The Ministry of Industry and Advanced Technology, Tawazun Industrial Park and the Emirates Development Bank are teaming up to provide new financing solutions to support the UAE's defence industry.
As part of the preliminary agreement signed at the International Defence Exhibition, MoIAT and the Tawazun Industrial Park will provide incentives to attract industrial investments to the park, as well as stimulate innovation and the adoption of advanced technology in the industry.
The Emirates Development Bank, on the other hand, will provide flexible and competitive financing solutions, such as green financing, financing capital expenditure, and financing start-ups and SMEs, MoIAT said in a statement on Tuesday.
The agreement "will help empower the industrial sector in line with MoIAT’s mission, and the objectives of Operation 300bn," said Omar Al Suwaidi, undersecretary of the MoIAT.
"This strategy aims to enhance the business environment that attracts local and international investors, especially to vital industrial sectors under the umbrella of Make it in the Emirates, the National ICV (In-Country Value) Programme, and the Technological Transformation Programme."
In 2021, the UAE launched the Operation 300bn strategy to increase the sector's contribution to the country's gross domestic product to Dh300 billion ($82 billion) by 2031, from Dh133 billion in 2021. The Arab world's second-largest economy is also encouraging companies to manufacture products locally as part of the Make it in the Emirates initiative.
"Our MoU (Memorandum of Understanding) will offer incentives packages that include competitive prices for land and facilities, as well as incentives to encourage exports from TIP," Mr Al Suwaidi said, while adding MoIAT has introduced initiatives such as the exemption of customs fees for industrial production inputs, "which saved industry nearly Dh4 billion in 2022”.
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"With defence being a priority sector under MoIAT’s Operation 300bn, we are pleased to announce that EDB will be looking to provide financing up to $100 million to further support the advancement of the industry," Ahmed Al Naqbi, the bank's chief executive said.
"Our mission is to foster a healthy and sustainable economy while also contributing to the country’s industrial advancement.
"We look forward to creating synergies with both entities and working closely with them to support the growth of these sectors while also upscaling the UAE’s local supply chain."
By 2030, the UAE plans to increase its domestic defence expenditure from 10 per cent to 30 per cent of its total defence expenditure, which represents an opportunity to substitute imports and promote supply chain localisation, the statement said.
