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FDI and Outsourcing initiatives taken by Mubadala Development Company

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Introduction

Mubadala Development Company is a Public Joint Stock Company with its headquarters in Abu Dhabi, capital city of the United Arab Emirates. Its focus is on managing and developing a widespread and economically diverse range of commercial enterprises (Veolia, 2008). It does this either independently or in collaboration with top international organizations. The government is the major shareholder of the company. Mubadala’s commercial strategy is inherently built on lasting capital-intensive investments that provide strong financial incomes. The company operates a multi-billion dollar portfolio of on all fronts in projects, initiatives and investments. Through its development projects and investment, Mubadala is both a reflection of, and a facilitator for, the motivation for economic diversity of the Abu Dhabi Emirate. Its effect is domestically and internationally apparent in sectors such as aerospace, energy, real estate, sponsorship, healthcare, services, infrastructure and technology as discussed below.

1.         Aerospace

The main aim of this strategy is the establishment of a sustainable and solid aerospace industry in Abu Dhabi. The Aerospace is facilitating to establish Abu Dhabi as a global aerospace center, a foundation of the Emirate’s economic expansion strategy, on a long-term, capital intensive investment (Veolia, 2008). This integrated method to the aerospace sector incorporates comprehensive manufacturing through to Maintenance Repair Overhaul (MRO) services. MRO network is one of the main aspects of the aerospace industry that Mubadala Aerospace aims to construct. In line with its greater vision to give to the aerospace sectors for Abu Dhabi, Mubadala Aerospace established a network of companies including a full spectrum of aerospace products. The Middle East leading independent aviation technical solutions provider is the Abu Dhabi Aircraft Technologies (ADAT) and provides a comprehensive set of airframes, engines and component maintenance, repair and overhaul (MRO) capabilities.

Zurich-based SR Technics has been one of the largest sole providers of global technical aircraft services. It is a full-service provider of MRO aircraft components and engine services. In addition to this, the extensive engineering know-how, broaden their technical training offered and VIP completion services. The Mubadala Company has partnered with world-class aviation and aerospace companies to control the expertise necessary for a high tech, end-to-end technology and manufacturing base that provides both modern facilities that are of global reach (Veolia, 2008).

Furthermore, the integrated pilot training academy, supported by education, training, and R&D, is helping the company to develop the human capital and home-grown talent needed to ensure that United Arab nationals occupy the rising number of high-tech employment roles. The former Gulf Aircraft Maintenance Company (GAMCO) has been shifted to expand their current capabilities to offer more quality services to the ever increasing number of fleets in their area of operation. Horizon International Flight Academy was established in Al Ain some few years ago to train and develop civilian and military pilots, technicians and graduate trainers. The academy is open to discuss the expansion of its training portfolio in order to accommodate the developing industry in the region. Specifically, the introduction of King Air 350 into the Horizon fleet will offer training and aviation services including aerial surveillance, type rating, search and rescue, airport calibration and controller training. Mubadala wholly owns the Horizon International Flight Academy.

The establishment of Abu Dhabi UAV Investments (AD UAVI) in early 2007 was particularly to design and manufacture unmanned overhead vehicle systems. In the GCC region, the AD UAVI model has been one of the first of its kind and is offering to discuss  a number of civilian applications that are in increasing demand in the GCC and other places in the world. Mubadala commands 95% of all Abu Dhabi’s UAV Investments.

Zurich, SR Technics, which is part of the Mubadala Aerospace MRO network, and Air Tahiti Nui signed a contract to complete the three cabin modifications on the Airbus A340-300s. This was to be carried out simultaneously with C-Checks on the aircraft. The modification comprised of a transformation of the existing three class cabin structures to two classes. This also involved the complete replacement of all newly established business and economy class seats and installing a state-of-the-art Entertainment (IFE) system.

This new system equips the aircraft with the most comfortable cabins. Air Tahiti Nui drew on SR Technics’ Part 21J design approval, combined with its production and service teams’ comprehensive knowledge to complete all aspects of complex cabin modifications. These modifications ranged from project supervision, designing and installation. According to the project planning schedule, all work is to be completed on date starting in May 2013. Mubadala has a 40% interest in the company as part of a consortium (Veolia, 2008). SR Technics was selected because of its capability to offer an end-to-end service incorporating design, modification and certification. Besides partnering with Istithmar and Dubai Aerospace Enterprise (DAE), the consortium assists in bringing the Zurich-based company into regions experiencing faster growth rate in the industry.

 

In addition, Mubadala’s goal also includes the creation of job opportunities to complement the aviation manufacturing business in the composites arena. The laid down plans to achieve this include procuring key assets in the Asian and European markets and increasing their reach.

Another important area to consider expanding in the aerospace sector is the Business Jet. This is a key factor in Mubadala’s interest as the only opportunity to begin the manufacture of aircraft in Abu Dhabi soon. A crucial component towards diversifying the economy is building the Emirate’s aerospace by the year 2020.

Mubadala already has a strong presence in the upcoming aerospace industry of the region through these exceptional companies. The company promises to continue in leveraging these valuable assets to grow the more interests in the industry. Mubadala’s investment plan is based on the outcome – investing in companies and projects that will provide incremental benefits as well as to bring strong financial incomes to Abu Dhabi and its citizens.

2.         Energy

Mubadala Energy develops on Abu Dhabi’s legacy in petroleum products to pursue opportunities that that aims to meet the Emirate's present and future energy demands (Toufic et al, 2010). The gas opportunities and the company's upstream oil has been its main focus. The company has grown and expanded to regions including MENA, the Caspian Sea, Central and South East Asia. Mubadala is also active in developing technologies that will enhance the commercialization and widespread adoption of alternative energy sources and also in R&D in the renewable energy sector.

The company is working towards diversifying the energy mix that integrates a cleaner and more sustainable source of power. The energy sector assets include the following; Masdar, Libya (Block 103), Dolphin Energy, Petrofac Emirates, PSN Emirates and Nursultan Block (N Block) among others. The Company is controlling the hydrocarbon resources and capitalizing on the deep energy knowledge to develop a renewable energy industry (Toufic et al, 2010). This is viewed as a natural step forward towards supporting economic diversity and growth while at the same time, it extends the UAE’s leadership in energy. Masdar highly contributes to Abu Dhabi’s transition from a resource-based economy to one that is innovation and knowledge based. Masdar enjoys investment in large scale renewable power projects, clean technology and research (Toufic et al, 2010).

In Nouakchott, Masdar will develop a 15-megawatt solar power project in the Islamic Republic of Mauritania. The plant will supply Mauritania with 10 per cent of power capacity. The country has some of the highest degrees of solar radiation in the planet and this makes it an ideal location for solar power installations.  Mauritania has an installed grid capacity of just 144 MW which is provided mostly by diesel generators. However, the country has substantial renewable energy potential which is unexploited and is in the form of both solar and wind. Indeed, the nation’s wind energy potentiality is almost four times that of its yearly energy demand.

The 15-MW solar photovoltaic project will supply for the annual demand growth in that country which was estimated to be at the rate of 12 per cent in the year 2012. Much needed power will also be supplied to Mauritania, which currently face a severe energy shortages. Electrification rate for the country is low at 60 per cent. The Masdar solar power project is built next to the university in Nouakchott and its construction is underway and purposes to serve as solar energy's learning laboratory.  

Incorporation of solar, wind, and hydro power helps in minimizing the strain on the natural resources and serves as a link to energy security and economic development opportunities. Investing in renewable energy fosters sustainable development, preserves natural resources and contributes to energy and water security.

Besides the renewable energy projects in Afghanistan and Tonga, The power project in Mauritania happens to be a commitment of Masdar’s to the United Nations’ Year of Sustainable Energy for All which is a global enterprise declared by UN Secretary-General Ban Ki-moon.  The initiative objective is ensuring access to modern energy services universally and doubling the energy effectiveness rate of global development and double the renewable energy globally.

Globally, Masdar continues its investment in renewable energy projects. Internationally, the company prides in many projects either completed or some being under construction, including:

• The London Array in the UK which is anticipated to be the world’s leading offshore wind farm, producing up to 1GW of electricity.

• Gemasolar in Spain and which is a concentrated solar power supplying 20MW of electricity 24-hours a day with the help of innovative energy storage technology.

• The power project in Seychelles is a 6-megawatt, an 8-turbine wind farm which will produce 10-15 percent of Mahe Island’s installed capacity.

The leading solar project in North Africa and the Middle East is Masdar’s 100-MW solar power project in Abu Dhabi, Shams 1. This will produce sufficient electricity to power 20,000 homes. Masdar has invested in clean-technology companies across Europe, Asia and North America while also establishing projects in Spain and the United Kingdom.

The 630MW scheme will be the world's largest offshore wind farm and its located in the Thames Estuary. Since March 2011, its development has been under construction.  151 of its turbines out of 175 have been installed. The project is to be completed as the year ends. The total turbines (175) are to supply close to 470000 homes in the UK with adequate power (Veolia, 2008).

The construction of the London Array 20km off the coasts of Kent and Essex. Construction of the wind farm will be in two phases and will be installed on a 245 square kilometer site. The first phase will include 175 turbines with a joint capacity of 630M and will cover 90square kilometers. Plans to complete the first phase of the project are by the end of 2012. If agreed, enough energy capacity will be added when the second phase will be built. This will bring the total power produced to to 870MW. 

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