Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) announced on June 6 that it will invest $2.5bn into three UAE ports owned by Dubai-based logistics giant DP World.
Through the new joint venture (JV) between DP World and CDPQ, the latter will invest $2.5bn into Jebel Ali Port, Jebel Ali Free Zone and the National Industries Park. CDPQ will hold a stake of approximately 22% in the JV.
Emmanuel Jaclot, the head of infrastructure at CDPQ, said in a statement that the Dubai assets would “play a pivotal role in the evolution of the world economy” and provide the pension fund with “exposure to new fast-growing markets and trade routes in Africa and South Asia.”
CDPQ’s decision, which marks the first foreign direct investment into the Gulf emirate’s state-owned logistics and supply chain company, is hoped to help the three UAE assets reach their full potential.
Jebel Ali Port is the second-largest international gateway port outside of Asia, while the adjoining Jebel Ali Free Zone is the largest special economic zone in the Middle East region. Along with the National Industries Park, which has designated areas for manufacturing and processing companies, the value of the assets are estimated at $23bn.
“We believe this new partnership will enhance our assets and allow us to capture the significant growth potential of the wider region,” said Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World.
The companies expect to close the first co-investment as part of $5bn in the second or third quarter of 2022. Other investors will be able to participate in another $3bn investment, which is expected to close in the last quarter of 2022. This new JV comes off the back of a long partnership between DP World and CDPQ, which has seen it invest in at least 10 port terminals globally.