Oman developing framework that could tap ESG-focused investors | Business and Economy News

Oman developing framework that could tap ESG-focused investors | Business and Economy News

Heavily indebted Oman is developing environmental, social, and governance standards that would bolster its enchantment with investors involved about sustainability, sources inform Reuters.

The authorities of Oman is engaged on an environmental, social and governance (ESG) framework that could permit the closely indebted Gulf oil-producing nation to widen its funding base, two sources accustomed to the matter instructed the Reuters information company.

The transfer got here as Oman works with the International Monetary Fund to develop a debt technique after state coffers have been harm by low oil costs and the COVID-19 pandemic final yr.

Work on developing an ESG framework is at its early levels, mentioned one of many sources.

A second mentioned that whereas it was not linked to particular debt issuance plans, it will show helpful to tap ESG-focused investors in future fundraising workouts.

The Ministry of Finance didn’t instantly reply to a remark request from Reuters.

Since the oil worth crash in 2014, Oman’s debt-to-GDP ratio has jumped from 15 p.c in 2015 to about 80 p.c final yr, whereas Oman’s plans to diversify income away from oil and cut back spending on its bloated public sector have lagged.

But the sultanate has launched into a collection of measures prior to now yr to repair its funds, together with the introduction of a value-added tax.

This has helped it preserve entry to the worldwide debt markets and elevate billions of {dollars} between loans and bonds this yr regardless of a ballooning funds deficit.

The growth of a sustainability framework got here amid a rising consciousness amongst worldwide investors about ESG dangers, and efforts within the oil-producing Gulf area to draw capital to low-carbon and environmentally sustainable investments.

The neighbouring United Arab Emirates this yr introduced sustainable finance pointers, and sources instructed Reuters in July that Saudi Arabia’s Public Investment Fund had requested banks to assist it develop an ESG framework.

In its Vision 2040 – an financial growth plan launched this yr – Oman mentioned it goals to be ranked among the many high 20 nations within the world Environmental Performance Index by 2040.

It is at the moment ranked 110 out of 180 nations.

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