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China’s State Grid nears Oman electricity deal

China’s State Grid nears Oman electricity deal

State Grid Corp. of China is nearing an agreement to acquire a 49% stake in Oman’s state-owned transmission company in the first major privatization by the Middle East’s largest non-OPEC oil producer, people with knowledge of the matter said.

, the people said, asking not to be identified as the matter is private. Talks are advanced and the two parties are expected to reach an agreement as soon as Sunday, the people said.

Calls to Oman Electricity Transmission outside of normal business hours weren’t answered.

The privatization attracted interest from large international investors and is the largest in size in the country’s electricity sector, the people said. The nation’s Nama Holding would retain a controlling stake in Oman Electricity after the transaction, the people said.

A potential deal will be a landmark for the Gulf Arab monarchy as it embarks on asset sales of government-owned entities to plug one of the largest budget deficits among oil exporters. The deal is also a sign of China’s rising interest in the Middle East amid plans by President Xi Jinping to increase the nation’s political clout and revive ancient trading routes under his “One Belt, One Road” initiative.

Oman has one of the biggest budget shortfalls of all the sovereigns tracked by Fitch Ratings. The Gulf Arab monarchy’s finances have been hurt by lower oil prices, pushing the government to consider alternative sources of funding. It has been raising money from international debt markets to plug the deficit.

Oman Electricity owns and operates the nation’s main transmission network. The company, which is a subsidiary of Nama Holding, posted profits of 23 million rials ($60 million) for the first half of the year, compared with 17 million rials for the same period last year, according to information on its website.