BMI View: Improved - and more rigorously enforce - water management plans, and the reduction of leakage and wastage, will help the UAE to overcome its water shortages. Moreover, the potential increase in tariffs will also discourage wastage and, we feel, result in more conservative consumption by both domestic and commercial users.
The announcement earlier this quarter of a USD1mn prize for the development of solar powered desalination solutions for water scarcity highlights that this is likely to be a key development area for the UAE over the longer term. Solar powered desalination is, in our view, going be an extremely attractive means of generating desalinated water in countries with suitable climates. It will not only help to defray the substantial and electricity needs involved in setting up and maintaining desalination facilities, but will also enable the UAE to reduce its thermal energy generation requirements somewhat, and thereby enlarge the available hydrocarbon exports.
The United Arab Emirates is one of the most attractive destinations for trade and investment in the Middle East and North Africa (MENA) region. The country possesses a well defined and implemented legislative environment, as well as strong intellectual property rights. Indeed, a series of reforms to the business environment in recent years have made the climate more propitious for foreign investment with the federal government, led by Abu Dhabi, has made significant headway in the past five years in increasing the role of the private sector.
This economic openness in conjunction with the active nature of the UAE's water sector, (in particular the large project pipeline and significant investment) has attracted a large number of international infrastructure groups. We expect this to continue, and the recent announcement that Mitsubishi Corporation and Mitsubishi Heavy Industries are to acquire a 38.4% share of the UAEs water sector projects from Metito Holdings serves to...