Investment and Financial Cooperation Between Korea and the UAE
Korea and the UAE Agree to Strengthen Investment and Financial Cooperation
Korea and the United Arab Emirates (UAE) agreed to further expand their investment and financial cooperation during the Korea-UAE summit[1] held in Abu Dhabi, the UAE on January 15.
The UAE has pledged to invest USD 30 billion in Korea led by the UAE’s sovereign wealth funds[2] including the Mubadala Investment Company. The investment will be directed at Korea’s high-tech industries such as energy, nuclear power, hydrogen, solar energy and defense.
The UAE government underlined that it has decided a USD 30 billion investment based on its trust on Korea. The UAE’s investment is expected to contribute to the global competitiveness of Korea’s promising companies and the development of the Korean capital markets. It will also help further strengthen bilateral economic cooperation between the two countries that have maintained special strategic partnership.
Moreover, the Korea Development Bank (KDB) signed a memorandum of understanding (MOU) on sovereign investment partnership (SIP)[3] with the Mubadala Investment Company as an attempt to specify the investment cooperation plans. Through the agreement, they are projected to develop partnership in various ways such as seeking opportunities for joint investments in Korean high-tech companies, sharing investment information, and jointly entering 3rd party markets.
The Export-Import Bank of Korea (KEXIM) also signed an MOU on financial cooperation with the Abu Dhabi National Energy Company (TAQA). Based on the MOU, the KEXIM plans to seek a framework agreement (F/A) with TAQA. This agreement will enable rapid financial support for Korean companies that participate in various TAQA’s projects associated with seawater desalination and electric power transmission and distribution, among others.
The government will discuss[4] the possibility of holding the Korea-UAE Joint Economic Committee (JEC)[5] within the first half of 2023 with an aim to systemically implement outcomes made during this summit, including investment and financial cooperation projects, and take stock of the progress.
In particular, the government will focus on building the tentatively entitled Korea-UAE Investment Cooperation Platform[6] to swiftly implement the investment commitment agreed on by the two countries’ leaders.
[1] This marked Korea’s first state visit to the UAE since Korea and the UAE established diplomatic relations in 1980.
[2] The UAE has 3 sovereign wealth funds that all rank in the top 20 when it comes to current total assets (as of 2021) and the country uses the funds to create sustainable profits in the non-petroleum industries and achieve its industrial diversification. The 3 funds are the Abu Dhabi Investment Authority (current assets: USD 828.0 billion, global ranking: 3, as of 2021), the Investment Corporation of Dubai (assets: USD 302.0 billion, ranking: 10) and the Mubadala Investment Company (assets: USD 284.0 billion, ranking: 13).
[3] It is the Mubadala Investment Company’s coordinated investment framework to partner with sovereign investors with which the UAE seeks to form a strategic relationship and make joint investments.
[4] Deputy Prime Minister Kyungho CHOO is scheduled to meet with the UAE Minister of Finance during the World Economic Forum (WEF) held in Davos, Switzerland on January 16-20.
[5] It was formed in 2006 following an agreement by the two countries’ then-leaders as an inter-ministerial cooperation channel between Korea’s Ministry of Economy and Finance and the UAE’s Ministry of Finance to manage and handle the two countries’ major economic issues.
[6] Joined by Korea’s investment institutions in both the public and private sector, this platform will serve as a bridge between Korea’s investment institutions and the UAE.
Please refer to the attached file.
National Symbols of the Republic of Korea