Recent disruptions to global supply chains were a major factor in the UAE's decision to invest €40 billion ($46.47 billion) in Germany, said Dr Thani Al Zeyoudi, Minister of Foreign Trade.
The investment was announced on Thursday evening, during President Sheikh Mohamed's state visit to Germany.
The money will be invested across a range of sectors including industry, advanced technology, artificial intelligence, digital infrastructure and energy, with €10 billion of the investment to be used specifically in Bavaria.
“The relationship between the UAE and Germany is very strategic,” said Dr Al Zeyoudi. “We are talking about two complementary countries that can take each other forward.
“What has been happening around the world in recent years, and particularly in recent months, has disrupted supply chains, energy supplies and technological advancement. Technology is also disrupting the way conventional sectors operate.”
In the Middle East region alone, there have been repeated disruptions to commercial shipping in the Strait of Hormuz since the outbreak of the Iran war in late February, the reach of which has extended far beyond the GCC.
It is critical for the UAE to continue strengthening international partnerships, with Germany one of its most important economic partners in Europe, said Dr Al Zeyoudi.
“Germany is an economic powerhouse and an industrial hub, as well as a centre for talent and technology,” he said. “This comes at the right time, taking all these factors into consideration and ensuring that we move the relationship forward.”
Dr Al Zeyoudi said some of the projects covered by the agreements were close to implementation and their effects would be felt immediately, although others would require more time.
“You will see some of the results immediately,” he said. “Some of the projects are already about to be implemented.”
He identified energy, technology and logistics as the three most important areas for future investment.
“Energy comes first because it has historically been one of the main sectors in our bilateral relationship,” he said. “The second is technology and data centres, where there is huge potential, and the third is logistics.”
Mutual benefits
Dr Al Zeyoudi said Germany would benefit from the UAE’s position as a global logistics and trade hub, its investment capital and its access to markets in the Middle East, Asia and Africa.
The UAE, in turn, would gain from German industrial knowledge and technology.
“Germany will benefit from our logistics and trade capabilities, the capital we have and the market access we can provide to many German industries and businesses,” he said.
“We are elevating this relationship, doubling down on our historical investments in Germany and strengthening our trade relationship. At the same time, we are ensuring the right frameworks are in place for our businesses to move quickly.”
He said the investments should not be viewed as conventional financial transactions but as long-term partnerships between Emirati and German businesses.
“People will see more German technology being applied and used in the UAE,” he said. “We will bring more investment from our side into Germany and establish more partnerships.
“Some of the projects will be implemented using technology from Germany, and some operations will also be based on that technology, and vice versa. We do not see this as conventional investment. It is a partnership between both sides.”
High expectations
A new UAE-Germany Investment Council will be responsible for following up on the agreements and helping to ensure that major projects move from announcements to implementation.
“The council has to ensure there is a framework for following up on these projects and that the major projects are implemented,” Dr Al Zeyoudi said. “Some of its members are leading projects themselves on behalf of their institutions, so expectations of them are very high.”
Asked whether one side stood to benefit more than the other, he said the test of the partnership would be the value it created for people in both countries and across their respective regions.
“What matters is that it benefits people,” he said. “It does not matter if one party benefits in one area more than the other, as long as it takes the relationship to the next level and creates value for our people, their people and the people of our regions.”
Further details of the investment projects will be announced as feasibility work is completed, he said.
Major agreements
The co-operation between the UAE and Germany was highlighted by the announcement, in Germany, of a multibillion-dollar power plant with a capacity of 2.6 gigawatts to be built in Ajman as Etihad Water and Electricity seeks to meet growing demand across the Northern Emirates.
EtihadWE has signed an agreement with German firm Siemens Energy to reserve six turbines for the plant, which is expected to begin producing electricity in 2030. The turbines are scheduled to be delivered in 2029, Yousif Ahmed Al Ali, chief executive of EtihadWE, told The National.
“We are pleased to announce the signing of an agreement with Siemens to reserve turbines for our 2.6-gigawatt plant, which will be built in Ajman,” he said. “This is part of building our capacity to meet the continuing growth in the Northern Emirates and to strengthen the resilience of our electricity grid.”
The agreement was signed during President Sheikh Mohamed’s state visit to Germany, when the two countries announced a series of partnerships spanning energy, technology, investment and transport. “It will be one of the biggest plants in the world using this highly efficient technology,” he said.
German companies seeking new markets can use the UAE as a gateway to Africa and Asia as economic relations between the two countries enter a new phase, said Rashed Abdulkarim Al Blooshi, chief executive of ADGM’s Registration Authority.
“Companies from around the world that want to expand use the UAE as a hub,” said Mr Al Blooshi. “It gives them easy access to Africa and China, and the relationships make it more efficient for the company.
“You cannot forget the reputation that the UAE has. The root of our strategy is that we want to diversify our economy away from oil,” he said. “Industry and technology are among the strong pillars on which we depend. We are moving towards a technology-driven economy, so this relationship and this communication will result in bigger and more valuable investments.”
The UAE's investment in Germany will generate more than financial returns by helping to bring German technology and research expertise to the Emirates, said Fouad Fahmi Darwish, chief executive and managing director of Abu Dhabi-based sports training firm Palms Sports.
“These investments are not being made for one day or the next. They are being made for generations to come,” he said.
