HSBC-backed MENA fund makes Oman power investment(4)

An HSBC-led consortium has completed the purchase of a stake in Omani power company United Power Company, committing capital from its $500m co-sponsored infrastructure fund. The $26.5m purchase is the second investment made by the fund since closing.

A $500 million private equity infrastructure fund managed by a consortium led by HSBC has made an equity investment into an Omani power company.

United Power: keeping
the lights on in Oman

According to a report by Reuters this morning, the MENA Infrastructure Fund, which is sponsored by HSBC Bank Middle East, Dubai International Capital subsidiary DICAM and Waha Capital, has agreed to pay $26.5 million for a 32.8 percent stake in United Power Company (UPC).

The investment sees the fund become the largest shareholder in the company, which owns a 270 megawatt power station in Manah, 180 kilometres southwest of the Omani capital Muscat.

It is the latest example of Middle East-based equity sponsors using the proceeds stemming from the oil price rally which started in 2002, to invest in domestic infrastructure projects, the report said.

The MENA Infrastructure Fund was established in 2006 to invest in utilities and transport related projects. The purchase of the UPC stake is the second made by the fund which started its investment program by buying a stake in the Alexandria International Container Terminals in Egypt last year.

The fund held a first closing of $300 million in September 2007.