Oman Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in oman, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Overview

Oman has committed to net zero emissions by 2050. The government is looking to expand its electricity-generation capacities through renewable independent power projects (IPP), with plans to derive at least 30 percent of electricity from renewables by 2030, mainly through onshore wind and solar projects. State-owned PDO which aims to slash its emissions to 50 percent of 2019 levels by 2030, is an early pioneer in large-scale solar power projects in Oman. Oman’s integrated oil and gas company OQ is also seeking international partners to replace 40 percent of its three-gigawatt power consumption with renewable energy projects.

Commercial operations of Oman’s largest utility-scale solar photovoltaic, independent power project, Ibri 2, started in January 2022. Oman Power and Water Procurement Company (OPWP) awarded the project to a consortium of Saudi and Kuwaiti firms, for which Beijing-based Asian Infrastructure Investment Bank (AIIB) loaned $60 million. The project is AIIB’s first renewable energy financing project in Oman and the region. Another solar project, led by French developer EDF Renewables and its consortium partner Korea Western Power (KOWEPO), broke ground September 2023 for 500-megawatt solar photovoltaic power plant. Oman has embarked on several other projects in line with targets for 2030, including a wind farm in Dhofar, a solar IPP in Manah, 11 solar-diesel hybrid facilities, and the Sahim (Contribute) initiative to install small-scale solar panels on residential and commercial buildings. Chinese companies have announced several solar projects in Oman, some in joint venture with the Omani government. 

MEM introduced the Policy for the Use of Renewable Energy for Self-Generation and Direct Sale in January 2025, to liberalize the electricity market. Per this policy, eligible generators can sell output from renewable sources, mainly solar and wind, directly to eligible consumers, without the need to engage with the country’s sole offtaker, Nama Power and Water Procurement Company.

The Ministry of Transport, Communications, and Information Technology (MTCIT) announced in its 2023 plan that Oman will phase out fuel-operated vehicles and ensure that 79 percent of vehicles in the country by 2035 are electric. According to the ministry’s estimates, Oman will have at least 22,000 new electric vehicles (EV) by 2040. From July 2023, Oman implemented customs and tax incentives and facilities to encourage the acquisition of EVs and achieve zero neutrality in the transportation sector.

Oman’s clean energy development is not limited to traditional renewable sources. In October 2022, MEM unveiled a Green Hydrogen Strategy and announced the formation of Hydrogen Oman (Hydrom), a subsidiary of state-owned Energy Development Oman, to oversee development in the sector. Oman is targeting $140 billion of investment in the green hydrogen industry and hopes to achieve production of 1 million tons per year by 2030. Oman has also set up a new government entity, the Oman Sustainability Center, to oversee its carbon neutrality plans.

In November 2022, Hydrom initiated a process of hydrogen concession bid rounds under which investors pitched projects in return for land for its development. Hydrom awarded five large-scale green hydrogen projects in June 2023 to companies including BP (UK), DEME (Belgium), and a consortium including Shell (UK/Netherlands) representing a total investment of more than $30 billion and a total production of 750-kilotons per annum (KTPA) from 18-gigawatts of renewable energy capacity at the sites.  Hydrom awarded two large-scale projects in the Dhofar region, totaling $11 billion in investments, in its second green hydrogen auction round. In September 2023, U.S. firm Eden GeoPower, signed a Memorandum of Understanding with MEM to lead development of stimulated geologic hydrogen in Oman.

Leading Sub-sectors

Green hydrogen, solar IPPs, wind, and solar power projects are leading sub-sectors in Oman’s renewable energy sector, and they have created opportunities for U.S. businesses in the sale of equipment and services, technology transfer, smart grid development, battery storage systems, research and development, and privatization of government assets.

Opportunities

Oman’s abundant solar and wind resources, strategic location, and government support create a favorable environment for investment and development in solar PV projects and wind farms. Oman’s state-owned entities are set to issue tenders, presenting opportunities for existing providers of clean energy technology and financiers of large infrastructure projects.

In April 2025, Hydrogen opened a third green hydrogen auction round, offering a land block of up to 300 square kilometers in Duqm, with a Request for Qualification (RFQ) round. Qualified bidders will be then invited to submit proposals in early 2026. Companies interested in bidding can register through the Hydrom website. There are also opportunities to be part of the hydrogen value chain, such as electrolyzer supply. 

From 2025 to 2029, Nama plans to continue to procure new solar and/or wind IPPs on an annual basis. The Redevelopment plan includes three Solar PV projects and five wind projects. The future planned projects are Dhofar II Wind IPP, Duqm Wind IPP, JBB Wind IPP, Ibri III Solar IPP, MIS Solar IPP for Commercial Operations Date (COD)  in 2027, Ras Madrakah Wind IPP for COD in 2027, Sadah Wind IPP for COD in 2028, Solar PV IPPs 2029 for COD in 2029 and Wind IPP 2029 for COD in 2029.according to Nama Power & Water’s 7-Year Outlook Statement (2023-2029). 

Nama Power and Water Procurement Company invited proposals to conduct a feasibility assessment of geothermal energy potential in specific pre-identified locations across Oman. 

OQ Alternative Energy, the green energy investment unit of OQ Group, also has plans to develop a portfolio of renewable energy projects with a total capacity of around two gigawatts. 

Oman Environmental Services Holding Company (be’ah) is looking into the feasibility of Waste-to-Energy initiatives.

Resources

  • Hydrom
  • Petroleum Development of Oman
  • OQ
  • Nama
  • Oman Environmental Service Holding Company (be’ah)
  • Green Hydrogen Summit

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