The State Grid Corp of China has agreed to acquire a 49 percent stake in Oman's Electricity Holding Co, a landmark deal that marks a new step for China and Oman to jointly pursue cooperation under the Belt and Road Initiative.
A robot offers services at the State Grid service hall in Tongling, East China's Anhui province, on Aug 22, 2018. (Photo: VCG)
The State-owned grid operator said on Monday that it has signed an agreement with Oman's Nama Holding, the holding company of Omen Electricity Holding Co, without giving any financial details.
State Grid President Xin Baoan termed the steps as a significant one that will deepen the strategic partnership between the two countries and expand bilateral economic, trade exchanges.
"As a long-term investor in the global power industry, State Grid will give full play to its comprehensive advantages in technology, management, construction and capital. We will work with Omani partners to ensure safe and reliable power supplies for Oman's economic prosperity and social development," Xin said.
Chinese Ambassador to Oman Li Lingbing said the deal is the largest single investment by a Chinese company in Oman and will help expand power and energy cooperation between the two countries.
Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said going global is a practical measure for the State Grid as there are ample opportunities to invest and operate in the BRI-related economies.
State Grid has strong management capabilities and has the ability to turn loss-making overseas projects into money-spinners, he said.
"SGCC's modern and efficient management ensures that it is able to undertake BRI projects with promising profitability," he said.
Another factor contributing to SGCC's profitability and increasing presence in overseas projects is that Chinese companies have low construction costs, he said.
State Grid supplies power to over 1.1 billion people in 26 provinces, autonomous regions and municipalities in China. It has invested and operated backbone energy networks in countries like Brazil, the Philippines, Portugal, Australia, Italy and Greece.
In recent years, China and Oman has been actively embracing the Belt and Road Initiative and has already made considerable progress.
Chinese companies have carried out a number of projects in Oman with cumulative turnover of more than $6 billion, covering fields such as oil and gas resources exploration and development, electricity, communications, deep-sea fishing and processing sector, ambassador Li said in a recent interview with Xinhua News Agency.
China has been Oman's largest trading partner for several years, while Oman is China's fourth-largest trading partner among Arab countries. Bilateral trade volume between the two countries reached $21.7 billion last year, up 40 percent year-on-year, Li said.