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Nama Holding, the holding company for the state-owned electricity network companies in Oman, today signed the contract for the sale of a 49% stake in the country’s electricity transmission network operator, the Oman Electricity Transmission Company SAOC (OETC), to State Grid International Development Ltd (SGID), a subsidiary of the State Grid Corporation of China (SGCC).

In a first for the team, the firm acted as local counsel together with transaction advisers, London Economics and financial advisors, Lazard Frères. Herbert Smith Freehills acted as international legal counsel to Nama Holding, ESB International as technical consultant and EY as accounting and tax consultant.

In 2017, the Government of the Sultanate of Oman initiated the partial privatization program for the four electricity distribution and supply companies and the electricity transmission company, operating in Oman. These companies are wholly owned by Electricity Holding Company SAOC (Nama Holding), on behalf of the Government of the Sultanate Oman. The transactions consist of divesting up to 70% of the shares held in the distribution and supply companies and up to 49% of the shares held in the transmission company.

Through this privatization program, the Government of Oman intends to attract foreign direct investments into the country and promote 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 an improved customer satisfaction and a more efficient resource utilization. This will, in turn, translate into a more optimized economic cost per unit of electricity supplied over time.

In October 2018, the first phase of this privatization program was launched at a press conference held in London, by announcing the sale of up to 49% of the shares held in Oman Electricity Transmission Company SAOC (OETC) and up to 70% 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).

At the conclusion of the process, State Grid International Development Ltd. (SGID), incorporated in Hong Kong, was declared the winning bidder. SGID is the wholly-owned subsidiary of the State Grid Corporation of China (SGCC).

On December 15th, SGID and Nama Holding signed the agreements for the sale of 49% of the shares in OETC, during a ceremony held in Muscat, Oman. 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.

About OETC

Oman Electricity Transmission Company SAOG (OETC) has a vital role in the Oman Electricity Sector, as it owns and operates the main transmission network as well as transmission network in Dhofar through which electricity is transmitted from the generating stations to the distribution load centers in all governorates of the Sultanate. The main electricity transmission network operates at high voltage of 132 kV and above. OETC also has the responsibility of balancing generation and demand at all times of the day as part of its responsibilities for the economic dispatch of power in the Sultanate.

About Nama Holding

Nama Holding, formerly known as Electricity Holding Company, started its commercial operations on 16 September 2003. Nama Holding holds share in ten companies involved in the procurement, generation, transmission, supply and distribution of electricity and water related services. It holds 99.99% of the shares of the Government in eight subsidiary companies in the electricity sector and 98.10% of the shares of Dhofar Power Company. It also runs a training and competency development company called Nama Institute for Competency Development (NICD). The operations of all 10 subsidiaries are spread across Oman, covering the needs of the entire country.

About SGID

State Grid International Development Limited (SGID), a company incorporated in Hong Kong, 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. Successful investments for SGID include acquisitions in the Philippines, Portugal, Brazil, Australia, Hong Kong SAR, Italy and Greece.