Libya provides attractive options for UAE companies

UAE businesses prepare to stake a claim in Libya's economic recovery as stalled projects are restarted and new deals are rolled out.

Etihad Airway launched its new service to the Tripoli on Tuesday with a business delegation on board the inaugural flight. Etihad Airways / Ray Stubblebine / Reuters

UAE businesses are positioning themselves to stake a claim in the rebuilding of Libya's economy as stalled projects are restarted and fresh deals start to roll out.

Business leaders hope to use the UAE's fledgling friendship with Libya's interim government as a springboard to investment in a range of projects including ports and natural resources.

"Right now our target is to play an important part in the rebuilding," said Anwar Gargash, the Minister of State for Foreign Affairs. "Our target is to create viable long-term partnerships with our Libyan friends."

A 100-member business delegation headed by Mr Gargash travelled to Tripoli on Tuesday on board Etihad Airways' new service to the Libyan capital. Their mission was to meet potential local partners and identify opportunities for investment.

The visit comes as Libya emerges from the conflict that ended four decades of Muammar Qaddafi's rule. Rebuilding the country is likely to require multibillion-dollar spending, with the money coming from Libya's oil earnings and foreign investors to develop infrastructure and create jobs.

If UAE companies are eager to jump in, Libya is also ready to embrace much-needed foreign expertise.

It has already received delegations of businessmen from France, the UK, Turkey and other countries quick to recognise the interim leadership.

But because the UAE is another oil-based economy under transformation, its know-how is especially prized, say businessmen.

"The UAE has experience and has done a wonderful job in developing its economy over the last 30 years and we can learn from that," said a Libyan businessman who met the delegation, declining to be named.

Investment from the Emirates could more than double from US$2 billion (Dh7.34bn) to $5bn within five years, said Abdul Aziz Al Ghurair, the owner of Al Ghurair Group.

But whether that investment materialises is likely to hinge on a successful political transition in Libya and decisions about the investment climate.

"If they sort out their issues, you will see a lot of Emirates companies coming in here," he said. "If it turns out to be a very slow process, UAE companies will go somewhere else."

In addition, Libya requires, as does the UAE, that most foreign companies take local partners to be able to do business in the country - a rule that may put off some potential investors.

In the meantime, however, UAE companies are scouting the lie of the land.

Mr Al Ghurair's conglomerate, based in Dubai, hopes to restart output within months on a joint venture in Libya's largest refinery, Ras Lanuf, and to double the capacity over four years. Production was stopped during the civil war last year, and the restart date had been pushed back by Al Ghurair and the Libyan National Oil Corporation, the other partner.

"Once we have the expansion plan, we should be doing 400,000 barrels a day," Mr Al Ghurair said.

The group is also assessing openings across sectors including contracting, civil and mechanical engineering, and food production.

DP World has held early-stage talks with Libya's interim government as officials consider international partnerships to manage the country's ports. The Dubai ports operator already has a presence in more than 60 terminals around the world including in Libya's neighbour Egypt.

"We have always been interested in Libya and we are continuing our discussions with them," said Sultan Ahmed bin Sulayem, the chairman of DP World.

Advisers working for Mohamed Alabbar, a Dubai businessman and a partner in Africa Middle East Resources (Amer), an emerging commodities supply chain company, have also been assessing the viability of mining bauxite and other natural resources in Libya.

Amer has previously signed deals to mine metals including gold and bauxite in several other African countries.

Meanwhile, an increase in flights between the UAE and Libya is likely to help accelerate commercial ties.

"Flights are arteries for business and exchanges," said Mr Gargash. "We look forward to many more flights from our side and the Libyan side."