ANALYSIS: UAE’s new PPP mandate will ‘create virtuous circle of investment’

Experts have welcomed the country’s commitment to an ‘advanced mechanism’ for PPPs and predicted it will focus on process digitisation

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The UAE’s bold positioning of PPP process reformation as a key pillar of its 'We the UAE 2031' vision has been welcomed by regional experts. 

Under the banner 'The Future Phase of Regulating Public-Private Partnerships', the ministry aims to create an “advanced mechanism” for organising PPPs, and “improve government services and finance the projects and implement them in an optimal way”.

Joe Hepworth, CEO and co-founder of Dubai-based business setup and trade advisory company British Centres for Business, tells Partnerships Bulletin: “PPP is a very broad church and covers lots of different methods - and interpretations - of how the public and private sectors work together.”

Hepworth says that the UAE’s new initiative to “standardise" what PPP means in the UAE and delineate how it is delivered and managed is “very welcome”.

“I don’t think, thus far, there has been a common understanding and approach in the UAE,” he adds.

Joss Dare, projects and energy transition partner at global law firm Ashurst says the mandate could potentially create an uptick in PPP projects in the UAE.

"A solid PPP pipeline, in turn, will help to develop a good precedent bank of successfully executed projects that will boost investor confidence in the UAE market creating a virtuous circle of investment opportunity and investor appetite,” he explains.

“The most important factor for any PPP programme - especially an emerging one - is dealflow. A jurisdiction that keeps up a good throughput of well-structured projects with sensible risk allocations and industry standard processes and documentation will attract investment.”

Digitisation and transparency

Dare expects to see the PPP mandate geared towards the digitisation and transparency of the supply chain.

He notes that the overarching agenda of the UAE 2031 vision is to implement and develop state-of-the-art technology and digital infrastructure to shape the country towards a more accomplished and developed future.

“In a post-Covid economy, the need for digital infrastructure and flexible means of doing business is key to ensure longevity and to diversify economic risk in the UAE,” Dare continues.

He sees a clear direction by the UAE authorities to make the regional marketplace more “advanced, effective and flexible” to attract foreign investment.

Raghu Mandagolathur, CEO of Marmore (an asset management company that is a subsidiary of the Kuwait Financial Centre, or Markaz) agrees that the Ministry of Finance’s advanced mechanism is expected to guide the economy’s progress towards digitalisation and increase transparency of PPP projects data.

“This would pave the wave for optimal partnerships between the public and private sector and improve overall efficiency in service delivery,” Mandagolathur says.

Hepworth also suggests that the UAE’s updated PPP mechanisms would be enhanced to leverage all aspects of international private partnerships. 

“The UAE government knows that the private sector is not merely the source of welcome capital, but also good ideas, innovation and efficiency… this initiative looks to be a way of making sure these are captured and incorporated into the public sector too, in a clear and transparent way.”.

Paul Crowe, chief investment officer at Plenary Group, also welcomes the development: “We are heartened by the UAE government’s willingness to encourage increased public and private sector collaboration in order to achieve quality, long-term community benefit via their public infrastructure programme.”

Crowe says the UAE is fast becoming a leading hub for PPPs in the region. “We are pleased to have an established presence and to be heavily involved, working alongside such willing government partners and local and international private sector partners.”

The UAE anticipates that the PPP programme will be completed in December 2025.

Its four other transformational projects under the UAE 2031 umbrella are: Promising Future in the Supply Strategy of the Federal Government; Enhancing Competitiveness and Transparency in Data Related to Climate and Environment Spending Data; Imposing a Federal Tax on Corporations and Businesses; and developing an e-billing system.