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OETC raises $600mn via international bond sale

10 Feb 2021

Oman Electricity Transmission Company (OETC), a member of Nama Group, successfully floated a US$600mn bonds issue in the international bonds market. The ten-year bonds, which pay an interest rate of 5.8 per cent per annum, will mature in February 2031.

This is the first government-related entity bonds issuance out of Oman since 2018 and it marks OETC’s return to the international bonds markets after a brief hiatus of about four years, the company said in a statement on Wednesday.

It said the bond offering benefited from improving investor sentiments towards Oman, further highlighting the strategic importance of Nama Holding, its affiliate firms, partners in international money markets and investors.

Building on the stellar marketing efforts and thanks to its strategic diversification operations to woo the investors, Nama Group successfully engaged investors on the OETC bond transaction, paving the way for the State Grid International Development (SGID) to become a 49 per cent stakeholder in OETC.

OETC said the investors from across Asia, Europe and Americas showed keenness to participate in its international bond offering, making up over 83 per cent of the order-book. ‘The well-diversified allocation of orders across these regions is a testimony to the strength of OETC’s credit profile, as well as excellent teamwork that Debt Management Office at the Ministry of Finance, Nama Holding, OETC and SGID put together.’

The proceeds from this successful US$600mn international placement will be used to refinance some of the existing loans (including the shareholders loan extended to OETC by Nama Group and SGID) and to fund OETC’s capital expenditure programme thereby allowing the company to deliver on its infrastructure development plans.

OETC is authorised to undertake all regulated activities of electricity transmission and dispatch in northern Oman and Dhofar at voltages of 400kV, 220kV and 132kV. One of the major OETC capital expenditure programmes is the execution of the first phase of the 400kV North-South Interconnector project.

The extension of the Main Interconnected System will significantly boost the supply of fuel and electricity in the sultanate and bring about improvement to loads across various power systems, enabling them to deliver renewable energy to new project areas, share spinning reserves and achieve a reduction in cost of operation.

Moreover, the bond proceeds will support OETC to execute a 400kV project for the connection of a 1,000MW solar power plant at the Wilayat of Manah in Governorate of Dakhiliyah by 2024 and 2025. Such major investments will enable OETC to meet the growth in demand and connect committed and future resources.

OETC’s bond transaction was anchored by global emerging market bond funds which continue to look for high quality assets.

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