A new phase in economic and trade relations between the Sultanate of Oman and the Arab Republic of Egypt is set to commence in the wake of the official visit of His Majesty Sultan Haitham bin Tarik to Cairo starting on Sunday.
It is anticipated that the upturn in economic and investment ties will be driven by stronger cooperation in, among other areas, the renewable and green energy sector, given the abundance of natural resources – sun and wind mainly - that both countries enjoy.
Accordingly, both Oman and Egypt have embarked on a major drive to harness these sustainable resources for electricity generation initially, and later to power the growth of a green hydrogen sector to supplant their current dependence on hydrocarbons for economic development. These commonalities in their respective national visions for growth promise to open the way for mutually beneficial cooperation centring around the future green energy sector.
It is in this context that the Omani government, represented by Oman Investment Authority (OIA), signed a MoU last November with Saudi-based energy giant ACWA Power to explore the feasibility of investing around 10% in the development, construction, and operation of Egypt’s 1.1GW Suez Wind Energy project – a mega-scale venture estimated to cost $1.5 billion.
The MoU was signed on the sidelines of the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) in Sharm El Sheikh, Egypt. It was in line with Oman’s efforts to enhance joint investments with Arab nations like Saudi Arabia and Egypt in renewable energy projects, particularly wind power.
The Suez Wind Farm project, which is expected to start operations in 2026, is located close to Ras Ghareb City in the Gulf of Suez region near Jabal Al Zait in Egypt. Power will be generated using turbines of up to 220 metres in addition to several latest advanced technologies. The plant is expected to operate at the highest level of efficiency and will generate enough power for approximately 1,080,000 residential units and reduce about 2.4 million tonnes of carbon emissions annually.
Cooperation in the hydrocarbon sector has also accounted for a key share of the bilateral relationship between the two countries over the past decades.
This was affirmed during the signing of an MoU between the two countries in September 2019 to foster cooperation in the field of petroleum and natural gas.
Under the MoU, both sides also committed to exchanging expertise and technologies in addition to cooperation and investment in the production storage and marketing of petroleum and natural gas.
Beyond the energy industry, Egyptian civil contracting, architectural design and other engineering firms have made a key contribution to Oman’s civil and infrastructure development over the past decades by extending their expertise across a number of design and engineering disciplines. Egyptian contractors have fared exceptionally in Oman’s water and wastewater sectors, as well as in the implementation oil and gas pipeline projects. Notable is the example of Petrojet, leading Egyptian civil contractor, which is credited with laying a number of key pipeline projects to support the development of Oman’s gas transportation infrastructure.
According to Abdullah bin Nassser al Rahbi, Ambassador of Oman to Egypt and its Permanent Representative to the Arab League, trade ties between the two countries have flourished as well in recent years. Bilateral trade soared nearly 90 per cent to RO 394 million in 2022, up from RO 218 million a year earlier. The balance of trade was largely in Oman’s favour, with goods and commodities nearly doubling to RO 298 million in 2022, up from RO 157.5 million a year earlier.
Imports into Oman from Egypt also rose around 50 per cent to RO 95.5 million last year, up from RO 60.2 million in 2021.
Omani exports to Egypt typically comprise a mix of metal ores, fish products, aluminium-based goods, and chemical products. Imports from Egypt are made up of dairy and farm products, electrical appliances, and furniture, among other merchandise.
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