The Japan Bank for International Cooperation (JBIC) has signed a memorandum of understanding (MOU) on a comprehensive strategic partnership for infrastructure development projects and an untied loan agreement totalling up to US$150mn for the Sohar Port Expansion Project with Oman’s ministry of finance.

Under the MOU, JBIC and Oman’s government will consider comprehensive and strategic cooperation for infrastructure development projects, and for projects in which Japanese firms have a stake, in Oman. Opportunities to utilise JBIC’s financial instruments will be explored.

The loan, which is based on the MOU, will finance the expansion of the Sohar Port, located in the Sohar industrial area, 230km northwest of Oman’s capital Muscat. The project is part of the Sohar Industrial Area Development Project for diversifying the country’s industry.

It is co-financed with Bank of Tokyo-Mitsubishi UFJ (agent bank), Mizuho Corporate Bank, Sumitomo Mitsui Banking Corporation, the Tokyo branch of HSBC and the Tokyo branch of Calyon Corporate and Investment Bank, with JBIC providing a guarantee for the co-financed portion.

The loan will support the business activities of Japanese firms in Oman, since many are expected to deliver machinery and equipment to the Sohar industrial area. Moreover, Oman is an important source of energy supply for Japan. By strengthening ties with Oman through this MOU and loan, JBIC is working to secure Japanese energy supply sources.

Oman’s government is focusing on diversifying the country’s industrial structure to ensure sustainable economic development. As part of this effort, it aims to develop Oman’s infrastructure to encourage overseas investment.