UAE commits USD 30 bln of investment to Korean companies
upon President Yoon’s state visit;
Korea-UAE Summit Meeting to help strengthen cooperation
in investment and finance industries
Commitment by the UAE government to Korea is the largest size yet
in terms of investment cooperation with other countries;
Two countries to build a so-called “investment cooperation platform” for execution
On January 15th (local time), President Yoon Seok-Yul, on his state visit to the UAE, is engaging in an extended summit meeting with UAE President Mohammed bin Zayed Al Nahyan at the Presidential Palace in Abu Dhabi.
Upon President Yoon’s state visit to the United Arab Emirates (UAE), Korea and the UAE have pledged to strengthen cooperation in the investment and finance industries. The UAE government has committed to invest USD 30 bln in Korea, which is the largest size yet in terms of investment cooperation promised to other countries. On the 15th, the Korea Ministry of Economy and Finance revealed that at the summit meeting between President Yoon and UAE President Mohammed bin Zayed Al Nahyan, the UAE government announced that it would invest USD 30 bln in Korean companies in high-tech areas including energy, nuclear power, solar power and defense, mostly through its sovereign wealth fund, the Mubadala Development Company.
The Korea Ministry of Finance and Economy explained that this investment decision involved a tremendous amount that greatly exceeded the maximum investment cooperation amount the UAE had committed to other countries. Before this commitment, the largest commitment the UAE had made to another country was GBP 10 bln (about USD 12.2 bln) to Great Britain. This was followed by USD 5 bln to China, EUR 1.5 bln to France (USD 1.63 bln), and USD 1 bln to Russia.
The Ministry of Finance and Economy said that when the UAE government expressed to the Korean government its willingness to engage in large-scale investment cooperation, it emphasized that this was a “sign of trust in Korea.” The UAE’s investment of such scale is expected to contribute greatly to strengthening the global competitiveness of promising Korean companies and development of the Korean capital markets.
Notably, this investment decision will lead to a special strategic bilateral partnership, and is expected to contribute greatly to economic cooperation. The Korea Development Bank (KDB) and the Mubadala Development Company established an MOU for Strategic Investment Partnership (SIP) as part of the work to materialize the investment cooperation pledge. The SIP is a basic investment cooperation agreement established by the Mubadala Development Company for the purpose of joint investment with public financial institutions, including sovereign wealth funds of Russia, France, China, etc.
Through this, KDB and the Mubadala Development Company will search for joint investment opportunities within Korea, focusing on high-tech areas such as bioscience, and expand investment cooperation in a variety of ways such as sharing investment information and joint entry into third countries.
The Export-Import Bank of Korea also established an MOU for cooperation with TAQA, an Abu Dhabi-based national energy company and one of the key ordering entities in the Middle East to establish contracts with Korea for financial cooperation. TAQA owns Abu Dhabi’s hydropower assets, produces and supplies power and water, and conducts large-scale IGCC projects domestically/overseas. The Export-Import Bank of Korea plans to pursue a basic loan agreement (F/A) with TAQA for speedy financial support upon the attainment of project orders by Korean companies based on this MOU.
Upon the establishment of an F/A, the terms of financial assistance such as the major project ordering entities, scope of assistance, procedure, etc. are confirmed beforehand, so that speedy financial assistance is possible to the project ordering entity upon the occurrence of demand by Korean companies.
Going forward, we expect strengthened support for domestic companies for various infrastructure projects placed by TAQA, such as power generation, seawater desalination, transmission/distribution, etc.
The government plans to consult with the UAE government on plans to hold, in the first half of this year in Seoul, a Korea-UAE Joint Economic Committee, which is a regular, bilateral economic cooperation channel, the highest of its kind, in order to pursue and review the fruits of this Summit in an orderly manner.
The two companies have decided to pursue a so-called “Korea-UAE Investment Cooperation Platform” to duly pursue the investment agreement. The Ministry of Finance and Economy revealed that “Public investment institutions such as KDB, and private companies and investment institutions participate to share investment information between the UAE and private/public investment institutions, and support the establishment of a partnership.”
[Provided by Newsis]