Emirates Development Bank, the state-owned lender that provides financing for the UAE's priority sectors, is on track to achieve its Dh30 billion ($8.2 billion) five-year funding target and has a robust pipeline of domestic companies and foreign investors seeking funding, according to chief executive Ahmed Al Naqbi.
“There are many companies that do not exist here and are coming from abroad to set up,” Mr Al Naqbi told The National on the sidelines of the second Make it in the Emirates forum in Abu Dhabi on Wednesday.
“That for us is a very positive indicator and a sign that the ecosystem is really coming together to attract investment [from abroad] to set up manufacturing base in the country.”
The amount of loans approved for investors seeking to launch industrial ventures in the UAE could be worth a lot more by the end of this year, he said.
“So their equity is what they will bring to the table” and EDB will help them with the rest of their financing requirements, he added.
Some of these companies are also setting up their base in the UAE for exports, which solidifies the UAE’s status as industrial export hub, Mr Al Naqbi said.
EDB currently provides direct and indirect financing to UAE companies and projects across its five priority sectors – manufacturing, renewables, advanced technology, food security and health care.
It has set aside Dh30 billion for direct and indirect lending to more than 13,500 companies in those sectors by May 2025, when its current five-year plan ends.
EDB aims to approve loans worth Dh6 billion or more in this year, to at least match the Dh6.1 billion of financing last year, Mr Al Naqbi told The National in March.
The financing approved last year marked an increase of nearly eight times on an annual basis.
On Wednesday, EDB also announced financing deals worth Dh424 million at the second Make it in the Emirates forum in Abu Dhabi.
The Make it in the Emirates initiative encourages local and international investors to manufacture and export products from the UAE. The first forum in June last year produced Dh110 billion worth of potential procurement agreements covering 300 products across 11 sectors.
EDB completed financing deals worth Dh3 billion to support and enable the inaugural event in 2022.
The latest deals include setting up a new steel complex in Kezad, Abu Dhabi, for manufacturing rolled steel, a factory to produce recycled kraft paper to meet demand for sustainable paper packaging converters, and a herbal medicines and supplements manufacturing facility in Dubai, EDB said in a statement.
The bank's current pipeline of small and small and medium-sized enterprises that operate in EDB’s priority sectors consists hundreds of companies, Mr Al Naqbi said, declining to give the aggregate value of potential deals.
EDB provided loans to about 180 companies last year, with the bulk of funding going to small enterprises, including 50 to 70 in the “micro” businesses category.
While Dh1.8 billion in loans was approved for small and medium enterprises last year, the funding approved for large corporates rose to Dh4.3 billion.
Data centres, desalination plants, transport, hospitals, manufacturers and specialised logistics were among entities financed by EDB, as part of the UAE’s efforts to support the “national priority sectors with large projects in key areas”.
The current five-year plan is “not set in stone and is really based on the direction of the federal government and what we want to do as a country”, Mr Al Naqbi said.
The UAE unveiled its industrial strategy Operation 300bn in 2021, to increase the industrial sector’s contribution to gross domestic product to Dh300 billion by 2031, from Dh133 billion in 2021.
The industrial sector’s contribution to the national economy rose to Dh182 billion, while the value of the UAE’s industrial exports rose to Dh175 billion last year, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and Cop28 President-designate, said on Wednesday.