Oman’s EHC picks advisors for Muscat power firm privatization
The consortium will be led by Canada-based CPCS Transcom International Limited
Oman’s state-owned Electricity Holding Co. (EHC), has picked a consortium of advisors to explore possibly privatizing its electricity distribution business, it said on Monday.
The consortium will be led by Canada-based CPCS Transcom International Limited and will start the study this month, EHC said in a statement.
The study will assess the options around privatizing MEDC and whether the company is ready for such a move. The potential privatization is part of the Omani government’s plan to promote private sector participation in the economy and enhance the value of the company for all stakeholders, it added.
While privatization of MEDC, which solely holds responsibility for distribution of electricity in Muscat, could be sensitive, it is an option for a cash-strapped government, further hit by declining oil prices, to shore up funds.
A small non-OPEC oil exporter, Oman already has smaller energy reserves than its wealthy Gulf neighbors and, after raising spending sharply in the last few years to improve social welfare and create jobs for its citizens, faces a challenge in managing its state finances.
The sultanate is anticipating a deficit of 2.5 billion rials, equivalent to about 8 percent of Oman’s annual gross domestic product in 2015.
Oman’s government, which faces widening fiscal deficits in coming years, owns more than 60 companies across various sectors of which it is looking to privatise some.
Earlier this month, Oman’s government said it may sell off part of oil refiner Oman Oil Refineries and Petroleum Industries Co (ORPIC) as it revives a privatisation programme in response to weak oil prices.