State Grid Corporation of China Takes 49% Stake in Omani Power Transmission Company
On March 11, 2020, the state-owned State Grid Corporation of China (SGCC) completed the $1 billion purchase of a 49% stake in Oman Electricity Transmission Company (OETC) from the country’s state-owned Nama Group. Per the terms of the acquisition, SGCC will act as a technical partner to OETC, which has a 95% market share in Oman’s power sector (as of 2017).
Notably, the OETC acquisition is the latest in a pattern of activity by SGCC targeting foreign electricity transmission networks with high-profile acquisitions. These deals have faced regulatory scrutiny in other markets, including opposition due to national security concerns associated with integrating Chinese state-owned actors into domestic critical infrastructure. SGCC has managed reached similar deals taking a stake in power grids in the Philippines, Portugal, Australia, Brazil, Italy, and Greece.
State Grid has been part of a Chinese-led strategic effort to build a Global Energy Interconnection (GEI), a vision for the development of transnational and transcontinental energy networks that are in part based on State Grid’s experience with ultrahigh voltage (UHV) technology.
The OETC deal was initiated in December 2019 and has been touted as one of the largest privatization efforts to date (and China’s largest investment) in the Omani Sultanate. Oman is planning multiple other privatization deals amid an effort to address rising levels of public debt. Chinese firms may also be interested in pursuing other of Oman’s divestment efforts, which are largely aimed toward the country’s energy and power sector.