Solar desalination plant lined up in Ras Al Khaimah

Ras Al Khaimah plans to build the world's largest solar-powered seawater desalination plant to put an end to water subsidies in the emirate.

It is the brainchild of Utico Middle East, the GCC’s largest private full service utility and solutions provider and once live in 2015, the plant will generate 22 million gallons of potable water a day and provide 20 megawatts (MW) of solar power.

The current record holder is in Saudi Arabia, where the Al Khafji plant aims to generate 10 million gallons of water a day and 10MW of power once it is completed in 2015.

“The GCC has an abundance of sunshine throughout the year and our aim will be to harness this free energy and channel it to UAE residents at extremely low cost,” said Richard Menezes, the executive vice chairman at Utico Middle East. “We believe that this will be the least costly solution for water. The average price per cubic metre of water at the moment is US$1.8. We can retail at $0.75 per cubic metre of water which cuts off subsidies completely.”

Earlier this month, Utico released the pre-qualification tender inviting bids for the independent water plant, which will be co-developed by Utico and the winning bidder.

Utico is currently building a coal power plant in RAK worth $408 million. The company is working with Shanghai Electric to generate 270MW of clean coal power once the project is completed in 2015.

"The new solar-powered desalination plant will complement the clean coal power plant project we announced last year," Mr Menezes said. "The two plants will together generate power and water while reducing CO2 emissions by more than 1 million tonnes CO2 per year. This is in line with the vision of His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, who has been the driving force behind environment-friendly ventures such as Masdar."

In 2011, the UAE desalinated 1.7 billion cubic metres of seawater, equivalent to 700,000 Olympic-sized swimming pools. The demand for power and water in the Emirates is growing at a rate of 10 per cent per year.

Jebel Ali's Dh10 billion M Station operated by Dubai Electricity and Water Authority (Dewa) is the country's largest desalination plant. It produces 530 million litres of water a day in the 2060MW gas-fired facility.

thamid@thenational.ae

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”