Abu Dhabi seeks private sector partnership to fund infrastructure projects worth $123 billion

The emirate is making it easier for private companies to invest and develop projects, says government official

Abu Dhabi’s economy has rebounded strongly from the coronavirus pandemic and maintained strong growth on the expansion of its non-oil sector. Bloomberg

Abu Dhabi will need private sector investment to develop Dh450 billion ($122.52 billion) worth of infrastructure projects in the next five to 10 years, a government official from the emirate said on Monday.

These projects include road networks, transport, schools and hospitals, "all of which the government can afford to develop by itself, but we are trying to say no, let's get the private sector [as] part of this development", Mohamed Al Shorafa, chairman of the Department of Municipalities and Transport, said at Abu Dhabi Finance Week.

The energy-rich emirate is making it easier for private companies to invest in and develop infrastructure projects, he added.

Mohamed Al Shorafa, chairman of Abu Dhabi Department of Economic Development. Khushnum Bhandari / The National

Executives and officials also highlighted the strong performance of Abu Dhabi's initial public offering (IPO) market, which reflects the emirate's economic growth prospects.

Florida-based investment firm GQG Partners, which manages assets worth $150 billion, has higher exposure to Abu Dhabi than China, the world's second-largest economy, its chairman and chief investment officer said during a panel session.

"It's actually a significant bet and as the breadth of the investment opportunity increases here ... you'll get more IPOs," Rajiv Jain said.

While it is a good sign that more companies are going public, the market needs more depth and liquidity, he said, adding that "fundamentals are very attractive but the world hasn't paid fully attention to it yet".

Abu Dhabi’s economy has rebounded strongly from the coronavirus pandemic and maintained strong growth on the expansion of its non-oil sector.

The emirate's economy grew by an annualised 4.1 per cent in the second quarter of this year on the back of boost from the non-oil sector, the latest data from the Statistics Centre Abu Dhabi show.

The value of Abu Dhabi’s economic output for the three months ending on June 30 reached a record Dh297 billion, the Statistics Centre said in October.

For the first six months of this year, Abu Dhabi's economy recorded a 3.7 per cent increase on an annual basis, with the non-oil sector expanding by 6.6 per cent in the second quarter, reaching a record Dh164.2 billion.

The non-oil sector's share of the emirate's economy rose to more than 55.2 per cent, its highest since late 2014.

Last week, Abu Dhabi also unveiled a range of programmes aimed at boosting its economic standing, pledging to empower businesses and encourage greater involvement as the UAE capital accelerates its future development.

The initiatives include the Abu Dhabi Chamber of Commerce and Industry's new strategic road map, “designed for the private sector by the private sector” that will support the growth of businesses in key sectors, as well as the announcement of the establishment of the Abu Dhabi Family Business Council to support one of the UAE's crucial entrepreneurial segments.

The emirate will also streamline business activities further with the introduction of the Abu Dhabi Registry Authority, designed to simplify processes and encourage more entrepreneurs to contribute to the economy.

The four initiatives are designed to “drive collective ambitions forward”, said Ahmed Al Zaabi, chairman of Abu Dhabi Department of Economic Development, at the inaugural Abu Dhabi Business Week last week.

Abu Dhabi’s property and aviation sectors are also performing strongly supporting the growth of the non-oil sector.

In the first half of the year, the emirate recorded 12,439 property transactions valued at Dh36.2 billion, with Dh23.7 billion worth of sales and purchase deals and Dh12.5 billion comprising mortgage transactions, according to the Abu Dhabi Real Estate Centre.

Abu Dhabi's property sector continues to perform strongly. Khushnum Bhandari / The National

In the third quarter, Abu Dhabi’s average apartment prices registered an annual increase of 9 per cent and average villa prices grew by more than 8 per cent, CBRE said in a recent report. Rents also rose, with 9 per cent for apartments and 4 per cent for villas on an annual basis.

More people continued to travel through Abu Dhabi's airports in a boost to the aviation sector.

Passenger traffic at Abu Dhabi's Zayed International Airport rose 33.8 per cent annually in the first half of 2024, exceeding expectations as it attracted new airlines and expanded its destination network.