their shareholdings in OETC). The loan carried a 6-month maturity (final maturity: January 2021) and a 5% interest rate. The loan was issued at a time when OETC's liquidity markedly deteriorated (due to the company's failure to refinance its debts and delayed government subsidies to the electricity sector). The borrower ultimately repaid the loan in February 2021.

Staff comments

1. Oman Electricity Transmission Company SAOC is a closed Omani joint stock company registered under the Commercial Companies Law of Oman. 2. In 2020, 49% shares of Oman Electricity Transmission Company SAOC have been sold by Holding Company to State Grid International Development Ltd (SGID). SGID is a wholly owned subsidiary of the State Grid Corporation of China (SGCC), which is ultimately owned by China's central state-owned Assets Supervision and Administration Commission (SASAC). Oman Electricity Transmission Company SAOC is a 50.99% subsidiary of NAMA Holding Company SAOC a company registered in the Sultanate of Oman, The ultimate parent of NAMA Holding Company SAOC the Government of Sultanate of Oman, as it holds 100% shareholding in NAMA Holding Company SAOC through the Oman Investment Authority (OIA) which was formed during the period pursuant to the Royal Decree 61/2020 under which all the shareholdings of the entities owned by Ministry of Finance (MoF) have been transferred to OIA. Before the formation of OIA, 100% shares of the Oman Electricity Transmission Company SAOC were held by Oman's Ministry of Finance. 3. The Omani rial (OMR) is the currency of Oman. 4. There are sources that suggest the loan was potentially refinanced in January 2021.