Abu Dhabi sovereign fund Mubadala continues to forge bilateral relationships with Spain’s Compañía Española de Financiación del Desarrollo (Cofides) the latest investment partner.
The two state-owned investors have joined forces to identify potential co-investment opportunities in Spain and strengthen economic and investment ties between Spain and the United Arab Emirates.
Cofides is 54% owned by Spanish public agencies, and 46% owned by private banks including Santander, BBVA and Sabadell. The fund follows robust governance mechanisms including a triple external audit procedure.
Both partners will look to common interests, particularly in relation to the development of the Spanish economy, in energy transition, sustainable mobility, transport, circular economy, digitization, biotechnology and agribusiness.
Cofides president José Luis Curbelo highlighted says this agreement will identify business opportunities that contribute to the long-term improvement of the competitiveness of Spanish companies operating inside and outside the country. He added, “the Recovery, Transformation and Resilience Plan of Spain It is an ideal instrument to promote innovative investments in those companies and sectors that are key to economic development in the coming years, highlighting especially, although not exclusively, investments linked to sustainability, the energy transition or digitization”.
In addition to this, he said UAE “offers investment opportunities in areas such as infrastructure and transport, tourism and renewable energies, in which Cofides has extensive and extensive experience”.
The announcement came as the Spanish Prime Minister Pedro Sanchez visited Dubai’s Expo 2020. He said: “As the economic recovery gathers pace, my country, Spain, and the UAE will also continue to collaborate. We want to expand job and investment opportunities, and develop joint projects.”
Mubadala has entered a number of bilateral deals involving sovereign funds, indicating that it is an element of Abu Dhabi’s soft power as it seeks to cement economic and political alliances. Mubadala has signed sovereign investment partnerships with the UK, China, France, Russia, Greece and Kazakhstan.
In February 2021, Mubadala’s green investment arm, Masdar, signed agreements with Samruk-Kazyna to explore joint initiatives in renewables. These included developing a 500MW wind farm project with operations beginning by end-2024. Oil-rich Kazakhstan aims to raise the share of renewables in electricity generation from 1% in 2020 to 10% by 2030 and 50% by 2050 by exploiting its huge wind and solar power potential.
In September 2021, Mubadala indicated that it was scaling up its plans under the UAE-UK Sovereign Investment Partnership (UAE-UK SIP) with the GBP5 billion (US$7 billion) investment framework agreed in March boosted to GBP10 billion (US$14 billion) over the next five years.
The UK is likely to feel the full impact of the capital flow very soon with the British Trade Commissioner to the Middle East, Simon Penney, telling Reuters in September 2021 that there was “line of sight” for at least GBP1 billion of investment by the year-end and “the expectations are high that it will reach a GBP2 billion watermark this year.” So far, GBP1 billion has been invested under the SIP.
The SIP is focusing on tech, infrastructure and energy transition – areas where Mubadala has already made significant investments in the UK over the past decade. Global SWF’s investment tracker for Mubadala shows that infrastructure including renewable energy represents 47% of the value of its investment in the UK.
