UAE Dominates GCC Investments in Africa, Port Infrastructure & Renewables a Key Focus Area

The UAE is competing with Saudi Arabia, Qatar, and China via its infrastructure and energy investments for strategic influence in Africa and better trade access.

By Melissa Cyrill

The United Arab Emirates (UAE) is the fourth largest investor in Africa over the last decade, following China, the European Union (EU), and the United States (US). UAE investments in Africa are primarily directed towards the high-growth sectors of infrastructure, energy, transport, and logistics and has likely crossed US$60 billion in the period since 2012.

The UAE is competing with Saudi Arabia, Qatar, and China for strategic influence in Africa and better trade access. The most obvious route for the Emirates has been via infrastructure investments.

Target sectors

According to FDI Markets, the combined foreign direct investment (FDI) of the top five Gulf Cooperation Council (GCC) states in Africa amounted to US$101.9 billion between 2012 to 2022. The top five beneficiaries of these FDI inflows are Egypt, Morocco, Algeria, Nigeria, and South Africa. Egypt alone received about 68 percent of the total FDI.

Data from FDI Markets ranks the sectors based on the number of investments from the GCC states from 2012 to 2022, which show the financial services sector leading at 149 deals, followed by transportation and warehousing at 84, environmental technology at 64, ICT and electronics at 49, and construction at 47.

Among these, the UAE has emerged as the largest contributor of the GCC states with investments totaling US$59.4 billion, followed by Saudi Arabia at US$25.6 billion, Qatar at US$7.2 billion, Kuwait at US$5 billion, and Bahrain at US$4.2 billion, per the 2023/24 Africa Horizons report from Knight Frank, the London-based property consultancy.

Referring to the most recent data released by the UAE’s Ministry of Foreign Trade, the Knight Frank report indicates that “the total trade volume between the UAE and six non-Arab African countries—Angola, Kenya, Nigeria, Ethiopia, South Africa, and Tanzania—exceeded US$8 billion in 2020.”

Further, in 2021, the UAE invested in 71 projects valued at US$5.6 billion, with the most notable being The Agtech Park in Egypt, “where UAE’s Abu Dhabi Fund for Development (ADFD) supported the establishment of an agricultural technology park to enhance Egypt’s agricultural productivity and promote innovation in the sector.”

In the area of renewables, public and private UAE companies, including Infinity Power, AMEA Power, and Masdar, the UAE’s foremost green energy firm, have inked numerous agreements across Africa. These agreements entail the construction of solar, wind, hydrogen, and battery storage projects.

Masdar, which is partially owned by the UAE’s sovereign wealth fund Mubadala, entered into agreements with the governments of Angola, Uganda, and Zambia last year to develop a combined 5GW of clean energy projects. Under the agreements, Masdar plans to develop renewable energy projects totaling 2GW in Angola, 1GW in Uganda, and collaborate on solar, wind, and hydroelectric projects amounting to 2GW in Zambia. These agreements were signed as part of the ‘Etihad 7’, a UAE-supported global development fund aiming to provide clean energy to 100 million people across Africa by 2035.

Towards this, in December 2023, Masdar announced plans to develop a major 150 megawatt (MW) solar PV project in the Quipungo region, Hulia province, southern Angola to deliver renewable energy to 90,000 homes.

Prior to that, in March 2023, Masdar along with German project developer Conjuncta and Infinity signed an MoU with Mauritania for a US$34 billion green hydrogen project in the West African country.

In July 2023, the UAE signed a mining deal with DR Congo to establish a joint venture to extract Tantalum, Tungsten, and Tin, which are critical raw materials used in the manufacture of green technology.

Africa has what it takes to become the world’s renewable energy powerhouse. At COP28 and beyond, we will continue to work with Africa for Africa. The UAE stands shoulder-to-shoulder with our friends in Africa as we strive to secure a just energy transition at this COP of action and COP for all. We are delighted to be moving forward with plans to build this solar power plant in Angola that will bring vital clean energy and jobs to communities. We look forward to developing this strong partnership with Angola as we work together to maximize the country’s huge clean energy potential. – HE Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Chairman of Masdar and COP28 President

In the logistics and connectivity infrastructure sector, UAE state-owned companies operate ports across Africa. In late 2022, plans were finalized between Khartoum (Sudan’s capital) and an Emirati consortium to build the Abu Amama port and economic zone on the Red Sea at an investment of US$6 billion. Abu Dhabi is keen to establish its presence in the region given Sudan’s logistics gateway and resource profile.

In the realm of energy, state-owned oil and gas Emirati enterprises ADNOC and ENOC are building petroleum receiving and storage infrastructure across Africa. This investment aims to support the Emirati market’s growth in refined products, which are its major exports to key African trade partners like Ethiopia, Kenya, Tanzania, and South Africa.

Spotlight: UAE investments in African ports

The UAE aims to be the central node of connectivity between Asia, Africa, and Europe. This is supported by the fact that over the last 10 years, DP World has invested over US$1.8 billion in Africa and plans to invest a further US$ 3 billion in coming years. Dubai, for one, wants its Jebel Ali port to function as a super hub linking Asia and Africa.

Emirati logistics and infrastructure firms, like Dubai Ports World and Abu Dhabi Ports, are expanding their presence across Africa and investing in free trade zones along with conventional maritime and transport infrastructure via a string of ports strategy – to foster their foothold in the region.

DP World and AD Ports Groups currently operate 12 port facilities in Africa.

• Some of DP World port and logistics investments include Dakar, Ndayane, (Senegal), Djazair (Algeria), Sokhna (Egypt), Berbera (capital of the Sahil region of Somaliland), Bosaso (Somalia), Banana (Democratic Republic of Congo), Luanda (Angola), Maputo (Mozambique), Komatipoort (South Africa)
• Some of AD Ports Group port operations include Pointe-Noire (Republic of Congo), Kamsar (Guinea, West Africa), Safaga, Hurghada, and Sharm El Sheikh ports (Egypt)

DP World

The Emirati royal family-owned Dubai Ports World (DP World) initiated its investments in the Horn of Africa region over 20 years ago, beginning with the management of the Port of Djibouti and the construction of additional terminals, while also contributing to the development of roads and infrastructure. The Port of Djibouti serves as the primary gateway for 95 percent of Ethiopia’s imports.

Subsequently, DP World expanded its investments in port operations across various African countries including Angola, Egypt, Morocco, Mozambique, Senegal, and, controversially in 2016, secured a 30-year concession to operate a port in the breakaway region of Somaliland, leading to tensions with Somalia’s government, which preferred direct engagement with Mogadishu.

Despite this, DP World went forward with a US$366 million port expansion project in the semi-autonomous Puntland region of Somalia and initiated the construction of a US$1.2 billion deep-sea port in the Democratic Republic of the Congo, with an expected completion date of 2025.

In 2021, Africa represented 10 percent of DP World’s revenue through major port operations in seven African markets. In 2022, DP World acquired the South Africa based Imperial Logistics, which offers logistical support across 26 African and European countries.

In October 2022, a US$250-million-deal was reached between the Government of Tanzania and DP World to upgrade and exclusively operate major parts of the Port of Dar es Salaam for a period of 30 years. DP World stated that its investments into the port’s facilities alongside hinterland logistics projects would likely touch US$1 billion during this 30-year concession agreement.  Under the deal, DP World has partnered with the Tanzania Ports Authority (TPA) and existing stakeholders at the Dar es Salaam port to enhance cargo clearing speed and cargo planning, aiming to boost efficiency. This initiative aims to attract more shipping lines and larger vessels, potentially reducing ocean freight costs for Tanzanian importers and exporters. DP World plans investments in temperature-controlled storage to support Tanzania’s agriculture, along with improved connections to rail-linked logistics networks. Additionally, there are plans to establish a special economic zone.

Beyond ports, DP World has also invested in the new Road Transport Centre for delivery trucks in Kigali, Rwanda, according to Knight Frank’s 2024 report. This project has reduced waiting times for land transport from weeks to days and lowered storage costs and has helped make Kigali a prominent logistics hub in East Africa, facilitating connections with regional businesses and global markets.

AD Ports

In 2022, Emirati royal family-owned Abu Dhabi Ports (AD Ports) made its inaugural international acquisition by acquiring a controlling stake in Egypt’s Transmar Shipping and Transcargo International Company (TCI). The deal sought to propel AD Ports as a market leader in port operations in the North Africa and the Red Sea region.

• Transmar operates as a regional container shipping company covering the Middle East, Red Sea, Arabian Gulf, and eastern coast of Africa. Its routes cover key ports, such as Adabiya and Sokhna in Egypt, Jeddah, Jubail, and Dammam in Saudi Arabia, Aqaba in Jordan, Port Sudan in Sudan, Djibouti, Khalifa Port, and Jebel Ali in the UAE. The company specializes in handling petrochemical products, crucial for trade along these routes.
• TCI specializes in terminal operations and stevedoring services. It focuses on project cargo handling, heavy lift, breakbulk, industrial breakbulk, general cargo, and container handling, along with warehousing and storage facilities. TCI stands out as the largest operator and sole container operator in Adabiya Port, playing a significant role in handling and stevedoring services in the Egyptian Red Sea region.

In August 2022, AD Ports Group signed an MoU with Adani Ports and SEZ Ltd, India’s largest integrated ports and logistics company. This partnership aims to strategically invest in end-to-end logistics infrastructure and solutions in Tanzania, including rail, maritime services, port operations, digital services, industrial zones, and maritime academies.

In June 2023, AD Ports Group signed a 30-year concession agreement with the Government of the Republic of the Congo for managing and operating the country’s multipurpose New East Mole Terminal in Pointe-Noire.

In January this year, AD Ports Group signed an initial 15-year concession agreement with the Red Sea Port Authority (RSPA). The agreement grants AD Ports the operation and management rights for three cruise terminals at Safaga, Hurghada, and Sharm El Sheikh ports. Additionally, it includes plans for renovating the Sharm El Sheikh terminal, aiming to elevate the cruise tourism experience in Egypt. A final concession agreement is anticipated to be finalized in the first quarter of 2024, pending regulatory approvals.

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