Projects worth Dh25 billion ($6.81 billion) will be built using public and private money under plans announced by Dubai's government on Sunday.
Sheikh Maktoum bin Mohammed, Deputy Ruler, Deputy Prime Minister and Minister of Finance, attended the first Dubai International Public-Private Partnerships Conference organised by the Department of Finance, under the umbrella of Expo 2020 Dubai.
Abdelrahman Al Saleh, director general of Dubai's Department of Finance, announced a portfolio of joint projects including seven urban development projects worth Dh22.58bn, 14 road and transport projects worth Dh2.39bn and eight projects in health and safety worth Dh526m.
Details of each project are expected to be set out at a later date.
The event has brought together decision makers, government officials, and leading thinkers from the UAE and abroad.
Public-private partnerships were described as key to attracting investment for development in the UAE's Projects of the 50, some of which were announced last month.
The Emirates hopes to attract Dh550bn of inward foreign direct investment to the UAE over the next nine years through this style of joint project, and will host the Emirates Investment Summit next spring to bring potential investors into the fold.
Funding model for the future
Speaking at the conference, Saeed Al Tayer, managing director and chief executive of Dubai Electricity and Water Authority (Dewa), said his department had already attracted investment of around Dh40bn using the Independent Power and Water Producer model in a number of its power projects.
This style of partnership involves a private entity owning and operating a facility that generates power and produces usable treated water, before selling it back to Dewa and/or directly to end-consumers.
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Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, inaugurates the second phase of the Mohammed bin Rashid Al Maktoum solar park in Dubai. Pawan Singh / The National -
The second phase of the park is producing electricity with enough capacity to power 50,000 homes in Dubai. Pawan Singh / The National -
It is also producing electricity at the world’s cheapest rate for an operating solar plant at 5.84 US cents per kilowatt hour (kWh). Pawan Singh / The National -
The second phase, inaugurated in the presence of Sheikh Mohammed Bin Rashid, Vice President and Ruler of Dubai, spans 4.5 square kilometres with 2.3 million solar panels, provided by First Solar. Pawan Singh / The National -
Work has begun on the third phase of the solar park and a tender for the fourth phase is expected in June. Pawan Singh / The National -
The third phase will have enough capacity to power about 200,000 homes and is expected to be completed in three years. Pawan Singh / The National -
“Phase 3 is under construction and will be delivered in 2020,” says Saeed Al Tayer, the managing director and chief executive of Dewa. WAM -
Mr Al Tayer said the solar park’s independent power producer model reduces the risks for Dewa, which is committed to meeting Dubai’s clean energy targets. Photo courtesy WAM -
“The cost of phase 2 was US$326 million, but our investment was only $26m, with a 51 per cent holding,” Mr Al Tayer said. “I think it is beneficial to our partner with an internal rate of return of between 8 and 10 per cent.” Photo courtesy WAM
“The public-private partnerships are critically important in meeting the challenge of sustainable development,” said Mr Al Tayer, who highlighted the Mohammed bin Rashid Al Maktoum Solar Park, which was built using the Independent Power Producer model of public-private investment.
Solar energy is now cheaper in Dubai than anywhere else in the world, which Mr Al Tayer suggested was thanks to the IPP model.
Adopting the principle of achieving fair gains for both parties of the partnership was also highlighted.
Dewa continues to seek investment for green energy projects, said Mr Al Tayer.
“We are exploring new and innovative financing mechanisms to encourage and enhance spending on sustainable infrastructure,” he said.
