MUSCAT: Oman Electricity Transmission Company (OETC), the majority state-owned operator of Oman’s national grid, anticipates a capex programmee amounting to RO 840 million (approx. $2.18 billion) over the 2025-2028 timeframe, consistent with a robust strategy to expand and modernise the country’s electricity networks. This compares with a capex of RO 450 million (approx. $1.168 billion during the previous business plan spanning the 2024-2027 timeframe, according to international ratings agency Fitch.

 

Fitch noted in a new report that OETC’s capex growth is driven by its decision to accelerate some expansion projects, including Phase 2 of the North-South Interconnector Project – a landmark initiative to link standalone grids in the north and south of the country. The interconnector supports not only a transition to gas-powered power generation – thereby effectively phasing out pockets of diesel-powered generation - but also opening up vast swathes of Oman to renewable solar and wind power development.

 

Fitch’s comments came in a new ratings update issued on Monday, April 28, 2025. In the report, Fitch affirmed OETC’s Long-Term Issuer Default Rating (IDR) at 'BB+' and senior unsecured rating at 'BB+' with a Recovery Rating of 'RR4'. The Outlook on the IDR is Stable, it noted.

 

“The affirmation reflects OETC's commensurate financial structure, despite a projected breach of its net leverage negative sensitivity in 2026, driven by high capex, before leverage improvement in 2027. Our forecast incorporates shareholders' commitment to the rating and support through equity injections and moderate dividend cuts. However, rating headroom remains very limited. Insufficient shareholder support or weaker cash flows leading to leverage consistently above its negative sensitivity would result in a negative rating action,” Fitch added.

 

Earlier in March, OETC revealed that it intends to ramp up investment across its network in part to enable the evacuation of renewable power from a host of new solar and wind energy projects envisioned for development across the country. Some of the investments, it noted, are “designed for the evacuation of new generation capacity and support load growth and system security standards.”

 

It also cited in this regard its central role in managing the intermittent nature of renewable energy as Oman prepares to boost the share of clean energy generation from 5.9 per cent of total capacity as of 2024, to 32.7 per cent by 2028. Renewable energy’s component is projected to further rise to 70 per cent by 2040.

 

OETC is 51 per cent owned by state-run Nama Holding, and 49 per cent by State Grid International Development Ltd (SGID), which is part of the wholly Chinese-owned State Grid Corporation of China, the world’s largest transmission network operator.

 

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