Industry Trend Analysis - Infra Fund To Support Funding Flexibility - FEB 2018

BMI View : The decision to establish a sovereign wealth-backed fund targeting infrastructure projects signals the Omani government ' s continued willingness to harness non-traditional sources of funding to develop infrastructure assets and solidifies our bullish view of the Sultanate ' s construction sector growth outlook.

It was announced on January 17, 2018 that Oman's sovereign wealth fund will establish a USD1bn fund dedicated to financing infrastructure projects throughout the Sultanate, which cements our bullish view of the country's construction sector growth potential. Oman's intention to deploy USD1bn into its infrastructure sector adds further upside to our already positive construction sector growth forecast, which places the country among the fastest growing markets on both a regional and global basis.

Government officials indicate that the fund will target the energy and transport sectors, complementing existing government-backed investment plans to construct a national rail network and adding additional upside to the growth outlooks of these segments (see, ' Government Support To Galvanise Transport Growth, ' November 18, 2016). As such, we see scope for the transport and energy sectors to increase their total share of Oman's project pipeline in the years ahead (see chart below).

Infrastructure Fund Solidifies Positive Growth Story
Construction Industry Value, OMRbn & Real Growth, % y-o-y
f = BMI forecast. Source: Central Bank of Oman, Ministry of National Economy

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