A 21st Century Infrastructure

The growing skyline of the UAE.

Approximately 97 percent of the UAE’s electricity production is fueled by natural gas, with the remaining three percent produced by diesel generation and steam turbines. The Abu Dhabi Water and Electricity Authority is studying ways to incorporate renewable energy, especially solar panels, to help meet the rising demand for electricity.

Masdar, Abu Dhabi’s government-owned renewable energy development body, has ambitious plans for solar, biomass, wind, and other renewable energy projects. So does the Dubai Electricity and Water Authority, which has launched a pilot project using wind energy to supplement conventional energy sources. But because the UAE public is not charged market rates for energy consumption, policymakers in the UAE will need to make some challenging decisions – involving raised tariffs – if these alternative energy sources are to be available on a commercially viable basis.

Going to Waste

Less publicized than power and drinking water is the wastewater treatment and solid waste disposal sectors, expected to grow in tandem with the increased production of desalinated water and the solid waste generated by the increased numbers of UAE residents. The UAE is one of the three highest per capita producers of solid waste in the world, and billions will need to be spent by individual Municipalities and other local authorities if the UAE hopes to treat and dispose of the growing levels of waste. These sectors offer exceptional opportunities for U.S. engineering companies, equipment suppliers, and firms that offer groundbreaking technologies for treating wastewater and eliminating solid and municipal wastes.

From Housing to Health Care, From Energy to Education,
the UAE is Building

The UAE is in the midst of an infrastructure boom. Virtually every economic sector is undergoing rapid redevelopment and expansion as the country seeks to lay solid groundwork for future economic growth. The UAE accounts for most of the ongoing and planned infrastructure projects among the GCC countries, amounting to an estimated $300 billion in investments over the next five years, according to Dubai-based Khaleej Times.

Abu Dhabi alone will spend upwards of $200 billion over the next five years on infrastructure projects. Later this year, the Abu Dhabi Government plans to publish a comprehensive urban plan called “Plan Abu Dhabi 2030” that is designed to create a coherent and sustainable blueprint for the emirate’s development.

The infrastructure projects being planned in the UAE, many of which are still on the drawing board, offer tremendous opportunities to international companies and investors. And when completed, the “new UAE” will be even better positioned to fulfill its potential as one of the world’s most important commercial, logistics and leisure-time hubs.

Project Will Improve
Quality of Life

Many of the UAE’s most awe-inspiring infrastructure projects are discussed elsewhere in this Tradeline, but there are also less grandiose (and no less important) infrastructure projects that will, quite literally, change the face of the UAE. Some examples:

• Abu Dhabi is undertaking major new developments to improve its road network due to the exponential increase in traffic. (Between 2001 and 2006, the number of vehicles on the road in Abu Dhabi increased eight-fold.) In addition, Abu Dhabi will begin work on a Metrorail system that eventually will link up with Dubai Metro to create seamless travel between the two emirates.
• Work on the fully-automated, driverless Dubai Metro system began in 2006. When completed in 2010, the system will include two lines with a total of 47 stations. Ten of these stations will be underground, and two of them will be in the neighboring emirate of Sharjah.

• Sharjah recently completed the first phase of Emirates Industrial City, a 7.7 million square meter industrial park that will be able to accommodate 3,000 medium and light industries.
• The Government of Ajman has launched a $4 billion mixed-use development called Emirates City, which will include 72 residential and commercial towers.
• Umm Al Qaiwain is turning its marina into a vast master-planned waterfront community of villas and apartments.
• Ra’s al-Khaimah has started work on Mina al-Arab, a $2.7 billion beachfront development that will include 5-star hotels, two eco-tourism resorts, and 3,500 residential units.
• Two projects in the emirate of Fujairah – Fujairah Paradise and Fujairah Dana – will build hundreds of new villas, hotels, and shopping malls on a peninsula and group of small islands being reclaimed off the Fujairah coast.
• The Dubai Electricity and Water Authority (DEWA) plans to spend $5.45 billion by 2012 to expand power generation capacity by 6,000MW and desalinated water production by 800 million GPD to meet the growing demand created by Dubai’s steady growth.

Powering the UAE’s
Growing Economy

The demand for electricity in the UAE has been growing at double-digit rates for many years and will continue to do so, according to projections, until at least 2010. To meet this demand, the UAE must increase its electricity generation capacity by as much as 60 percent over the next three to five years. A number of major power projects are under development or on the drawing board, including the six-phase Jebel Ali Power and Desalination Plant, which will meet nearly 10 percent of the nation’s needs when completed in 2015.

The major players in the UAE’s electricity generation efforts are: Abu Dhabi Water and Electricity Authority, which currently accounts for 53 percent of capacity; Dubai Electricity and Water Authority (29 percent); Sharjah Electricity and Water Authority (11 percent); Federal Electricity and Water Authority (7 percent).