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Oman Investment Authority: A Financial Powerhouse

In an impressive announcement, the Oman Investment Authority (OIA) revealed its financial performance for 2024, showcasing a net profit of $4.12 billion. This success underscores OIA's strategic role as one of the leading sovereign wealth funds worldwide, with total assets under management reaching $53 billion. Not only does this mark a significant achievement for Oman, but it also places OIA among the top 10 sovereign funds recognized by Global SWF based on their five-year annualized returns.

The OIA operates with a keen focus on enhancing economic development in Oman by investing through various channels. It manages its investments under three dedicated verticals: the National Development Fund (NDF), the Future Generations Fund (FGF), and the Future Fund Oman (FFO). A noteworthy characteristic of OIA’s portfolio is its diversification, encompassing over 50 countries. As of now, around 63% of the portfolio is focused on domestic investments, while 19.9% is allocated within North America, with remaining investments spread across Europe, Asia, Africa, and Latin America.

In 2024, the NDF deployment stood at approximately $4.9 billion, exceeding its initial target of $4.4 billion. These funds have significantly enhanced domestic projects, with a primary focus on energy, logistics, tourism, mining, and telecommunications. For instance, 68% of NDF's commitments were directed toward energy initiatives, including additional funding for the Duqm Refinery and launching new solar plants with a combined capacity of 500 MW. Additional investments were made in logistics through the Asyad Container Terminal, as well as reopening copper mines to support the mining sector.

The FGF has notably expanded its international presence by investing in 13 new funds focusing on promising sectors such as artificial intelligence, healthcare, financial technology, and the transition to renewable energy. As an emerging leader in innovation, OIA's early investment in the AI sector, particularly through its stake in xAI, positions it strategically to capitalize on global market trends while ensuring the relevance of these sectors to Oman's evolving economy.

Launched in January 2024, the FFO aims to attract foreign investment and support the growth of local businesses, committing $865 million to various initiatives, including the Sohar PolySilicon plant, which is expected to become the largest of its kind outside China. The fund also collaborates with partnerships targeting ICT, renewable energy, electric vehicle supply chains, and agritech, ensuring a multifaceted approach to investment.

In a demonstration of sound fiscal management, OIA's portfolio companies repaid more than $4.7 billion in debt, including a significant $1.4 billion prepayment by the OQ state energy group. As a result, sovereign guarantees have decreased to $4.7 billion, almost halving compared to the previous year. OIA successfully divested six assets, thus attracting fresh capital and expanding local equity involvement, with a highlighted success being the 25% IPO of OQ Exploration & Production.

OIA remains committed to fostering innovation and entrepreneurship within its supply chain, with small to medium enterprises accounting for nearly 20% of their spending. By allocating more than $28 million in direct funding, it aligns its expenditure with local business development.

In addition to its financial prowess, OIA has fostered strong relationships with institutional investors and hosted a record global gathering of sovereign wealth funds in Muscat. This engagement resulted in enhanced visibility and recognition from the World Bank, contributing to Oman's reinstatement to investment-grade status.

Given the volatility in energy markets and geopolitical challenges, OIA has outlined plans to increase its focus on renewable energy, digital infrastructure, and essential minerals while reducing reliance on hydrocarbons. This strategic shift reinforces its commitment to divesting non-core assets and fostering co-investment opportunities that facilitate knowledge transfer to Omani ventures.

With robust financial results in 2024, improved access to capital markets, and a technology-driven project pipeline, OIA is poised to play a pivotal role in stabilizing Oman's public finances, ensuring long-term economic sustainability.

For further insights, the OIA's 2024 Annual Report is accessible at www.oia.gov.om.