Oman Launches $5.2B Future Fund for Investment Advancement

The Oman Investment Authority (OIA) has initiated the establishment of the 'Future Fund Oman' with a substantial capital infusion of $5.2 billion, earmarked for deployment over the course of the next five years, at an annual rate of $1 billion.

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This fund is designed to direct 90% of its capital towards direct investments in large-scale projects, whether newly established or existing, that demonstrate commercial and economic viability within Oman's borders. Additionally, 7% of the fund's capital is designated to provide financial support to small and medium-sized enterprises (SMEs), while the remaining 3% will be channeled into investments in startup ventures. This announcement was made by the Oman Investment Authority in a statement released on Wednesday.

The primary objective of the Future Fund Oman is to serve as a catalyst for economic diversification, placing particular emphasis on bolstering the private sector, attracting foreign direct investment (FDI), supporting SMEs, and nurturing the growth of venture capital initiatives.

As highlighted in a report by S&P last year, Oman's economy is heavily reliant on the oil sector, which contributes approximately 30% to the Gross Domestic Product (GDP), 60% to goods exports, and 70% to government fiscal receipts. The agency anticipates that increased hydrocarbon production in 2024 and 2025 will provide a significant boost to the country's economy.

The goal of the Oman Investment Authority, which was established in 2020 to improve the oversight of public firms and the government's financial assets, is to sell off some of its shares in these companies. Presently, it uses two primary funds—the Future Generations Fund (FGF) and the National Development Fund (NDF)—to oversee its assets.

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