Oman Government Spending & Projects Review 2025–2026

Based on publicly available official government and authoritative press sources.

Sultanate of Oman — Government Spending & Projects Review | 2025–2026

SULTANATE OF OMAN

Government Spending & Projects Review

Fiscal Year 2026, the 11th Five-Year Plan (2026–2030), and Key Upcoming Projects

Published: May 2026

Based on publicly available official government and authoritative press sources.

Executive Summary

Oman enters 2026 in a position of measured confidence. Under the long-term framework of Oman Vision 2040 — Sultan Haitham bin Tarik’s roadmap for a diversified, sustainable, and knowledge-based economy — the Sultanate has successfully completed its Tenth Five-Year Development Plan (2021–2025) with stronger-than-projected revenues, meaningful debt reduction, and over 100 national projects delivered. The country now transitions into the Eleventh Five-Year Development Plan (2026–2030), setting the stage for an accelerated phase of economic transformation.

The 2026 State General Budget, approved on 2 January 2026, projects total expenditure of OMR 11.977 billion (approximately USD 31.15 billion) and revenues of OMR 11.447 billion (approximately USD 29.77 billion), yielding a deficit of OMR 530 million — 14.5% smaller than the 2025 deficit and equivalent to just 1.3% of GDP. The 11th Five-Year Plan, launched simultaneously, targets 4% annual real GDP growth, creation of 300,000 jobs over five years, and OMR 15.6 billion in additional investments directed toward priority sectors.

The strategic picture is defined by three converging trends: a decisive push into renewable energy (targeting nearly 30% of grid capacity from renewables by 2030); a determined effort to position Oman as a global hub for green hydrogen production and export; and an ambitious infrastructure build-out encompassing rail, ports, special economic zones, and urban development. This report provides a comprehensive, factual review of all three dimensions, drawing on official and authoritative sources.

Metric	Figure
Total Expenditure	OMR 11.977 billion (~USD 31.15bn)
Total Revenue	OMR 11.447 billion (~USD 29.77bn) at $60/barrel
Budget Deficit	OMR 530 million (~USD 1.38bn) — 1.3% of GDP
Deficit Reduction	14.5% smaller than 2025 approved deficit
Social Protection Allocation	OMR 614 million (benefits 1.6+ million citizens)
Education Budget (MoE)	OMR 1.525 billion
Employment Programme Funding	OMR 100 million annually (11th Plan)
Public Debt	OMR 14.6 billion projected (36% of GDP)
OIA Assets	~USD 54.6 billion
11th Five-Year Plan Investment	OMR 15.6 billion (~USD 40.6bn)
GDP Growth Target (2026)	4% at constant prices

1. The 2026 State General Budget

1.1 Overview and Approval

Oman’s 2026 State General Budget was approved and unveiled at a Ministry of Finance press conference on 2 January 2026, alongside the formal launch of the 11th Five-Year Development Plan (2026–2030) by Royal Decree No. 1/2026. The dual announcement marked a significant moment in Oman’s development trajectory, signalling the transition from a phase of economic recovery to one of growth and expansion.

The budget was prepared on a conservative oil price assumption of USD 60 per barrel — deliberately cautious given global market uncertainties — yet still projects a further narrowing of the deficit, reflecting the Sultanate’s sustained commitment to fiscal discipline. The Oman Investment Authority (OIA), Oman’s sovereign wealth fund with assets of approximately USD 54.6 billion, continues to serve as a key budget revenue contributor, having channelled more than USD 11.4 billion to the budget in recent years.

1.2 Revenue

Total revenues for 2026 are projected at OMR 11.447 billion, a 2.4% increase over 2025 approved revenues. Revenue sources break down across two main streams:

• Oil and gas revenues remain the primary source, though the share is declining as non-oil diversification efforts bear fruit. The 2026 budget targets non-oil revenues increasing to approximately 37.4% of total revenues by the end of the 11th Five-Year Plan.

• Non-oil revenues — including OIA dividends (approximately OMR 800 million annually), corporate taxes, fees, and returns from diversified economic activity — are growing steadily and form a central pillar of the Vision 2040 fiscal strategy.

In 2025, actual revenues exceeded budget projections, with total revenues reaching an estimated OMR 11.760 billion — a 5% increase on the budgeted figure, driven by a 10% increase in net oil revenues (OMR 6.403 billion) and modest growth in non-oil receipts. The 10th Five-Year Plan (2021–2025) generated OMR 11.291 billion in additional revenues above projections, of which OMR 4.767 billion was used for public debt reduction.

1.3 Expenditure

Total expenditure is projected at OMR 11.977 billion, up 1.5% from the 2025 approved budget. The expenditure structure for 2026 breaks down as follows:

• Current expenditure: 73.23% of total spending — covering public sector salaries, operational costs, and ongoing service delivery.

• Participation and other expenses: 15.91% — including transfers, subsidies, and sovereign contributions.

• Investment (development) expenditure: 10.85% — the capital budget for new infrastructure, schools, hospitals, and national projects, estimated at approximately OMR 1.3 billion.

Key sectoral expenditures include:

• Education (Ministry of Education): OMR 1.525 billion in 2026 — up from OMR 1.386 billion in 2020, reflecting sustained investment in human capital.

• Social protection: OMR 614 million, providing social security coverage to over 1.6 million citizens.

• Health sector: Continued investment in hospital and health centre construction (11 hospitals and 19 health centres and institutions approved during the 10th Five-Year Plan; 64 of 113 schools under development remain to be delivered in 2026–2027).

• Infrastructure and governorate development: OMR 983 million allocated to governorates through the end of 2025 (up from OMR 285 million in 2021), with development spending rising under the 11th Plan.

• Employment programmes: OMR 100 million annually under the 11th Plan, targeting procurement initiatives to reduce unemployment and create private-sector pathways.

1.4 Deficit and Debt Management

The 2026 deficit of OMR 530 million will be financed through domestic borrowing of OMR 902 million, external borrowing of OMR 990 million, and drawing OMR 400 million from reserves. Public debt is projected to reach OMR 14.6 billion (36% of GDP) — a manageable level by international standards and well below the debt-to-GDP ratios of many advanced economies.

The sustained reduction in Oman’s deficit from much higher levels earlier in the decade represents one of the most significant fiscal consolidation stories in the Gulf. The 10th Five-Year Plan’s windfall oil revenues were deliberately deployed for debt reduction (OMR 4.767 billion), materially strengthening Oman’s fiscal position ahead of the 11th Plan. The 2026 deficit of 1.3% of GDP is among the lowest in recent Omani history.

2. The 11th Five-Year Development Plan (2026–2030)

2.1 Framework and Objectives

Launched simultaneously with the 2026 budget by Royal Decree on 2 January 2026, the 11th Five-Year Development Plan is the second executive roadmap under Oman Vision 2040. It was prepared over two years (beginning July 2023) with unusually broad community participation — over 280 workshops and dialogue sessions involving 620 experts and specialists from government, the private sector, and civil society. The plan encompasses 190 strategic programmes across 12 national priorities, structured under four pillars: People and Society, Economy and Development, Sustainable Environment, and Governance and Institutional Performance.

The central macroeconomic target is 4% average annual real GDP growth through 2030, supported by OMR 15.6 billion (~USD 40.6 billion) in additional investments in key economic and social sectors. The plan also targets creation of 300,000 new jobs over five years — 10,000 per year in the government sector and 50,000 per year in the private sector.

2.2 Six National Development Drivers

The 11th Plan’s strategic objectives are organised around six national development drivers aligned with Vision 2040:

• Building a diversified and sustainable economy with balanced economic development across regions.

• Enhancing labour market efficiency and employment — developing an attractive domestic market for Omani national competencies.

• Promoting economic decentralisation across governorates — leveraging local competitive advantages and achieving balanced regional development.

• Transitioning to a low-carbon economy — implementing sustainable environmental policies and advancing toward Oman’s net-zero emissions target for 2050.

• Improving governance and institutional performance — enhancing efficiency, transparency, and service delivery across public institutions.

• Strengthening social development — maintaining and expanding the social protection system, healthcare, and education.

2.3 Priority Sectors for Growth

The plan identifies three sectors as the primary engines of non-oil economic diversification, with specific growth targets:

• Manufacturing industries: Targeted growth rate of 5.9% per annum — building on investments in petrochemicals, metals, silicon, polymers, green energy equipment, and advanced manufacturing at Sohar, Duqm, and Salalah industrial zones.

• Digital economy: Targeted growth of 10.8% per annum — the single fastest-growing target sector. Includes AI deployment, data centres, digital government services, smart cities, and technology exports.

• Tourism: Targeted growth of 5.7% per annum. Government has allocated OMR 20 billion (~USD 52 billion) to tourism under Vision 2040, targeting 11 million visitors annually by 2040. Near-term investments focus on integrated tourism complexes, heritage destinations, and adventure tourism infrastructure.

Supporting sectors include agriculture and forestry (4.2%), fisheries (5%), mining (6.2%), transport and logistics (7%), education (3%), and health (3.5%).

2.4 Fiscal Sustainability Framework

The 11th Plan adopts a financial sustainability approach aimed at:

• Maintaining public debt within safe levels throughout the plan period.

• Expanding non-oil revenue sources — targeting a non-oil revenue share of 37.4% of total revenues by 2030.

• Annual development spending of OMR 900 million and a further OMR 400 million for economic transformation projects.

• Average annual social protection spending of OMR 668 million.

• Flexible three-programme implementation mechanism allowing adaptation to evolving economic conditions.

3. Major Projects: Energy & Green Hydrogen

3.1 Renewable Power: Grid-Scale Build-Out

Oman’s power sector is undergoing rapid transformation. Clean energy’s share of the national grid reached approximately 9.46% in 2025 — generating 4.26 terawatt-hours of renewable electricity. The existing installed renewable base of approximately 1,550 MW comprises: Dhofar Wind I (50 MW), Ibri II Solar (500 MW), Manah I Solar (500 MW), and Manah II Solar (500 MW).

Looking ahead, the project pipeline is substantial. Ongoing and planned projects totalling approximately 7,300 MW are expected to lift total renewable installed capacity to approximately 8.8 GW by around 2030 — representing close to 30% of total generation capacity, broadly meeting Oman’s renewable energy target.

Projects currently under implementation (delivering by 2026–2027):

• Ibri III Solar PV: 500 MW in Al Dhahirah Governorate — under construction.

• Dhofar II Wind Farm: 125 MW in Dhofar Governorate — under construction.

• Jaalan Bani Bu Ali Wind IPP: 120 MW in Al Sharqiyah South Governorate — under construction.

• Duqm Wind Project (Wind 1 & Wind 2): 234 MW combined, 36 turbines — expected commercial operations in 2026. This is the largest wind farm currently being implemented in Oman.

• North Oman Solar Power Project: 128 MW — construction advancing.

• TotalEnergies / OQ Alternative Energy: 300 MW combined (North Solar 100 MW + Riyah-1 & Riyah-2 wind farms 100 MW each). Construction began early 2025; electricity production to begin late 2026. Will generate over 1.4 TWh annually.

Upcoming projects entering procurement in 2026 (by Nama Power and Water Procurement Company):

• Al Kamil I Solar IPP: 450–500 MW — requests for proposals being issued.

• Duqm III Wind IPP: 300 MW; Al Jazir Wind IPP: 100 MW; Shaleem Wind IPP: 100 MW — all three targeted for commercial operation Q2 2029.

• Four further solar IPPs (Al Kamil II, Dhofar Solar, Sinaw Solar, Adam Solar): Combined approximately 2,500 MW capacity — RFPs to be issued.

• Mahoot Wind I IPP: ~342–400 MW; Sadah Wind IPP: ~81–99 MW — under tender.

• First 24/7 Baseload Renewable Project: ~1,000 MW combining solar PV, wind, and Battery Energy Storage Systems (BESS), targeting a capacity factor exceeding 70%. This would position Oman among the world’s first providers of utility-scale baseload clean electricity.

• Two new Independent Water Projects (desalination): Dhofar Water 2030 IWP (80,000 m³/day in Raysut) and North Al Batinah IWP (150,000 m³/day) — procurement commencing 2026.

3.2 Green Hydrogen — A National Strategic Priority

Oman has positioned itself as one of the world’s most credible future exporters of green hydrogen and green ammonia, leveraging exceptional wind and solar resources in Duqm, Dhofar, and Al Jazir. The national hydrogen strategy targets 25 million tonnes per annum of green hydrogen production by 2050, supported by up to 180 GW of renewable energy capacity across approximately 50,000 km² of dedicated land blocks. Hydrom (Hydrogen Oman SPC), established under the Ministry of Energy and Minerals, manages land allocation through competitive auction rounds.

Key green hydrogen projects in development:

• HyPort Duqm (OQ / Uniper / DEME): 1.3 GW of renewable energy powering a 500 MW electrolyser; 60,000 tonnes/year of green hydrogen, yielding 330,000 tonnes/year of green ammonia for export. Phase 1 targeted for start-up in 2026. Located in the Special Economic Zone at Duqm (SEZAD).

• ACME Duqm Green Hydrogen Phase 2: 4.5 GW renewable energy powering electrolysers; approximately 900,000 tonnes/year of green ammonia, powered by 3 GW solar and 500 MW wind.

• POSCO–ENGIE Green Hydrogen: 5 GW installed renewable capacity (wind, solar + BESS). FID expected 2026; operations targeted 2030. Targeting export to Japan, South Korea, and the EU.

• Actis / Fortescue Project (Hydrom-awarded, April 2024): 4.5 GW of wind and solar; up to 200,000 metric tonnes/year of green hydrogen.

• BP Oman Green Hydrogen Project: Strategic Framework Agreement; 8,000 km² landscape; 3.5 GW renewable capacity; 150,000 KTPA of green hydrogen. In planning and design phase.

To support hydrogen export logistics, OTTCO (OQ Group subsidiary) and Royal Vopak have signed a strategic agreement to masterplan new energy storage and terminal infrastructure at Duqm’s Liquid Terminal — specifically for green ammonia export. The terminal’s first berth is targeted for early 2026, with full completion by mid-2027. Duqm’s location outside the Strait of Hormuz provides direct access to Indian Ocean shipping lanes and key hydrogen import markets in India, Japan, and South Korea.

Asyad Group — Oman’s national logistics conglomerate — is developing an AI-powered digital platform integrating logistics data across the national network, alongside smart warehouses and green-fuel bunkering corridors, specifically designed to support the logistics needs of the green hydrogen economy.

4. Major Projects: Transport & Logistics Infrastructure

4.1 Hafeet Rail — Oman–UAE Railway

The Hafeet Rail project is the most advanced large-scale transport infrastructure project currently under construction in Oman. A 238-kilometre freight and passenger railway linking Sohar Port (Oman) to the UAE rail network via Al Ain and Abu Dhabi, it is a joint venture between Etihad Rail (UAE), Oman Rail (Asyad Group), and Mubadala Investment Company. The total investment is approximately USD 3 billion.

• Construction progress exceeded 50% completion as reported at the Global Rail 2025 conference; work was reported at 40% in April 2026, with progress continuing at an ‘accelerated pace’ across Al Ain, Al Buraimi, Wadi Al Jizzi, and Sohar.

• Infrastructure includes two 2.5 km tunnels and 36 bridges across the 238 km route.

• The first shipment of railway tracks was received at Sohar Port’s General Cargo Terminal in August 2025 — a major construction milestone.

• Passenger trains will operate at speeds of up to 200 km/h, reducing Sohar–Abu Dhabi travel time to approximately 100 minutes and Sohar–Al Ain to 47 minutes.

• A strategic partnership with Abu Dhabi Airports was announced at Global Rail 2025 to create an air–rail intermodal corridor connecting Al Ain International Airport to the Hafeet Rail network.

Hafeet Rail forms Oman’s entry point into the broader USD 15 billion GCC Railway network, which will ultimately link all six Gulf states. Qatar’s Cabinet approved a draft agreement for GCC Railway integration in July 2025, with the network from Qatar expected to extend via the UAE to Muscat.

4.2 Oman National Railway — Long-Term Network

Beyond Hafeet Rail, Oman has a long-term plan for a 2,224-kilometre national railway network spanning the country — connecting Muscat, Sohar, Duqm, Salalah, and mineral resource areas. The network is designed for high-speed passenger trains (up to 350 km/h) and freight (80–120 km/h), double-tracked with standard 1,435 mm gauge, electrified throughout, with 46 stations, 8 marshalling yards, and 9 intermodal yards. The USD 15 billion project is funded by the government, Asyad, and the Asian Infrastructure Investment Bank.

• Phase 1 (242 km, Sohar to Muscat): Under development; links Sohar Port, Saham, Daqal, Al Khabourah, Barka, and Muscat.

• Phase 2 (486 km, Muscat to Duqm): Planned; links key industrial zones.

• Phase 3 (166 km, Sohar to Al Ain/UAE border): The Hafeet Rail segment currently under construction.

The national cargo strategy targets 780,000 tonnes of annual air freight by 2030 and 1.5 million tonnes by 2040, complemented by rail-port integration across Sohar, Duqm, and Salalah.

4.3 Ports: Duqm, Sohar, and Salalah

Oman’s three strategic ports are all undergoing expansion as the Sultanate cements its role as a global logistics hub:

• Port of Duqm (Special Economic Zone): The Asyad Container Terminal has commenced operations, and a masterplan for new energy logistics infrastructure (green ammonia storage and handling) is underway. Duqm is being developed as a hub for manufacturing, energy, and transit logistics, with 5,000 hectares of leasable industrial and logistics zones. The USD 6 billion Duqm Refinery — a 50:50 JV between Oman Oil Company and Abu Dhabi’s IPIC — entered operations in 2024, achieving 255,000 barrels/day by 2025.

• Sohar Port and Freezone: Strategic deep-sea port between Muscat and Dubai. Home to major industrial investments including a USD 1.35 billion metallurgical silicon plant (100,000 tonnes/year). Khazaen Dry Port — part of Asyad Group — is now recognised as a final customs destination for international containers, with the Safe Customs Corridor to Sohar Port launched, improving port-to-port logistics.

• Salalah Port: Expanding capacity for green hydrogen logistics (SalalaH2 project with OQ, Linde, and Dubai Transport Company under development). Salalah’s proximity to global shipping lanes enhances export access for southern Oman’s industrial output.

Oman boasts shipping times 30–40% faster than regional competitors and the GCC’s most efficient import-export processing system, according to Oxford Business Group (2025).

4.4 Khazaen Economic City

The 52 sq km Khazaen Economic City, a landmark public-private partnership, is designed as Oman’s premier logistics and industrial hub, integrating with the Batinah Expressway and Sohar Port. The city encompasses dry port facilities, warehousing, light and medium manufacturing, and logistics zones. With its official recognition as a customs destination and the launch of the Safe Customs Corridor in 2025, Khazaen has become a fully functional component of Oman’s national supply chain.

4.5 Road Infrastructure

Major road projects delivered and underway under the Vision 2040 framework include:

• 725-km Rub’ al-Khali (Empty Quarter) Road: Completed — connecting remote interior regions and supporting logistics and mineral extraction.

• 71-km Sultan Faisal bin Turki Road (Diba–Lima–Khasab): 48% complete as of June 2025 — connecting Musandam’s coastal communities.

• 27-km Rusa’il–Nizwa Road expansion: Completed.

• Muscat Metro: Preliminary studies, funding assessments, and system designs are underway, coordinated with the Greater Muscat Master Plan. No construction has yet commenced; the metro remains a future project under study.

5. Major Projects: Urban Development & Tourism

5.1 Yiti Sustainable City

The Sustainable City Yiti (TSC Yiti) is one of Oman’s flagship urban development and tourism projects — a 32 sq km waterfront city positioned along 16 km of Gulf of Oman coastline, located 45 minutes from Muscat Seeb Airport. Developed as part of Oman’s Integrated Tourism Complex (ITC) framework, it combines sustainable urban living, luxury hospitality, and tourism infrastructure with a focus on renewable energy and low-carbon construction. The project is among the largest active construction sites in Oman.

5.2 Al Khuwair Downtown — Muscat

The Al Khuwair Downtown project is one of the most ambitious urban developments underway in Oman, spanning approximately 3.6 million square metres in the heart of Muscat. The masterplan features:

• High-rise buildings ranging from 35 to 40 floors, with approved heights up to 150 metres — transforming Muscat’s skyline.

• An integrated marina, beaches, a waterfront with sports facilities, and a canal walkway.

• A dedicated cultural quarter and new ministry complex.

• Designed to accommodate approximately 64,500 people as Muscat grows from 1.5 million to a projected 2.7 million by 2040.

5.3 Muttrah Cable Car

A 3-kilometre cable car system in Muscat’s historic Muttrah district was expected to begin commercial operations in Q1 2026, offering panoramic views blending Oman’s coastline, mountains, and city — one of the most distinctive new tourism infrastructure projects in the Sultanate’s recent history. The project reflects Oman’s strategy to develop experiential, identity-driven tourism infrastructure.

5.4 Integrated Tourism Complexes (ITCs)

Oman has significantly expanded its ITC programme — zoned areas where foreign nationals may own property and short-term rental properties operate. At least three ITCs are active east of Muscat, with nine more currently under construction, including luxury resort developments at Yiti Beach and As Sifah. Additional complexes are under development in Al Sharqiyah and Musandam. Under the 11th Five-Year Plan, further ITCs are scheduled across additional governorates through 2026–2031, reflecting a deliberate strategy of geographic diversification of tourism investment.

5.5 Heritage, Culture & Adventure Tourism

The Ministry of Heritage and Tourism has identified 14 regional clusters across Oman for destination development. Five priority clusters received investment in the 10th Five-Year Plan (2021–2025): Musandam, the Frankincense Trail (Salalah), Muscat, Al Dakhiliyah (Nizwa), and Ash Sharqiyah South (Sur–Masirah). The 11th Plan extends this investment to additional governorates.

AlUla-style heritage tourism is an emerging parallel: Oman’s UNESCO World Heritage Sites — including the ancient aflaj irrigation systems, forts and castles, and the Frankincense Land of Dhofar — are the foundations for an internationally marketed cultural tourism offer. Tourism sector growth of 5.7% per annum is targeted through 2030, supported by the OMR 20 billion long-term Vision 2040 tourism investment programme.

6. Major Projects: Industry, Manufacturing & Mining

6.1 Duqm Refinery & Industrial Zone

The USD 6 billion Duqm Refinery (DRPIC — 50:50 JV between Oman Oil Company and Abu Dhabi’s IPIC) entered operations in 2024 and increased production capacity to 255,000 barrels per day in 2025. It is the centrepiece of the SEZAD industrial zone, which is designed as a fully integrated deep-water port, refinery, and industrial city. Oman is actively attracting manufacturers to SEZAD, with 5,000 hectares of leasable industrial and logistics zones.

6.2 Sohar Industrial Hub

Sohar Freezone continues to expand as one of the Gulf’s leading industrial locations, with active projects including:

• Metallurgical Silicon Plant (USD 1.35 billion): 100,000 tonnes/year annual capacity — commenced operations in 2025.

• Aluminium Wheel Plant: 1.2 million wheels/year annual capacity — first phase operational.

• Vanadium and Niobium Ingots Factory: Supplying alloy factories in the US and Europe.

• Polyacrylamide Polymer Production Factory: Expected to open in 2026 — second-largest polymer production plant of its type.

• Sohar Intaj Advanced Manufacturing (reverse engineering, mould manufacturing, precision tools): Plastic Technology Centre and Mould Manufacturing Centre operational.

6.3 Salalah Industrial Projects

The Salalah Ammonia Plant (365,000 metric tonnes/year) is already operational, supporting Oman’s position in global fertiliser and industrial chemicals markets. The SalalaH2 green hydrogen project (OQ, Linde, Dubai Transport Company) is in development, and Salalah’s port is expanding for green energy logistics.

6.4 Mining Sector

Oman’s mining sector is expanding under the 11th Five-Year Plan, targeting 6.2% annual growth:

• Shuwamiyah Industrial Minerals Project: Targeting 40 million tonnes/year of industrial minerals.

• In 2025, significant mining agreements were signed for copper and chromium extraction.

• Oman’s mineral wealth in copper, chromite, gold, and industrial minerals is being developed as part of the diversification agenda.

7. Social Sector Investments

7.1 Education

Education remains one of the largest single budget allocations (OMR 1.525 billion in 2026). Key 2026 investments include:

• Completion of 64 schools still under construction from 113 awarded during the 10th Five-Year Plan, to be delivered in 2026–2027.

• Continuation of the Noor e-learning platform (now serving 140 schools with interactive digital content).

• Expanded technical and vocational tracks across multiple governorates.

• Curriculum digitisation across all grades.

• Youth and entrepreneurship programmes as a dedicated strand of the 11th Plan (alongside ICT programmes).

7.2 Healthcare

The 10th Five-Year Plan approved construction of 11 hospitals and 19 health centres and institutions. Those under construction continue into 2026–2027. The 11th Plan targets 3.5% annual health sector growth, with a focus on:

• Hospital capacity expansion in underserved governorates.

• Expansion of primary health care networks.

• Health sector digitisation and telemedicine.

• Health tourism development as part of the broader tourism strategy.

7.3 Social Protection & Employment

The social protection system receives OMR 614 million in 2026, benefiting over 1.6 million citizens. The employment programme OMR 100 million annually under the 11th Plan targets procurement-based employment initiatives designed to reduce unemployment and promote job stability for Omani nationals. The national goal of 300,000 new jobs over 2026–2030 (60,000 per year) represents an ambitious but credible target given the investment pipeline across manufacturing, tourism, digital, and energy sectors.

8. Projects Summary

The table below summarises the most significant projects across Oman’s development pipeline:

Project / Initiative	Sector	Scale / Value	Status (Mid-2026)
Hafeet Rail (Sohar–Abu Dhabi)	Rail / Transport	USD 3 billion, 238 km	Construction 40%+ complete; tracks delivered 2025
Oman National Railway (9 phases)	Rail / Logistics	USD 15 billion, 2,224 km	Phase 1 (Sohar–Muscat) under development
Duqm Wind Project (Wind 1 & 2)	Renewable Energy	234 MW, 36 turbines	Commercial ops expected 2026
TotalEnergies/OQAE 300 MW	Renewable Energy	300 MW solar+wind	Construction underway; production late 2026
Ibri III Solar PV	Renewable Energy	500 MW	Under construction
Dhofar II Wind Farm	Renewable Energy	125 MW	Under construction
Jaalan Bani Bu Ali Wind IPP	Renewable Energy	120 MW	Under construction
Al Kamil I Solar IPP	Renewable Energy	450–500 MW	RFP procurement 2026
Duqm III Wind IPP + 2 others	Renewable Energy	500 MW combined	RFQ tenders 2026; SCOD Q2 2029
4 Solar IPPs (Al Kamil II etc)	Renewable Energy	~2,500 MW combined	RFPs to be issued 2026
1,000 MW Baseload RE Project	Renewable Energy	Solar+Wind+BESS	Procurement stage; world-first baseload RE
HyPort Duqm (OQ/Uniper/DEME)	Green Hydrogen	1.3 GW RE, 330k t/yr NH3	Phase 1 targeted start-up 2026
POSCO–ENGIE Green Hydrogen	Green Hydrogen	5 GW RE	FID expected 2026; ops 2030
BP Oman Green Hydrogen	Green Hydrogen	3.5 GW RE, 150k KTPA H2	Planning and design phase
Actis/Fortescue H2 Project	Green Hydrogen	4.5 GW RE, 200k t/yr H2	Hydrom-awarded April 2024
OTTCO/Vopak Duqm Terminal	Energy Logistics	Green ammonia export hub	Masterplan underway; berth 1 early 2026
Duqm Refinery (DRPIC)	Energy / Industry	USD 6 billion	Operational; 255,000 bpd in 2025
Yiti Sustainable City	Urban / Tourism	32 sq km waterfront city	Under active construction
Al Khuwair Downtown, Muscat	Urban Development	3.6 million sq m	Under development
Muttrah Cable Car	Tourism	3 km cable car	Expected commercial ops Q1 2026
Sohar Silicon Plant	Manufacturing	USD 1.35bn, 100k t/yr	Operational 2025
Polyacrylamide Polymer Factory	Manufacturing	Sohar Freezone	Expected opening 2026
Khazaen Economic City	Logistics / Industry	52 sq km	Operational; customs corridor active 2025
New School Construction	Education	64 schools (of 113)	Delivery 2026–2027
Hospitals & Health Centres	Healthcare	11 hospitals, 19 centres	Construction ongoing 2026

9. What This Means for Foreign Contractors and Suppliers

Oman occupies a distinctive position in the GCC procurement landscape. The Sultanate is smaller than Saudi Arabia or the UAE by absolute project value, more fiscally disciplined than its larger neighbours, and built around a long-established IPP/PPP framework that has been refined over more than two decades of utility procurement. For foreign contractors and suppliers, three structural realities shape the opportunity: Oman’s green hydrogen and renewables programme is the largest of its kind in the GCC and arguably the most credible globally; Duqm’s position outside the Strait of Hormuz makes it strategically distinct in regional logistics; and Oman’s In-Country Value (ICV) framework is unusually strict by Gulf standards, with non-compliance carrying real consequences. The sections below set out, sector by sector, where the foreign opportunity sits in 2026–2030 and how to approach it.

9.1 Green Hydrogen: The Defining Opportunity

Oman’s green hydrogen programme is the single most consequential foreign-contractor opportunity in the Sultanate over the next decade and one of the largest globally. The Hydrom auction framework has already awarded land blocks totalling 14 GW+ of planned renewable capacity to international consortia (BP, POSCO–ENGIE, ACME, Actis/Fortescue), and HyPort Duqm (OQ/Uniper/DEME, Phase 1 targeted for 2026) is the most advanced commercial project. The supply chain opportunity runs deep: electrolyser OEMs (Thyssenkrupp Nucera, John Cochrane, Plug Power, Nel Hydrogen, Topsoe, ITM Power), green ammonia process engineering (Haldor Topsoe, KBR, Casale, Saipem, Técnicas Reunidas), specialist storage and terminal contractors (the OTTCO–Vopak Duqm partnership demonstrates the structure), maritime ammonia transport, and the entire chain of EPC, instrumentation, control systems and certification advisory. Off-take and project-finance roles are similarly substantial. Foreign firms positioning around Oman’s hydrogen economy should be doing so in 2026, not waiting until 2028 when supply-chain positions will be largely fixed.

9.2 Renewable Energy IPPs: The Most Mature Pipeline in the GCC

Nama Power and Water Procurement Company (PWP) administers one of the most procedurally mature IPP/IWP frameworks in the GCC, and 2026–2027 represents an exceptionally dense procurement window. Live and near-term opportunities include Al Kamil I Solar (450–500 MW), four further solar IPPs at Al Kamil II, Dhofar, Sinaw and Adam (combined approximately 2,500 MW), Duqm III Wind, Al Jazir and Shaleem wind IPPs, Mahoot Wind I and Sadah, and the world-first 1,000 MW baseload renewables-plus-BESS project that will set a global technical benchmark. International IPP developers (ACWA Power, Masdar, Marubeni, Sumitomo, ENGIE, EDF Renewables, TotalEnergies, Sembcorp) have a clear procurement path through PWP. The EPC subcontracting pipeline supports gas-turbine and wind-turbine OEMs (Vestas, Goldwind, Mingyang for wind; Trina, JinkoSolar, Longi for solar panels at scale), BESS integrators (Tesla, Fluence, BYD, Wartsila), and the lender’s technical advisor and Owner’s Engineer market. The two new desalination IWPs (Dhofar Water 2030 and North Al Batinah) extend the water-sector procurement pipeline.

9.3 Rail and Cross-Border Transport

Hafeet Rail (the 238 km Sohar–Abu Dhabi line, USD 3 billion, joint venture between Etihad Rail, Oman Rail/Asyad and Mubadala) is at 40%+ completion as of mid-2026, with major civil works largely placed but rolling stock, signalling and systems integration still substantially open. International rail consultancies (Systra, AtkinsRéalis, Mott MacDonald, Egis, Arup), signalling specialists (Thales, Hitachi Rail, Wabtec), rolling-stock OEMs (Alstom, Siemens Mobility, CAF, CRRC, Hyundai Rotem), and station-architecture practices remain in active procurement. The broader Oman National Railway programme — nine phases, USD 15 billion, 2,224 km — sits on a longer horizon but represents one of the largest single-country rail programmes in the Gulf and merits early positioning. The deferred Muscat Metro programme should be tracked but not prioritised until preliminary studies move beyond feasibility.

9.4 Duqm: A Strategic Foreign-Investor Platform

The Special Economic Zone at Duqm (SEZAD) is the most internationally accessible major industrial platform in Oman. The operational USD 6 billion Duqm Refinery (DRPIC, 255,000 bpd), the OTTCO–Vopak ammonia terminal, the green hydrogen complex, and 5,000 hectares of leasable industrial and logistics land create a procurement pipeline for marine engineering (Boskalis, Van Oord, Jan De Nul), port equipment (Liebherr, Konecranes, Kalmar), industrial EPC contractors, tank-farm and terminal specialists, customs and logistics technology vendors, and specialist process engineers across petrochemicals, fertilisers and downstream manufacturing. Duqm’s location outside the Strait of Hormuz is a real strategic feature, not marketing language — UAE crude export diversification through Fujairah and Oman’s positioning at Duqm together represent a structural Gulf logistics shift that should inform foreign-supplier site selection.

9.5 Manufacturing, Mining and Industrial Investment

The 11th Five-Year Plan’s 5.9% manufacturing growth target, anchored by Sohar, Duqm, Salalah and Khazaen, supports a sustained pipeline of factory construction, automation, modular building systems, and specialist industrial EPC. The Sohar Metallurgical Silicon Plant (USD 1.35 billion, 100,000 tonnes/year, operational 2025) and the upcoming Polyacrylamide Polymer Factory demonstrate continuing inbound foreign industrial investment, each generating its own foreign procurement pipeline through construction, equipment supply, and operations support. The Shuwamiyah Industrial Minerals Project (40 million tonnes/year target) and the 6.2% mining sector growth target open opportunities for mining equipment OEMs (Caterpillar, Komatsu, Sandvik, Epiroc, Liebherr Mining), mineral processing specialists, and mining engineering consultancies (SRK, Wood, Worley, Hatch). Copper and chromium agreements signed in 2025 signal that mining investment is genuinely accelerating, not merely planned.

9.6 Tourism Development and Integrated Tourism Complexes

Oman’s OMR 20 billion tourism programme under Vision 2040 has a distinct positioning from Saudi giga-projects or UAE hospitality — it leans toward heritage, adventure and experiential tourism rooted in Oman’s genuine cultural and geographic assets. Yiti Sustainable City (32 sq km coastal city) and Al Khuwair Downtown (3.6 million sq m Muscat masterplan) are the flagship urban projects. The Integrated Tourism Complex framework, allowing foreign property ownership in zoned areas, has nine new ITCs under construction with further rollout through 2031. The opportunity profile favours international architectural practices, hospitality operators (Six Senses, Aman, Anantara, Mandarin Oriental, Banyan Tree have established Omani footprints), heritage-tourism specialists, theming and visitor-experience designers, and sustainability consultants. Adventure tourism infrastructure across Musandam, the Frankincense Trail, and Al Sharqiyah opens niche but defensible international opportunities in specialist tourism development.

9.7 Digital Economy and Data Infrastructure

The 11th Plan’s 10.8% digital-economy growth target is the highest of any priority sector and signals Oman’s intent to attract data centre investment, cloud infrastructure and AI workloads on the strength of competitive power costs, increasingly renewables-led generation, and Duqm submarine cable landing infrastructure. International data centre operators (Equinix, Digital Realty, NTT, EdgeConneX), hyperscale build specialists, liquid-cooling vendors, submarine-cable contractors (Alcatel Submarine Networks, SubCom, NEC), and digital-government platform vendors should anticipate continuing mandates. Asyad’s AI-powered logistics platform development creates a parallel pipeline for logistics technology and data integration vendors.

9.8 Healthcare and Education Infrastructure

The 64 schools still under construction from the 10th Plan and the 11 hospitals and 19 health centres committed under continuing budgets sustain steady demand for international school-design and hospital-design specialists, medical-equipment OEMs (Siemens Healthineers, Philips, GE HealthCare, Canon Medical), and EdTech vendors. Telemedicine and health-tourism initiatives under the 11th Plan are emerging opportunities for international health-system operating partners and digital-health platforms. Education construction and equipment opportunities remain steady rather than spectacular — reliable rather than transformational.

9.9 Financing, Legal and Advisory Services

Oman’s strengthened fiscal position, regular sovereign bond and sukuk issuance, and the deep PPP/IPP pipeline create continuing mandates for international bookrunners, project-finance arrangers, ECAs (particularly Japanese, Korean and European ECAs given the hydrogen partner mix), and top-tier international law firms with Muscat or Gulf-wide capabilities (Trowers & Hamlins, Bracewell, Dentons, Said Al Shahry / Curtis, ASAR, with regional benches at Clifford Chance, Linklaters, Allen & Overy). Hydrogen project structuring, off-take agreement negotiation, and the legal architecture for Hydrom auction rounds are particularly specialist mandate areas. Big Four accounting firms (EY, KPMG, PwC, Deloitte) all have mature Oman practices and are well-positioned around the corporate income tax, ICV compliance and ESG reporting demands now embedded in Omani procurement.

9.10 Sectors Where the Foreign Window Is Narrower

Several Omani procurement segments are now substantially served by domestic firms operating under ICV and Omanisation requirements. General building and civil construction, standard road and highway works, mainstream MEP, mid-tier consultancy and routine project management are dominated by Omani contractors (Galfar, CCC Oman, Al Adrak, Bahwan Engineering, Carillion Alawi successors) and well-established regional players. The Omanisation framework, applied progressively across sectors, also constrains pure-staff-augmentation business models in professional services — firms need a credible Omani employment and capability-transfer plan to win and retain government work. International firms entering these segments without a clearly differentiated technical capability or established ICV credit should expect thin margins and limited scale. The recent emphasis on local content in 11th Plan procurement makes ICV non-compliance a material commercial risk, not a paperwork formality.

9.11 Strategic Posture for 2026–2030

Three propositions hold for international firms approaching Oman over the next five years. First, the green hydrogen opportunity is genuinely the largest of its kind globally and is being structured in 2026; positioning later will mean accepting supply-chain roles that have already been claimed. Second, the IPP/IWP framework administered by Nama PWP and the IPP/IPC structures around Hydrom are the most procedurally clean entry routes in the Sultanate — foreign firms able to position within these structures will find the most predictable procurement path of any in the GCC, with the partial exception of Saudi PIF’s established processes. Third, ICV compliance and Omanisation are non-negotiable and accelerating; firms entering Oman without an explicit local-capability and Omani-employment strategy will lose work to competitors who have engineered ICV into their bids from the outset. Oman’s fiscal discipline, the operational maturity of its development institutions, and the structural depth of its energy-transition pipeline together make the Sultanate one of the most rewarding GCC markets for foreign firms that combine technical differentiation with serious local commitment.

10. Conclusion

Oman’s 2026 budget and 11th Five-Year Plan together represent a well-calibrated transition from recovery to growth. The fiscal story is largely positive: a deficit that has narrowed from crisis levels to just 1.3% of GDP, public debt maintained at manageable levels (36% of GDP), and a sovereign wealth fund contributing meaningfully and consistently to budget revenues. The government has also used windfall oil revenues wisely — channelling OMR 4.767 billion toward debt reduction over the 10th Plan period.

The project pipeline is arguably more exciting than the fiscal framework. Oman’s green hydrogen ambitions — backed by exceptional natural resources, strategic port infrastructure outside the Strait of Hormuz, and multiple global partnerships already in place — position it as one of the world’s most credible future green energy exporters. The Hafeet Rail, now more than 40% built, will transform Oman–UAE connectivity and connect Oman to the GCC Railway network. Duqm’s port, refinery, and special economic zone have already moved from concept to commercial reality.

The 11th Five-Year Plan’s targets — 4% annual GDP growth, 300,000 new jobs, and non-oil revenues reaching 37.4% of total receipts — are ambitious but grounded in actual investment commitments. The three priority sectors of manufacturing, digital economy, and tourism have demonstrable momentum. The renewable energy build-out is already delivering, with 1,550 MW of installed capacity in 2025 and a pipeline of 7,300 MW more under development.

For businesses, investors, and analysts watching the Gulf, Oman’s story is one of steady, deliberate transformation — less dramatic than Saudi Arabia’s giga-project spectacle, but arguably more financially disciplined and structurally coherent. The Sultanate is building on solid fiscal foundations toward a genuinely diversified economy, with the energy transition as its most important — and most promising — strategic bet.

Sources & References

All information in this report is drawn from publicly available, authoritative sources:

• Oman Ministry of Finance — fm.gov.om (2026 Budget announcement; 11th Five-Year Plan launch; Vision 2040 achievements report)

• Oman National Portal / National Platform — my.gov.om (State Budget official portal)

• Oman News Agency — omannews.gov.om (Vision 2040 five-year achievement report, November 2025)

• Zawya — zawya.com (2026 Budget details; Hafeet Rail progress; renewable energy procurement; Duqm logistics)

• Muscat Daily — muscatdaily.com (11th Five-Year Plan targets; Vision 2040 five-year review)

• Times of Oman — timesofoman.com (Vision 2040 five-year review; renewable energy expansion, March 2026)

• Gulf Business — gulfbusiness.com (2026 Budget: Education, Health & Jobs, January 2026)

• Arabian Business — arabianbusiness.com (11th Five-Year Plan USD 40bn investment, January 2026)

• Arab Gulf Business Intelligence (AGBI) — agbi.com (Oman-UAE rail network 40% complete, April 2026)

• Oxford Business Group — oxfordbusinessgroup.com (Transport infrastructure and logistics, Oman 2025 Report)

• Omanet — omanet.om (11th Five-Year Plan priorities; Asyad green hydrogen logistics; renewable energy analysis)

• Middle East Briefing — middleeastbriefing.com (11th Five-Year Plan manufacturing and tourism, January 2026)

• Blackridge Research — blackridgeresearch.com (Top 10 construction projects in Oman 2026; green hydrogen project tracker)

• PwC Middle East — pwc.com (Oman Budget 2025 analysis)

• Green Hydrogen Organisation — gh2.org (Oman hydrogen country profile)

• Smart Water Magazine — smartwatermagazine.com (Oman desalination procurement)

• Hydrogen Exchange — hydrogenexchange.io (Duqm hydrogen port terminal update, May 2025)

• Asyad Group — asyad.om (Hafeet Rail track delivery milestone, August 2025)

• NASDAQ / TotalEnergies — nasdaq.com (TotalEnergies / OQAE 300 MW renewable agreement)

• Oman Observer — omanobserver.om (Vision 2040: 100 projects in 5 years, November 2025)

This report is compiled from publicly available official and credible press sources as of May 2026. All figures are as reported at time of publication. Currency conversions are approximate (1 USD = approximately 0.385 OMR). This document may be freely reproduced with attribution.

Sources: Oman Ministry of Finance, Oman News Agency, Zawya, Muscat Daily, Times of Oman, Gulf Business, Arabian Business, AGBI, Oxford Business Group. Published May 2026.