A massive economic shift is coming to the southern region of Oman. Saudi Arabia has officially pledged $40 million to finance the development of the Thumrait Industrial City. This major deal between Riyadh and Muscat promises to transform the Dhofar governorate into a global logistics powerhouse. It marks a bold new chapter in the growing trade alliance between these two Gulf neighbors.
A Strategic Partnership for Growth
The agreement was signed during a high-profile ceremony that underscores the deepening ties between the two nations. The Saudi Fund for Development (SFD) is spearheading this financing initiative. Sultan bin Abdulrahman Al-Murshid, the CEO of the SFD, represented the Kingdom at the signing. He was joined by Sultan bin Salem Al-Habsi, the Omani Minister of Finance.
This deal is not just about transferring funds. It represents a shared vision for the future of the Gulf region. The Memorandum of Understanding (MoU) lays out a clear plan to build a modern industrial city from the ground up.
The ceremony was attended by key diplomats, including the Saudi Ambassador to Oman, Ibrahim bin Saad bin Bishan. Their presence highlights the diplomatic weight behind this economic move. Both nations are looking to diversify their economies away from oil, and this project fits perfectly into that strategy.
Why Thumrait Matters to the Region
The choice of Thumrait for this massive project is no accident. Located in the Dhofar Governorate, Thumrait sits at a strategic crossroads. It is close to the Port of Salalah, which is one of the busiest shipping hubs in the region. This proximity allows for easy export of goods produced in the new industrial city.
The development covers a massive area of nearly 4 million square meters. This space will host a variety of industries that are vital for Oman’s economic independence.
Key Sectors Targeted for Thumrait:
- Mining and Minerals: The region is rich in gypsum and limestone. The industrial city will process these raw materials for export.
- Food Processing: Focusing on fish and agricultural products from the fertile Dhofar region.
- Logistics and Warehousing: Serving as a storage hub for goods moving between East Africa and the Gulf.
- Construction Materials: Manufacturing cement and other building supplies to support local growth.
By focusing on these sectors, Oman aims to create thousands of jobs for its citizens. The Saudi funding ensures that the necessary groundwork is laid to attract private investors to these industries.
Inside the Infrastructure Plans
The $40 million investment is strictly allocated for essential infrastructure. You cannot build factories without roads, water, and power. This project addresses those needs directly. The plan includes a comprehensive network of roads to connect the industrial zone to main highways.
Project Breakdown:
| Component | Details |
|---|---|
| Total Area | 3.94 million square meters |
| Water Systems | Complete potable water network and distribution |
| Sanitation | Construction of two advanced wastewater treatment plants |
| Power | High-capacity electrical installations for heavy industry |
| Access | Internal road networks connecting to regional highways |
The agreement also covers engineering consultancy services. This ensures that the city is built to modern standards. The goal is to make the site “plug-and-play” for investors. When a company wants to build a factory, they will find the water, power, and roads already waiting for them.
This level of preparation is crucial. It lowers the cost of entry for businesses. It also speeds up the timeline from construction to actual production.
The Bigger Economic Picture
This project is part of a much larger trend of cooperation. The Saudi Fund for Development has a long history of supporting projects in Oman. Established in 1974, the SFD has been a key player in global development. They have financed over 800 projects worldwide with a total value exceeding $21 billion.
This specific deal aligns with “Oman Vision 2040” and Saudi Arabia’s “Vision 2030.” Both national plans call for economic diversification. By working together, both countries reduce competition and increase their collective bargaining power in the global market.
Economic Benefits for the Gulf Region:
- Supply Chain Security: Producing goods locally reduces reliance on imports from far away.
- Job Creation: The construction phase alone will employ thousands, followed by permanent industrial jobs.
- Cross-Border Trade: Better infrastructure facilitates smoother trade flows between Saudi Arabia and Oman.
Omani Minister of Finance Sultan bin Salem Al-Habsi noted that this MoU reflects Muscat’s strong desire to expand partnerships. The relationship has evolved from simple trade to joint investment in mega-projects. This integration makes the entire Arabian Peninsula more attractive to foreign investors.
The Thumrait Industrial City is expected to become a model for future industrial zones. It balances industrial needs with social development. The inclusion of administrative buildings and public facilities suggests a holistic approach. It is not just a place to work, but a developed zone that supports the local community.
The success of this project could pave the way for even larger joint ventures. As the infrastructure takes shape, we can expect to see an influx of private companies setting up operations in Dhofar. This $40 million is the seed money that could grow into a billion-dollar industrial ecosystem.
In summary, the agreement to develop Thumrait Industrial City is a landmark event. It combines Saudi financial strength with Omani strategic geography. The project will bring essential infrastructure to the Dhofar region, unlocking its potential as a logistics and mining hub. This collaboration serves as a blueprint for how neighboring countries can work together to achieve mutual prosperity and sustainable growth for their people.
