The State General Reserve Fund of Oman signed an agreement of strategic co-operation for water infrastructure investment in Vietnam on August 31 between the fund's Vietnam-Oman Investments JSC (VOI), Manila Water Company (MWC) and Saigon Water Infrastructure Corporation (SII) – a subsidiary of Ho Chi Minh City Infrastructure Investment JSC (CII).
Most of the projects will be in or around Ho Chi Minh City.
Under the agreements, VOI is committed to invest in a number of SII's joint projects such as highway projects or safe water supply projects.
Meanwhile, the Manila Water Company, a leading private company of the Philippines with a total capital of around US$10 billion, committed to support SII in technical areas and management, particularly in water supply network management.
VOI Chairman Abdullah Al-Harthy said in a press release sent out to the media that: "The State Government Reserve Fund of Oman is very keen to enhance and extract value from sectors that play a vital role in Vietnam's growth story."
"We have been confidently working with CII on a number of projects with high impact on the economic and social development of Vietnam. In particular, CII, MWC and we all find that there is an urgent need and a huge economic value for the new water network development in areas that the people of Vietnam have limited access to clean water", he said.
VOI was founded in 2009 as a joint venture between the two sovereign wealth funds of Oman and Vietnam: the State General Reserve Fund of Oman (SGRF) and the State Capital Investment Corporation of Vietnam (SCIC).
VOI mainly focuses in long term and value investments in growth sectors such as power plants, toll roads, water supply, ports and logistics, consumer goods, health care, agriculture, and manufacturing.
The Ho Chi Minh City Infrastructure Investment JSC (CII) is the leading infrastructure developer and operator in Ho Chi Minh City and in the south of Vietnam with market capitalisation of $220 million and a portfolio of strategic infrastructure assets of around US$1.5 billion diversified in bridges and roads, water supply and distribution, industrial zones and property development.
Hai Phong Port
Oman' sovereign fund may also become an investor in Haiphong Port, according to Vietnam National Shipping Lines (Vinalines), a state-owned company that currently runs the port.
According to Vinalines, there are current three potential strategic investors that can acquire the Haiphong Port from the State, including SGRF, Vietinbank or Vingroup, the Giao thong (Transport) newspaper reported.
Vinalines said that SGRF has better chance in this deal as the Oman's reserve fund has experience in managing a seaport.
SGRF was founded in 1980 by the Oman Government with total asset of $35 billion. The reserve fund has invested more than $1 billion in many big seaports in Turkey, Netherlands, Belgium and Brazil.
If SGRF becomes Haiphong Port's strategic partner, the Oman's fund will provide the port US$2 million over three years on human training and technical support to make the port an important link in the global seaport network, said Nguyen Canh Tinh, Deputy Director General of Vinalines.
He said Vinalines always targets a strategic investor who is capable of providing the best support in terms of technology and technique to improve the management of Hai Phong Port.
The strategic investor should have strong financial status, not make loans from financial institutions to invest in the port and have three years of experience in running a deep-water seaport, Tinh said.
After selecting the strategic investor for the port, Vinalines plans to directly negotiate the deal with the investor on the Ha Noi Stock Exchange, and sell Haiphong Port's stakes to the investor in the fourth quarter of this year, he said, adding that the Vietnam's corporation expects a return of VND1.55 trillion ($69 million) from this deal.