RenewableEnergyResources in Oman 3.3 Electricity sector in Oman 3.3.1 Electricity companies In Royal Decree 78/2004 promulgated on 1 August 2004 the current sector and market structure was implemented. The main principles are privatisation of electricity companies and establishment of a regulator (the Authority). Former structures were transferred to the following government owned companies: • Electricity Holding Company • Oman Power and Water Procurement Company (OPWP) • Oman Electricity Transmission Company • Wadi Al Jizzi Power Company • Al Ghubrah Power and Desalination Company • Mazoon Electricity Company • Majan Electricity Company • Muscat Electricity Distribution Company • Rural Areas Electricity Company (RAECO) In terms of ownership the companies represent a mix of Government and private ownership - the above mentioned are wholly Government owned. The privately owned companies are: • AES Barka • SMN Barka • Al Kamil Power Company • United Power Company • Dhofar Power Company • Sohar Power Company • Rusail Power Company These companies have a majority of private shareholders. Further electricity privatisation will be implemented through the sale of the government interest in some of the successor companies listed above. However there are no plans to privatise Electricity Holding Company, OPWP and RAECO The Governments approach to privatisation has been to allow 100% private ownership for an initial period, with an obligation to make public offerings of stipulated shareholdings through the Muscat Securities Market. This has been a successful strategy and one that is likely to be adopted for the privatisation of successor companies. Page 36 of 134 .
RenewableEnergyResources in Oman Since 1 May 2005 the Authority has assumed full responsibility for the regulation of electricity and related water sector. The following activities in the sector are regulated: • Generation, Transmission, Distribution, Export, Import or Supply of electricity • Generation of electricity combined with Desalination of Water • Generation of electricity co-located with Desalination of Water • Central dispatching • Development and/or operation of international interconnections • Functions of OPWP Company The regulation is pursued through licensing by the Authority. The Government approves Permitted Tariffs, further privatisation plans, and liberalisation of the sector and approval of interconnections. The sector law includes provisions to safeguard interest of investors, for instance international arbitration. The sector law also provides that key electricity assets will remain available to service the needs of citizens irrespective of public private sector ownership. There is no provisionfor tax exemptionfor (foreign) investments in the renewable energy activities. Page 37 of 134 .