Oman and UAE seek new trade era after multi-billion dollar deals

Ryan Carter / UAE Presidential Court

• UAE president signs deals with Sultan of Oman during state visit
• Oman-Etihad Rail Company established
• Investments planned in hydrogen and solar and wind energy
• Deals explored in agriculture, logistics, technology, and healthcare 

Oman and the UAE are looking to begin a new era in trade relations following the signing of deals to boost collaboration in culture and media, railways, education, scientific research, agricultural wealth and financial markets.

UAE President Sheikh Mohamed bin Zayed Al Nahyan visited Oman this week to sign an agreement between Oman Rail and Etihad Rail.

The deal will jointly establish the Oman-Etihad Rail Company which will invest $3 billion to design, develop and operate a railway network connecting Sohar Port to the UAE National Rail Network.

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ADQ, an Abu Dhabi-based investment and holding company, also discussed a range of investment opportunities with Oman Investment Authority (OIA), potentially worth $8.2bn.

The high-profile deals were part a number of memoranda of cooperation signed during the two-day visit between Sheikh Mohamed bin Zayed Al Nahyan and Oman’s Sultan Haitham bin Tariq.

The memoranda included a partnership agreement between Abu Dhabi Securities Exchange and Muscat Stock Exchange in the field of double-listing of securities.

The aim is to build on bilateral ties, which saw the volume of non-oil trade reach $12.5bn in 2021, a growth of nine percent compared to 2020 and almost double that of a decade ago.

The UAE President’s plane was escorted by fighter aircraft of the Royal Air Force of Oman as it entered the airspace of the sultanate in celebration of his arrival on Tuesday.

He stressed that the UAE supports measures to further strengthen regional cooperation and progress, and is keen to work with Oman to “promote sustainable development that enables people to realise their full potential”.

He added: “The UAE and the sultanate of Oman share deep-rooted ties that grow stronger every day.”

The two parties said in a statement that the new agreement struck between Oman Rail and Etihad Rail aims to unlock new opportunities by strengthening commercial exchange and social cohesion and connecting key urban centres.

The 303km-long railway will primarily link Sohar to Abu Dhabi, with passenger trains designed to reduce travel time to one hour 40 minutes, and from Sohar to Al Ain to 47 minutes, travelling at a maximum speed of 200km/h. 

Abdulrahman Salim Al Hatmi, group CEO of Asyad, the parent of Oman Rail, said that adding a new railway “will offer trade and logistics companies outstanding investment opportunities and empower manufacturing and industrial activities to quickly expand beyond borders”. 

Shadi Malak, CEO of Etihad Rail, added that the project “outlines a strategic roadmap for a sustainable project which will contribute to bolstering the solid relations between the UAE and Oman”.

He added: “It will play an instrumental role in facilitating national and regional trade by connecting the UAE National Rail Network with Sohar Port.”

Further investments in renewable energy sector

ADQ and OIA have also identified preliminary investments to be assessed further that are worth over $8.2bn across target sectors including hydrogen, solar and wind, green aluminium and steel, as well as water and electricity transmission lines. 

The two parties recently entered into a $2.7bn partnership agreement to facilitate investments between the UAE and Oman in sectors of mutual priority and interest.

Additionally, ADQ and Oman Information, Communication and Technology Group (ITHCA), a wholly owned subsidiary of the OIA, signed a MoU to establish an $161 million venture capital fund to invest in high growth technology companies in the sultanate. 

ADQ said it is also exploring investment in other sectors that include but are not limited to food and agriculture, logistics, technology, and healthcare. 

Mohamed Hassan Alsuwaidi, managing director and CEO at ADQ, said: “We discussed several potential strategic opportunities that can unlock significant synergies and value through joint collaboration across key industries in the Sultanate.

“Today’s engagement builds on our recent efforts and commitment to develop tangible investment partnerships in key markets, such as Oman, that complement our investment strategy and growth aspirations.”

Abdulsalam Al Murshidi, president of OIA, added: “Our discussions today will not only create a platform to enable us to explore mutually beneficial co-investment opportunities, but facilitate knowledge sharing to strengthen our respective organisations’ investment platforms.”