MUSCAT: The Development Bank has announced its decision to offer interest-free financing for 510 school buses as part of the School Bus Replacement Initiative, which aims to finance a total of 1,000 school buses in its initial phase.
This initiative is being executed in collaboration with the Ministry of Education (MoE) and Karwa Motors, a joint Omani-Qatari investment, with a total financing commitment of OMR11.475 million since the project's inception in 2024.
This initiative is in line with the bank’s commitment to fostering self-employment and supporting small and medium-sized enterprises (SMEs) in accordance with Oman Vision 2040, which seeks to enhance economic activities and generate job opportunities for Omani youth through various financing programs.
Yousuf bin Mohammed Al-Owueini, Director of SME Financing at the Development Bank, highlighted the bank's essential role in financing SMEs as part of its developmental mission to invigorate key economic activities outlined in Oman Vision 2040 and the Tenth Five-Year Plan. He underscored that providing interest-free financing for school buses is a priority for the bank, as it plays a vital role in enabling various segments of society to pursue self-employment and motivating Omani youth to engage in entrepreneurship.
He further noted that since the project's launch in March 2024, there has been considerable demand, with beneficiaries obtaining interest-free financing of up to OMR22,500 per school bus.
Al-Owueini elaborated that the Development Bank plays a crucial role in this initiative by providing essential financing to school bus owners, with candidates selected by the Ministry of Education.
The bank follows its internal regulations to approve financing procedures, issues purchase orders to Karwa Motors for the production of the buses, and oversees their delivery to the designated beneficiaries.
He emphasized that this financing is interest-free and spans a duration of nine years, catering to the financial requirements of school bus owners. Furthermore, the project bolsters local value by promoting domestic industries and enhancing investment prospects for small and medium-sized enterprises (SMEs), thus fortifying the national economy.
Al-Owueini noted that the initiative aims to achieve several goals, including invigorating the national economy in alignment with Oman Vision 2040, which seeks to boost local content and diminish dependence on imports.
This is accomplished by fostering local bus manufacturing and supporting economic activities. He mentioned that the Development Bank provides adaptable financing options to ease the transition to new buses, ensuring stakeholders can fulfill their objectives.
In parallel, Eng. Issa bin Saleh bin Sufyan Al-Rashidi, the Director of the School Transport Department at the Ministry of Education, remarked that the project is on track to meet its goals within less than a year of its inception.
He highlighted that the partnership among the Ministry, the Development Bank, and Karwa Motors is dedicated to enhancing the efficiency of school transportation while upholding the highest safety standards for students.
He underscored the importance of replacing outdated school buses with modern vehicles to ensure safe and secure transportation.
The new buses come equipped with state-of-the-art monitoring and tracking systems, enhancing safety, comfort, and intelligence in transporting students between their homes and schools. Furthermore, drivers will undergo defensive driving training to improve their road safety competencies.
Al-Rashidi also indicated that the Ministry, along with its partners, plans to replace 5,000 old school buses over the next five years, focusing first on the oldest vehicles. This strategy aims to mitigate the risks associated with aging buses.
He pointed out that the project will offer additional advantages, including extending the operational lifespan of school transportation, guaranteeing a minimum ten-year warranty on maintenance and spare parts, and ensuring that service efficiency meets the highest standards. He emphasized that this initiative aligns with the sustainable development goals outlined in Oman Vision 2040 by enhancing the quality of education and school transportation services. Moreover, the project promotes the use of environmentally friendly buses, which will help reduce the carbon footprint and improve operational efficiency.
Al-Rashidi also mentioned that the initiative will create more job opportunities in bus maintenance, training, and driving, as the renewal of the school bus fleet will open new business avenues for local SMEs in the transport and logistics sector.
Eng. Sami Al Badi, Sales and Marketing Assistant Manager at Karwa Motors, remarked that the school bus project marks a significant achievement in fostering local industries, enhancing their capabilities, and delivering products that fulfill the needs of school transportation. He noted that the Development Bank’s backing for this initiative plays a crucial role in bolstering in-country value.
Karwa Motors has affirmed its dedication to providing the necessary number of buses in collaboration with contractors and the Ministry of Education. The company will also guarantee competitive pricing for maintenance and spare parts throughout the warranty period, which will extend for a minimum of ten years. Furthermore, it will offer training for school bus drivers in defensive driving at traffic safety institutes associated with the Royal Oman Police or the Oman Energy Association (OPAL) within their respective governorates, ensuring the safety of students during transit. The new buses will be outfitted with automated systems that meet the standards set by the Ministry of Education.
Al Badi remarked that Karwa Motors' participation in the project enables the company to innovate in bus manufacturing technologies, thereby enhancing its standing in both local and regional markets. He stressed that bolstering local bus production can help reduce dependence on imports and contribute to Oman’s economic growth.
Several recipients of the interest-free loans for school buses expressed their appreciation for the initiative, which has eased the financial burden associated with acquiring new buses. They noted that the financing arrangements have facilitated the purchase of buses without imposing significant financial stress, as repayments are aligned with the school academic year, with instalments spread over ten months each year.
Additionally, they observed that the project has led to lower maintenance costs and reduced vehicle downtime, as well as decreased repair expenses. The modern features and advanced technologies of the new school buses have also improved safety and driving comfort.
