The Japan Bank for International Cooperation (JBIC) has signed an untied loan agreement for a total of Y9bn (US$81.8mn) with the Sultanate of Oman. The loan was co-financed by nine Japanese private financial institutions, with UFJ Bank as the lead bank. JBIC also provided a guarantee for the portion covered by the private financial institutions.
This loan will be used for the construction of a 90km highway between Quriyat and Sur, two cities to the southeast of the capital Muscat, as part of an effort to link Muscat with Sur. The project aims to strengthen links between Oman’s two economic zones, one centred on Muscat and Sohar in the northeast and the other on Sur. It will help Oman to develop its economic infrastructure and lead to stronger ties with Japan, which considers the country an important energy resource supplier.
Oman’s only liquefied natural gas (LNG) production and export base operates in the vicinity of Sur, utilising natural gas produced at gas fields in the inland region. The Sultanate of Oman has designated Sur a top priority area for development, as the country is engaged in shifting the major thrust of its exports from oil to natural gas. Meanwhile, Japanese firms have long participated in Oman’s LNG projects and are likely to continue their participation in gas-related activities over the coming years, including LNG plant expansion and petrochemical projects.
This is the third untied loan JBIC has extended to Oman. The two previous loans were provided for infrastructure development projects: the Sohar Industrial Estate Project in March 1989 and the Sohar Port Construction Project in March 1999.