MUSCAT: The Sultanate of Oman has formalized its partnership with the OPEC Fund for International Development through a loan agreement, securing financing amounting to $392 million. This funding is dedicated to the construction of the Khasab-Diba-Lima road project in the Musandam Governorate. The agreement was executed by Sultan bin Salim al Habsi, the Minister of Finance, alongside Dr. Abdulhamid al Khalifa, the President of The OPEC Fund, during the 2024 World Bank/IMF Annual Meetings in Washington, D.C.
This agreement follows a recent decision by the Vienna-based private banking institution to approve a loan facility of up to $392 million for the construction of the landmark road project in Oman. The Fund has described the 72-kilometer project as a strategic investment by Oman, highlighting that the road will "reduce travel times, enhance traffic safety, and increase traffic flow." The loan will be disbursed in two phases: an initial $180 million and a subsequent $212 million.
In a statement, the OPEC Fund emphasized the significance of this loan as a testament to the deepening collaboration with the Sultanate of Oman. "We are delighted to further our cooperation with Oman through these agreements, which are in line with our mutual objectives of promoting sustainable development and enhancing regional connectivity. The Khasab-Diba-Lima Road Project represents a crucial investment in Oman's future, and supporting the private sector will further our activities for the benefit of the local economy," stated Dr. Al Khalifa.
The Fund also noted that approximately 94% of the total project cost, amounting to $416.46 million, will be covered by this loan facility. In addition to improving regional connectivity, the road link will facilitate safer and faster access to markets, thereby boosting the local economy.
In December of the previous year, the Ministry of Transport, Communications and Information Technology (MoTCIT) entered into an agreement with the renowned Omani contractor Al Sarooj Construction for the design and implementation of the Khasab-Diba-Lima road link, at a cost of approximately $390 million. This project, which includes the construction of 11 bridges, will traverse the challenging mountainous terrain of the Musandam Governorate.
Furthermore, a framework agreement on Private Sector Operations was also signed by Oman with the OPEC Fund.
This latest loan facility marks the second instance in which Oman has received financial support from the OPEC Fund. Despite not being a member of OPEC, Oman remains an active participant in the OPEC-Plus Alliance, which collaborates to stabilize global oil prices.
In July 2019, the Fund extended a $130 million loan to support the construction of the Al Sharqiyah Expressway Tunnels Project, marking the first such project in Oman. Since its inauguration, the two 'twin-tube' tunnels have significantly improved connectivity between the northern and eastern governorates of Oman, ensuring the safe and efficient movement of people and goods.
