Abu Dhabi Investment Office set up to encourage foreign investment

Out-Law News | 26 Feb 2019 | 2:42 pm | 2 min. read

The president of Abu Dhabi has passed two new laws aimed at increasing foreign direct investment (FDI) into the emirate and regulating partnerships between the public and private sectors.

Law No. 1 of 2019 will establish an Abu Dhabi Investment Office (ADIO), which will be responsible for producing and executing a comprehensive FDI strategy and encouraging economic growth. Law No. 2 will regulate public-private partnerships (PPPs), a mechanism which the Abu Dhabi government anticipates will be used by the ADIO.

The ADIO is being created as part of 'Ghadan 21', a three-year economic development strategy announced last year by the president of Abu Dhabi, Sheikh Khalifa bin Zayed Al Nahyan. Ghadan 21 anticipates that the ADIO will be given various powers to accelerate economic growth in the emirate, such as PPP and targeted incentives for Abu Dhabi's priority growth sectors of technology, tourism and advanced manufacturing.

Elham Abdulghafoor Mohamed AlQasim, acting chief executive of ADIO, said: "Abu Dhabi offers local and international private sector actors a vibrant economy, stable political system and business friendly regulatory environment for investment."

"Our goal is to channel FDI towards priority sectors and enhance private sector participation in strategic projects where there are growing opportunities. We want to boost economic growth and competitiveness by executing an ambitious, targeted FDI strategy and driving partnership across the private and public sectors, where there are global precedents of private sector participation in priority public sector projects," he said.

ADIO will be expected to provide guidance to investors and promote Abu Dhabi as a world-class investment destination, according to WAM, the state news agency. It will implement its planned FDI strategy through a range of programmes including a new PPP 'Centre of Excellence', which will produce best practice guidance and develop public-private sector investment models aimed at both international and local investors.

The new PPP framework has been designed to encourage more FDI and enhance the private sector's participation in new technology projects, urban infrastructure; and education, healthcare, housing and transportation services, according to WAM. The ADIO will work with government and private sector partners to screen their proposed projects and assess their suitability for PPP investment models based on financial, technical and regulatory criteria.

The UAE passed a new FDI law in November 2018, laying the framework for up to 100% direct foreign investment in some UAE business sectors for the first time. The UAE captured 37% of all FDI into the Middle East and North Africa region in 2017, and the level of FDI into the UAE has increased from $64 billion to $130bn since 2010, according to WAM.

Projects expert Tim Armsby of Pinsent Masons, the law firm behind Out-Law.com, said that the issuance of the two new laws was a "welcome development", following the issuance of the Federal PPP Provisions and Procedure Manual last year.

"Abu Dhabi already has a long track record of successfully using project finance and PPP for the delivery of new assets, especially in the power and water sectors," he said.

"It is expected that the creation of ADIO and the PPP law will support the wider use of PPP for the development of non-utility infrastructure, which will create new opportunities for the private sector," he said.