Overview
Oman’s renewable energy sector has emerged as one of the most significant investment opportunities in the GCC, driven by three converging factors: world-class solar irradiance and wind resources, the government’s strategic commitment to green hydrogen as Oman’s post-oil energy export, and the establishment of dedicated institutional frameworks including Hydrogen Oman (HYDROM) to coordinate large-scale project development. The renewable energy investment landscape spans utility-scale solar photovoltaic and concentrated solar power projects, onshore wind farms in the southern Dhofar region, and the flagship green hydrogen and ammonia projects that represent Oman’s most ambitious new industry creation effort under Vision 2040.
Key Facts
Oman receives approximately 2,500-3,000 hours of sunshine per year with global horizontal irradiance exceeding 2,000 kWh per square metre in the best locations — among the highest in the world. The Dhofar region also benefits from consistent monsoon winds suitable for onshore wind generation. The Oman Power and Water Procurement Company (OPWP) manages competitive procurement for utility-scale renewable energy projects through independent power producer (IPP) tenders. The green hydrogen pipeline exceeds USD 30 billion in announced projects, with HYDROM coordinating land allocation, licensing, and off-take development. Oman targets 30 percent of electricity from renewables by 2030 and a significant role as a green hydrogen exporter by 2040.
Regulatory Framework
Renewable energy projects operate under the Authority for Public Services Regulation (APSR) framework. IPP tenders are managed by OPWP through competitive processes with 15-25 year power purchase agreements denominated in USD-equivalent. Green hydrogen projects are coordinated by HYDROM, which allocates dedicated land blocks with solar and wind resource assessments. The Foreign Capital Investment Law permits 100 percent foreign ownership of renewable energy companies. Grid connection is managed by Oman Electricity Transmission Company (OETC). Environmental permitting requires coordination with the Environment Authority and applies to all large-scale energy projects.
Opportunities
Utility-scale solar IPP projects in the Ibri, Adam, and Manah regions offer competitive tariff environments with government-backed PPAs. The Hyport Duqm green hydrogen project (a joint venture between DEME and OQ) represents one of the most advanced large-scale green hydrogen developments in the Middle East. HYDROM’s ongoing allocation rounds for green hydrogen land blocks provide entry points for international energy companies and project developers. Distributed solar for industrial consumers offers growth potential as electricity prices rise. Wind energy in Dhofar remains underexploited relative to the resource quality.
Considerations
Green hydrogen economics remain uncertain globally — production costs at scale have not yet been demonstrated, and committed off-take agreements at viable prices are limited. Project development timelines for mega-scale green hydrogen facilities are measured in years, requiring patient capital. Water availability for electrolysis is a material constraint in Oman’s arid climate, potentially requiring desalination infrastructure additions. Grid infrastructure in the renewable-rich interior regions requires investment to evacuate large-scale solar and wind generation. Investors should model conservative ramp-up assumptions given the precedent of timeline slippage in first-of-a-kind energy projects.