Mubadala and RDIF consider joint investment in $2.8bn project in Russia

The agreement for a potential investment in a wood pulp plant is part of six deals the two companies have signed

ABU DHABI, UNITED ARAB EMIRATES - October 15, 2019: HH Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces (R) and HE Vladimir Putin VladShow more

Abu Dhabi's Mubadala Investment Company is exploring options for a potential joint investment with state-owned Russian Direct Investment Fund to build a new $2.8 billion (Dh10bn) pulp mill plant in northwest Russia.

Mubadala, Abu Dhabi's stategic investment firm, and RDIF are mulling the potential investment with Russia's top woodworking firm Sveze for the plant, Mubadala said in a statement on Wednesday. Based in Vologda, the project, with a design capacity output of more than 1.3 million tonnes of wood pulp annually, will focus on Russian and key European and Asian markets, the company said without giving the size of the proposed investment.

The Mubadala-RDIF collaboration goes back to 2013 when the two companies formed a $7bn co-investment platform. They have so far made more than 45 joint investments with an aggregate value in excess of $2bn. 

The agreement to explore the potential investment in the Russian wood pulp plant is one of the six pacts signed between Mubadala and the Russian sovereign wealth fund aimed at boosting cooperation in sectors including advanced technologies, artificial intelligence, healthcare, transport and logistics.

“The six collaboration agreements announced today demonstrate the strength of the multidimensional relationship that continues to flourish between RDIF and Mubadala as a symbol of the much deeper bond between our two nations,” Mubadala's group chief executive and managing director, Khaldoon Khalifa Al Mubarak, said.

The two entities are also considering a joint investment of $300 million into NefteTransService, one of Russia’s largest operators of railway rolling stock, through a consortium led by RDIF to expand its current facilities.

In the advanced technologies sector, RDIF and Mubadala have agreed to partner with the leading Russian face recognition technologies developer, NtechLab, to support the expansion of its business in the Middle East.

Mubadala and RDIF have also agreed to expand their investment in the Professional Logistics Technologies platform to build a multi-temperature distribution centre and related infrastructure in Moscow with a gross leasable area of over 100,000 square meters that will be leased to a leading food retailer, according to the statement.

The new deals, coinciding with the visit of Russian President Vladimir Putin to Abu Dhabi this week, also include boosting healthcare infrastructure in Russia as well as providing an opportunity for Russian patients to seek treatment and medical care by advanced clinics in the UAE.

The two entities will also cooperate in artificial intelligence and invest in key areas of Russia’s five-year strategic development plans.

“RDIF is dedicated to bringing these six cooperation agreements to fruition, by raising capital and through engaging the expertise of international partners such as Mubadala,” said Kirill Dmitriev, chief executive of RDIF.

Abu Dhabi National Oil Company (Adnoc) on Tuesday also awarded Lukoil a 5 per cent stake in the ultra-sour gas Ghasha concession, marking the first time a Russian energy company has participated in the emirate's upstream activities.

The Russian energy firm will pay Dh697.3m as a signing fee for the stake in a concession expected to produce up to 1.5 billion cubic feet per day of gas and 120,000 barrels per day of crude and high-value condensate by 2025.

Adnoc and Russia’s Gazprom Neft also agreed to explore opportunities for a partnership in production and exploration of sour gas, which commonly refers to gas with large volumes of sulphur, in Abu Dhabi.

The Emirates Nuclear Energy Corporation also signed an agreement with Russia's state-owned nuclear energy firm Rosatom to look at collaborations, which could include the setting up of a nuclear science centre in the UAE, plant development and investment and training for Emiraties, Enec said in a statement on Wednesday.