Veolia Water and Mubadala team up in MENA
- From: Vol 9, Issue 10 (October 2008)
- Category: General
- Region: Middle East
- Related Companies: Mubadala Development Co and Veolia Water
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The rush to sign joint ventures in the Middle East this month has seen Veolia join forces with Mubadala. The mix of financial muscle and water expertise is mouthwatering
Veolia Water has announced a joint venture with Abu Dhabi’s Mubadala Development Company. The joint venture company will focus on water production, distribution, wastewater collection and treatment in the Middle East and North Africa, and will be 51% owned by Veolia Water and 49% by Mubadala, which itself is wholly owned by the Abu Dhabi government.
Governments in the Gulf and North Africa are turning to private finance to meet their infrastructure needs. Veolia has strong credentials as a water operator and engineering, procurement and construction contractor, but it prefers not to commit capital to projects. The arrangement with Mubadala gives it the financial strength to participate more broadly in the Middle East water market as it develops.
“We are looking for more water cycle management for big industries, for example zero liquid discharge projects,” Veolia Water CEO Antoine Frérot told GWI. He explained that Mubadala’s presence in the JV will supply the financial muscle to target the larger projects. “Water is a capitalintensive business, especially in this region. Because we have Mubadala on board, it will be easier for us to find financing.”
There are also some opportunities closer to Mubadala’s home in Abu Dhabi. Its investment portfolio in the UAE encompasses several private property developments, including 100% ownership of the Abu Dhabi Future Energy Company (ADFEC), the private joint stock company that is driving the Masdar initiative. Up to three SWRO plants and one MBR facility are understood to be planned for the Masdar development, and a Mubadala source confirmed that the joint venture has already been approached by several real estate developers in the Gulf in connection with the development and management of water infrastructure.
Frérot explains the bearing that the JV is likely to have on Mubadala’s concerns in the water sector. “You could imagine that if Mubadala is interested in investing in projects, these interests will be brought through the joint venture. We [the JV] will certainly be interested and will compete for water services in the Masdar zone.” In July this year, Mubadala announced a high-level alliance with GE, encompassing among other things a joint clean energy and water research centre based in Masdar.