Oman credit outlook strengthens as OIA reforms drive financial resilience
MUSCAT, Oman/PRNewswire/ -- The Sultanate of Oman's recent credit rating affirmation at BBB- with a positive outlook by Standard & Poor's (March 2025) reflects the government's effective fiscal consolidation efforts and improved economic management. A key contributor to this achievement is Oman Investment Authority (OIA), the country's sovereign wealth fund, which since assuming oversight of state-owned companies under the National Development Fund in 2020, has implemented robust governance reforms and targeted debt reduction strategies. These measures strengthened the financial positions of portfolio companies, directly contributing to Oman's enhanced credit profile and overall financial resilience.
OIA successfully reduced the aggerate debt of its subsidiaries from USD 29.64 billion in 2021 to USD 23.92 billion by the end of Q3 2024. A notable example is OQ Group, Oman's integrated energy company, which achieved a credit rating upgrade that led to a marked improvement in its net debt-to-profit ratio, enhancing both its financial efficiency and long-term sustainability. In parallel, OIA renegotiated loan terms with banking partners to secure more cost-effective and flexible financing structures, further reinforcing the operational resilience of its portfolio.
OIA also significantly reduced reliance on government guarantees to enhance the financial independence and governance of its key subsidiaries. Guarantees extended to major companies such as OQ Group, Asyad Group, Oman's logistics provider, and Nama, Oman's primary provider of electricity, water and wastewater services, were reduced from USD 8.32 billion in 2021 to USD 4.68 billion by 2024, with no new guarantees issued since. In addition, Duqm Refinery and Petrochemical Industries Company (OQ8) recently passed the Lenders Reliability Test (LRT) enabling it to unlock over USD 2 billion in shareholder guarantees. This decisive shift has lowered fiscal risk for the government and signaled a new era of accountability, encouraging companies to leverage their own financial strength and drive future growth.
OIA has also further strengthened transparency across its portfolio by mandating financial performance disclosure across its portfolio. Simultaneously, strategic partnerships have attracted foreign investment into priority sectors, contributing to stronger foreign currency reserves.
These collective initiatives demonstrate OIA's commitment to Oman Vision 2040 by reinforcing confidence in the Omani economy and supporting long-term sustainability. They also position the Sultanate of Oman as a trusted and competitive investment destination.
Photo - https://mma.prnewswire.com/media/2666768/OIA_HQ.jpg
Contact:
Al Yaqdhan Ali Al Abri
Senior Officer - Strategic Communication
Tel: +968 24745659
alyaqdhan.alabri@oia.gov.om
SOURCE Oman Investment Authority
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