SIGNING OF FINANCING AGREEMENTS FOR KHAZAEN FRUIT AND VEGETABLE CENTRAL MARKET IN KHAZAEN ECONOMIC CITY
Relocating the fruit and vegetable wholesale and storage activities from Al Mawaleh Central Market to Khazaen Economic City is an important milestone towards a better performance and higher quality operations in the vegetable and fruit sector and the provision of integrated logistics solutions.
Khazaen new market is a state-of-the-art marketing and logistics platform designed to attract investors and companies operating in the fruits and vegetables sector.
Construction of the new market, being a cornerstone and enabler for Khazaen Food City, is expected to begin in Q1 2022.
As part of the efforts focused on relocating the fruit and vegetable storage and wholesale activities from Al-Mawaleh Central Market in the Wilayat of Seeb to Khazaen Central Market in Khazaen Economic City in the Wilayat of Barka, the project finacing agreements were signed, and its financial closure was completed. The first agreement concerned the shareholders’ capital subscription while the second was the bank financing agreement with Sohar Islamic Bank signed under the patronage of His Excellency Eng. Essam bin Saud Al Zadjali, Chairman of Muscat Municipality, and in the presence of a host of local dignitaries, government officials and representatives of private agencies and companies engaged in the import and trade of fruit and vegetables in Al-Mawaleh Fruit and Vegetable Central Market. The agreements were signed in pursuance of the royal directives that called on the private sector and businessmen to invest in local opportunities in all sectors to boost Oman’s position as an attractive and leading investment destination.
The first agreement was concluded to complete the equity subscription with Oman Infrastructure Fund (Rakiza), Salim & Partners LLC, Al Kalbani Group and Khazaen Development and Investment Company, as shareholding partners in Khazaen Fruit and Vegetable Central Market SAOC, which will fund, develop and manage the new market in Khazaen Economic City.
The bank financing agreement was signed between Sohar Islamic Bank and Khazaen Fruit and Vegetable Central Market SAOC to provide financing facilities for the new market project.
Commenting on the signing of the two agreements, Eng. Kalat Al Bulooshi, Board Chairman of Khazaen Economic City, said, “The signing of both agreements marks the completion of the project capital subscription and total financing amounting to about forty million Omani riyals (40,000,000 OMR), which will be allocated to the development, establishment and operation of the Khazaen Central Market. We are happy with this strategic partnership with major partners from the private sector, and we highly value and appreciate the trust of the government, represented by the Muscat Municipality, and its support in enabling the private sector to play its part in the development of quality and national projects that contribute significantly to achieving food security and an economic revenue for the country. The project proves to be relevant to the main pillars of Oman Vision 2040 as to its empowerment of the private sector to be a major driver of the national economy. As soon as we signed the agreement with Muscat Municipality to relocate the fruit and vegetable warehousing and wholesale activities from Al-Mawaleh Fruit and Vegetable Central Market to Khazaen Fruit and Vegetable Central Market in May 2021, we immediately proceeded to the appointment of a consultant to prepare the engineering drawings and tender documents for the construction works. In November 2021, local companies were invited to participate in the construction works tender and as per the project’s timeline, the implementation tender will be awarded in the first quarter of this year”.
Engineer Kalat Al Bulooshi affirmed that “the main objective of relocating the fruit and vegetable warehousing and wholesale activities to the new market is to improve the performance and quality of work in the fruit and vegetables sector and to provide new modern and advanced integrated logistics facilities including air-conditioned wholesale and retail market and the centralized cold and dry storage of various fruit and vegetable products to serve growing consumer demand for fresh fruits and vegetables in the Sultante of Oman, which is increasing at more than 10% p.a. The new market will serve as a marketing and logistics platform that attracts investors and local, regional and international companies operating in the fruit and vegetable sector. The new central market is one of the main components of Khazaen Food City, which contributes to strengthening Oman’s food security system in line with the national strategy for food security”.
"This financial closure confirms the significant role of the private sector investment companies in creating opportunities, studying their economic feasibility and structuring them as investment products that attract investors and businessmen, and endeavoring to complete the capital subscription and provide bank financing to develop and operate these projects" he added.
For his part, Muneer Al-Muneeri, CEO of the Oman Infrastructure Fund (Rakiza), said, “We are pleased to announce the signing of an agreement to acquire a stake in Khazaen Fruit and Vegetabel Central Market with a group of private sector companies and variety of industries that are in line with the objectives of Oman’s Vision 2040 and the promotion of economic growth in the Sultanate of Oman.
” He also explained that the benefits of this investment are not limited to monetary returns only, but also contribute to building an integrated national logistics platform that meets the requirements and needs of stakeholders in the local market by developing the much needed social infrastructure at the national level and providing the appropriate facilities with the best standards. Khazaen Fruit and Vegetabel Central Market is a national logistics hub for receiving agricultural products (imported and local), trading and redistributing them to all governorates of the Sultanate of Oman, which represents the strategic objectives of the Fund.”
Al-Muneeri added that Rakiza is the first infrastructure investment fund in the Sultanate of Oman, and its main objectives are to invest in infrastructure assets in the areas of renewable energy, water, telecommunications, oil and gas, logistics and environmental projects.
Mr. Abdul Wahed Al-Murshidi, Head of the Islamic Banking Group in Sohar International, stated: “We are pleased to sign the bank financing agreement and provide financial facilities to Khazaen Fruit and Vegetable Central Market Company, as this is one of the national development projects that the Bank is keen to contribute to due to its economic return. Moreover, the project serves the Bank’s strategic objectives in financing vital sectors such as the food sector. The new Khazaen market will play a prominent role in enhancing food security and the flow of local and foreign investments in the fruit and vegetable sector and manufacturing industries that depend on fruits and vegetables as an in-country value. As far as we are concerned, we look forward to more partnerships in future projects to be developed in Khazaen”.
The new fruit and vegetable market in Khazaen Economic City consists of high-quality logistics facilities and services, such as air-conditioned wholesale market and trading floor, the cold storage facilities, truck sales area, onion and potato sorting and selling sheds, dry warehouses, agricultural products reception building, forklift operation station, ten gates for customs inspection and plant quarantine, administration offices for the companies working in the market, agriculture samples examination laboratory under the supervision of the Ministry of Agriculture, Fisheries and Water Resources, seven gates for entry of trucks, in addition to public services that include banking services, truck parking, and a mosque. The market will also include retail outlets to cover the incoming demand from the surrounding areas of the city.
The new market area is significantly larger than the area of the current market in the Wilayat of Seeb and can be extended in the future to cater for the expected growth. In addition to the market connection to a 100,000 square meters truck rest area, its location on the Expresssway in proximity to Suwaiq and Sohar ports, and Khazaen land port, is one of its success factors. The market will be a nucleus for the establishment of an integrated city for food industries that includes the manufacturing, packaging and preservation of foodstuffs. The new market will also contribute to attracting international companies specialized in food supply chains, which will enhance Oman’s position as a regional and international foodstuffs manufacture and distribution hub, by leveraging Oman’s strategic location and robust logistics structure, in Oman, in general, and Khazaen Economic City, in particular.
Khazaen is one of the largest public-private partnership project in the Sultanate of Oman. It is the latest integrated economic city being developed in the Wilayat of Barka in the Governorate of South Al Batinah. The city is strategically located near the capital, Muscat, and is part of Greater Muscat, according to the urban strategy approved by the Ministry of Housing and Urban Planning. It is about 30 minutes away from Muscat International Airport, and almost two hours from Sohar Port. In the future, the city will be linked through its land port by the railway to the city of Sohar to facilitate the transportation of goods from Sohar port to Khazaen land port directly.
In addition to the central fruit and vegetable market, the Economic City hosts Oman’s latest land port, which was opened in December 2021, and includes areas designated for small and medium industries and logistics services. The city will also accomodate multi-space housing units that meet all demands, recreational facilities, retail outlets, international schools, and modern health care centers - which will contribute to creating communities that meet all living and recreational needs of the residents of this promising economic city.
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