As Oman and Saudi Arabia work to diversify their economies and reduce their reliance on oil revenues, public-private partnerships (PPPs) have emerged as a powerful tool for driving growth. By leveraging private sector capital and expertise, these partnerships are transforming infrastructure, healthcare, education, and more—while easing the financial burden on governments. In this blog, we’ll explore how PPPs are shaping the economic future of these two GCC nations.

1. What Are Public-Private Partnerships (PPPs)?

At their core, PPPs are collaborative agreements between government entities and private sector companies designed to finance, build, and manage public infrastructure projects. Unlike traditional government projects, PPPs distribute risks and costs between public and private partners, making them an attractive option for countries looking to modernize infrastructure without straining public finances.

2. Saudi Arabia: PPPs Powering Vision 2030

Saudi Arabia’s Vision 2030 is an ambitious blueprint for economic diversification and private sector growth. Central to this vision are PPPs, which are driving investments in healthcare, education, transportation, and renewable energy.

Key Initiatives:

• Healthcare: The government is expanding access to high-quality healthcare services by partnering with private providers—ensuring high standards without excessive public expenditure.

• Infrastructure: PPPs are accelerating the delivery of transport networks and smart city projects, providing innovative financing solutions that wouldn’t be possible through public funding alone.

• Renewable Energy: Projects like the Sakaka solar plant and upcoming wind energy initiatives are being developed through PPPs, supporting Saudi Arabia’s goal to generate 50% of its energy from renewables by 2030.

Challenges:

Despite their success, PPPs in Saudi Arabia face regulatory challenges, especially around the implementation of the Private Sector Participation (PSP) Law introduced in 2021. Clearer guidelines and streamlined processes could unlock even more investment potential.

3. Oman: PPPs as a Catalyst for Diversification

With limited oil reserves compared to its GCC neighbors, Oman has embraced PPPs as a cornerstone of its economic diversification strategy. As of early 2025, Oman has around USD 2 billion worth of PPP projects in various stages, focusing on utilities, healthcare, education, and infrastructure.

Key Initiatives:

• Utilities: Oman was a pioneer in independent power projects (IPPs) and independent water projects (IWPs) since 1994, setting a benchmark for PPPs in the region.

• Healthcare and Education: Through the Tanfeedh program, Oman aims to expand access to quality healthcare and modern educational facilities by sourcing 80% of project funding from the private sector.

• Infrastructure: Major projects in ports, roads, and public transport are being developed through PPPs to boost logistics and trade capabilities.

Challenges:

Oman’s PPPs face structural challenges, including a developing regulatory framework and the need for enhanced technical expertise within government institutions. Creating a more business-friendly environment with clear PPP laws and streamlined approval processes could significantly boost investor confidence.

4. Comparative Analysis: Saudi Arabia vs. Oman

5. Strategic Benefits of PPPs for Economic Growth

• Efficient Use of Resources: By leveraging private capital, PPPs allow governments to undertake large-scale projects without significantly impacting public budgets.

• Accelerated Development: PPPs streamline project delivery through innovative financing and efficient management.

• Enhanced Service Quality: With private sector expertise, PPPs can improve service standards in healthcare, education, and infrastructure.

• Risk Sharing: Risks associated with project delays, cost overruns, and demand fluctuations are shared between public and private partners, reducing the burden on the government.

Insight for Investors:

For businesses exploring opportunities in the GCC, partnering in PPPs offers a stable, long-term investment with the backing of government support and guaranteed revenue streams.

6. Challenges and the Way Forward

Regulatory Hurdles:

Both Saudi Arabia and Oman need to streamline regulatory processes for PPPs. Clear guidelines, faster approvals, and standardized contracts could attract more private investments.

Political and Economic Risks:

Geopolitical tensions and fluctuations in oil prices pose risks to long-term planning for PPPs. Diversifying sectors and geographic focus can help mitigate these risks.

Building Institutional Capacity:

Strengthening government institutions with technical expertise and PPP-specific training is crucial to managing these partnerships effectively.

Conclusion: A New Era of Growth through PPPs

Public-private partnerships are playing an increasingly vital role in driving economic growth and diversification in Oman and Saudi Arabia. By channeling private investment into infrastructure, healthcare, education, and renewable energy, these countries are laying the groundwork for a sustainable, diversified economy.

Looking to explore PPP investment opportunities in Oman and Saudi Arabia?

Connect with Lion Muscat Services (LMS) for expert advisory and partnership solutions to help you maximize your investments.