In January 2024 the OR2bn ($5.2bn) Future Fund Oman (FFO) began operations, aiming to mobilise public and private capital behind one of the largest investment rollouts in the sultanate’s history. Set to provide OR400m ($1bn) per year from Oman’s budget over the 2024-28 period, FFO has already made a significant impact. In the first three quarters of 2024 the fund secured OR832m ($2.2bn) in financing, of which OR609m ($1.6bn) came from foreign investors.
These projects were officially announced in November of that year and span 10 key sectors, including tourism, renewable energy, manufacturing, technology and electric vehicles. Some 1600 jobs are being directly created by these investments, with indirect benefits also being realised. FFO is a critical project in Oman’s drive to encourage more targeted, sustainable foreign direct investment. It also dovetails with the sultanate’s long-term development plan, Oman Vision 2040, and its 11th five-year plan covering 2026-30. Both frameworks seek to boost investment while shifting emphasis to private sector-led development.
Key Industries
Established in collaboration with the Ministry of Finance, FFO is a portfolio of the Oman Investment Authority, the sultanate’s sovereign wealth fund. Some 90% of its value is dedicated in advance to major investment projects, with the remainder divided between small and medium-sized enterprises (SMEs) and start-ups. Major projects are defined as those with an investment value of between OR5m ($13m) and OR100m ($259.9m). In these, the fund itself may have a stake up to 40%, leaving opportunities for foreign and domestic investors alike.
Investment values for SME projects range from OR250,000 ($650,000) to OR5m ($13m), with 4%, or OR80m ($207.9m) of FFO’s OR2bn ($5.2bn), specifically dedicated to these projects. A further 3% is earmarked for start-ups, with investment values in these projects ranging from OR4000 ($10,400) to OR250,000 ($650,000). A final tranche of 3% is reserved for projects that are both SMEs and startups. FFO may participate in SME projects with a stake of up to 49%. For all these types of businesses, eight sectors have been designated priority areas for FFO’s stimulus: tourism, industry and manufacturing, green energy, information and ICT, mining, fisheries, agriculture, and ports and logistics.
Among the projects already moving forwards under the major project category is the $1.6bn United Solar Polysilicon plant in the Sohar Port and Free Zone. Expected to become operational in 2025, the plant will produce 100,000 tonnes of polysilicon, which is vital to semiconductors and solar panels. The project received $156m in financing from FFO. FFO has also entered partnerships with IDG Capital’s IDG Oman Fund and the EWP Oman Fund. The latter is a venture with ewpartners that supports investment in ICT, energy, tourism and agriculture.
Enterprising Plan
Overseeing SME and start-up applications for the fund are a range of fund management bodies. Applications submitted by SMEs are reviewed by TANMIA, while those presented by startups are assessed by the Omantel Fund, the ITHCA Fund and the Cyfr Fund, depending on the area of SMEs that they target. The application process is digital and a response is issued within 65 days.
In terms of SMEs and start-ups, FFO has helped finance restaurant delivery partner IO Kitchens, online insurance brokerage Bima, buy-now-pay-later financing solution service QP ay, blockchain digital identity platform Nashid, financial technology (fintech) platform Antom and BC lear Aligner, an artificial intelligence-driven dental braces service. As of the end of the third quarter of 2024, of the OR832m ($2.2bn) total invested in FFO projects, OR812.3m ($2.1bn) had been invested in major projects and OR20m ($52bn) in SMEs and start-ups. The latter includes projects in health care, ICT, fintech, food and beverages, e-commerce and retail technology.
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