Future Fund Oman launched
The Oman Investment Authority has officially launched Future Fund Oman to attract foreign investment and boost investments in local small and medium-sized enterprises (SMEs).
The fund has a capital of 2 billion Omani Rials (OMR) to be used over a five-year period at OMR 400 million per year. It will allocate 90% of its capital to new or existing projects. Of the remaining 10%, 7% will be allocated to SMEs and 3% to startups.
The fund will target eight sectors: tourism; industry and production; green energy; information and communications technology; ports and logistics services; mining; fisheries; and agriculture.
Abdulsalam Al Murshidi, President of the Oman Investment Authority (OIA), said the fund aimed to stimulate growth of the national economy and to provide a reliable partner for local and international investors wishing to expand in the Omani economy or enter the Omani market.
He said Future Fund Oman would aid integration with the private sector, provide support for SMEs and stimulate the venture investment system in Oman. He said the fund would serve as a third portfolio in addition to the two current investment portfolios, National Development and Generations.
Mr Al Murshidi said the OIA would manage the fund using its proven ability to achieve good returns from investment and development. In a statement to reporters, he said the fund would support all initiatives whether carried out by government companies, companies from the private sector or by foreign private initiatives.
He said the fund would be flexible enough to provide several forms of financing acting as a capital partner and as a lender. He noted that there are no current funds or portfolios that can finance more than OMR 5 million. Future Fund Oman will be able to finance projects up to OMR 100 million each, with a maximum of 40 percent of the capital in the partnership. The private sector will lead such projects.
Mr Al Murshidi stressed the need for financed projects to have undergone economic feasibility studies from neutral parties. Progress will be via a digital platform to save effort and time for project owners.
He said foreign investors were always looking for incentives, including the presence of local financing bodies, adding that priority would be given to projects that are most valuable to Oman in terms of providing jobs, using Omani raw materials, contributing to the Omani economy and the size of the local product.
Halima bint Rashid Al Zaria, Chairwoman of the Small and Medium Enterprises Development Authority, said the allocation of 10% of the fund to SMEs would increase access to non-traditional financing for emerging innovation and technology companies.
The fund will be governed by the OIA with the best international practices to ensure efficiency and flexibility in order to achieve the financial and economic objectives desired. It will complement the system of financing and investment coverage provided by the government through the Oman Development Bank, the Small Enterprises Portfolio, the Rakiza Fund and the Oman Technology Fund.
Funding will be made through direct financing at market cost or through capital partnerships with the private sector so that financing is distributed in a balanced manner and not focused on a specific sector.
In compliance with the rules of governance and transparency, the fund will be subject to the quality standards adhered to by the Oman Investment Authority, which ranked second globally in the Governance and Sustainability Performance Development Index between 2022 and 2023. The fund will have two committees: the investment committee will include five members from the OIA, the Ministry of Finance, and independent bodies and will be responsible for approving new investments, subsequent investments, and exits. An advisory committee will supervise the investment in SMEs and emerging companies.
In order to achieve the national objectives of establishing the fund, the Ministry of Finance will be a strategic partner to the agency in managing direct local projects. The Small and Medium Enterprises Development Authority will be a member of the advisory committee that provides views and guidance to the fund’s investment committee.
The Omani National Investment Development Company (Tanmia), ITHCA Group, Omantel, and Cyfr Capital will manage investments in SMEs and startups.
The aim is to invest in modern technologies and automate processes in a way that makes it easier for beneficiaries of all categories. Applications for the fund’s services can be made through the electronic platform on www.Futurefund.om, which has all the information and requirements related to financing applications. Investors will need to register an account on the platform and answer a set of questions to determine the type and suitability of the investment opportunity.
If financing conditions are met, the applicant will have to fill out the investment opportunities form to complete the application process, which will then be referred to the relevant team for consideration. The process of reviewing and analysing the application may take up to three months and applicants will be notified of the status on a regular basis. The required documents will depend on the nature and stage of the project but must include a feasibility study that lays out the expected technical and financial information for the project, the sponsor’s previous financial reports and personal identification documents.
This is an unofficial English version of an Arabic report. To view the official Arabic text, click here.