Sustainable finance drives progress and value in Oman

Oman

Tariq Al Farsi, CEO of National Finance Company, talks to The Energy Year about how the institution has integrated sustainable finance into its long-term strategy and the types of sustainable projects it is financing in Oman. National Finance Company provides a wide array of financing products to retail, corporate and SME clients.

How has National Finance integrated sustainable finance into its long-term strategy?
We began taking sustainable finance seriously around three years ago. Our belief is that the green economy represents the future. Studies show that green-economy initiatives can generate more wealth than oil and gas, which is a compelling reason to act. We have embedded sustainable finance into our five-year strategy. It is no longer optional; it is a core mandate and part of our operational ethos.
We intend to continue building a robust sustainable finance portfolio aligned with national sustainability goals. As the largest FLC [finance and leasing company] in Oman, we have based our sustainable finance strategy on three main initiatives: Green Finance Enabler, Advocate and Capacity Builder and Digital & AI-Driven Sustainability Goals.
We have designed green finance products to open new avenues of financing while encouraging their use with preferential interest rates. A lending budget with set targets helps us proactively promote sustainable financing. We have also embarked on a journey to build awareness both internally and externally, with the aim of seeing our staff become future champions of sustainable finance.

What kinds of green projects are you prioritising in Oman?
We have supported projects from recycled paper bags to electric vehicles, solar energy and other clean energy ventures. Hydrogen is a promising area, although it is still in the early stages and will require a strong legal and structural framework in order for us to participate in its financing.
Initially, hydrogen loans are likely to be syndicated among multiple banks due to their size and risk profile. For now, our focus remains on small and medium-sized projects where we can have a clear impact and effectively assess financial feasibility.

What role should financial institutions play in Oman’s green transition?
Financial institutions must lead by example, with private-sector leadership supported by government policies. A state-level framework such as Oman Vision 2040 certainly accelerates this transition. The private sector plays a crucial role in raising awareness, as is evident through the growing momentum. Many businesses have begun to adopt sustainable practices driven by a firm conviction in the value and long-term benefits of sustainability.
We view sustainable finance as vital to our identity; it is part of our DNA. It also makes business sense. All the green projects we have financed so far have been successful, with no negative financial impact, which stands as testament to the robustness and foresight of our commitment to sustainable finance.

What is the significance of the USD 120-million finance you secured from the International Finance Corporation (IFC)?
Securing this financial agreement with the IFC was a major milestone for us. It validates our strategy, strengthens our credibility with shareholders and stakeholders, and reaffirms the importance of having sustainable funds.
The IFC only funds projects that meet high environmental and sustainability standards. Their endorsement confirms National Finance’s commitment to international expectations for sustainable and responsible lending.

What is the weight of sustainable finance in your portfolio, and what are your priorities moving forward?
We are working to expand our sustainable finance portfolio by supporting projects that align with green and socially responsible objectives. Our plans are focused on enhancing our capacity to identify and finance eligible sustainable opportunities as the ecosystem continues to evolve.
We recognise that the availability of bankable green projects is key, and we are closely engaged with our partners, including banks and FLCs, to stay ahead of emerging opportunities. Our approach emphasises agility and long-term commitment, ensuring that sustainable finance becomes a core pillar of our overall growth strategy.

How are you fostering sustainable finance awareness within your team and in the market?
Our team is enthusiastic about sustainable finance. Oman has fostered awareness for years, even if action only recently accelerated. Social media and global reporting have made green economy concepts more accessible.
Financing sustainable ventures resonates with our employees’ values and aligns with our goal of safe and responsible finance. We place strong emphasis on capacity building within our organisation by conducting regular, targeted skill development workshops. These initiatives ensure our team is uniquely equipped to support our sustainable finance efforts and deliver expert advisory services to our clients.
Additionally, our staff is trained to assess sustainable financing applications, enabling them to identify and support projects that are genuinely impactful and aligned with our sustainability goals.

What differentiates National Finance from banks in terms of risk appetite and project engagement?
We see banks as partners, and we believe that we all operate as part of an ecosystem; therefore, we complement each other. We often fund riskier segments that banks may avoid. While maintaining rigorous risk criteria, we are willing to finance segments that require a bolder stance. We also access funding from banks through our funding lines. For banks, this partnership creates a win-win situation: they provide us with financing lines, and we use our expertise to reach segments they may not serve directly, expanding financial inclusion in Oman.

Do you have plans to expand regionally or participate in syndicated finance beyond Oman?
It is our aim to continue growing strategically, in a way that broadens our reach to customers and gives us access to projects that align with our values and long-term vision. However, any expansion will be preceded by thorough due diligence, and we will adapt our approach to local market conditions while maintaining Omani values and governance standards.

What role does National Finance play in supporting SMEs and economic diversification under Oman Vision 2040?
We structure our services to align with Oman Vision 2040. Our divisions include retail and SME, and we have customised financing solutions to cater to the different needs of each client. Our financing solutions encompass a range of financing products and services designed to support environmentally sustainable projects and initiatives.
These solutions aim to channel capital towards activities that promote a low-carbon, sustainable and inclusive economy, which could include investments in renewable energy, sustainable infrastructure and other projects with positive environmental impacts.
We apply rigorous ethical standards to our financing. We support SMEs not simply because they are local, but because they offer meaningful economic impact. With more than a 49% market share, we see ourselves as a leading enabler of Oman’s diversification.

What are your long-term goals for National Finance?
Our main target is to become the first choice for borrowers and the most attractive employer in the sector. Our key focus areas include digital transformation, fintech integration and AI-driven financial services.
While we embrace growth, we also remain cautious. Our future rests on responsible lending, robust governance and embracing innovation to remain a leader in Oman and beyond.

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