Onwards and upwards: Plans to attract more private capital to the region are well advanced

Located in the west of the emirate, Al Gharbia has long been an important pillar of Abu Dhabi’s economy. In the coming years, it is set for substantial investment as the government looks to rejuvenate the region and ensure that local talent is retained and plays an integral role in development. As such, over the next two decades, a host of opportunities are expected to materialise for savvy investors, and the Western Region Development Council (WRDC) is on the lookout to attract the best of these to the region.

Economic Landscape & Demographics

 Al Gharbia generates more than 44% of Abu Dhabi’s GDP, with an economic output exceeding some Dh115bn ($31bn) per year. Given that the region accounts for the majority of the emirate’s oil and gas reserves, this is unsurprising. Yet despite this significant contribution to the emirate’s broader economy, the impact on local growth and diversification has until recently been relatively limited. Even though the population grew by 163% between 2005 and 2012 from 108,600 to 285,400 people, Al Gharbia remains the least densely populated area in the emirate with 8.1 people per sq km, according to figures from the Statistics Centre - Abu Dhabi (SCAD). The region’s recent population growth is due to the attraction and retention of Emirati nationals as well as the professional and non-professional expatriate employees needed to drive the ongoing and planned large-scale hydrocarbons and infrastructure projects. Emirati nationals make up around 10% of the local population, at 28,824 in 2012, according to SCAD’s “Abu Dhabi Statistical Yearbook 2013”, with the remainder comprising expatriates. The population is forecast to exceed 350,000 by 2030, according to the Al Gharbia Investment Roadmap, a report put out by WRDC. This is both the result of development plans now in place and the source of future investment potential in the region. Such rapid demographic growth has stimulated substantial demand for infrastructure and services. The Al Gharbia Investment Roadmap forecasts that the region’s GDP will exceed Dh500bn ($136bn) by 2030. This will be achieved by an ambitious investment agenda. There are an estimated Dh240bn ($65bn) worth of projects in the pipeline for the region. Oil and gas works account for 50% of this; power generation, 25.8%; infrastructure and transport, 22.5%; and tourism, 1.7%.


The new development agenda on which the region is embarking started in 2004 with the restructuring of local governance and was completed in 2006 with the establishment of the Western Region Municipality (WRM), an administrative entity, and WRDC, an advisory body tasked with improving the quality of life for the population in Al Gharbia by upgrading the level of regional manpower, creating an appropriate business and investment climate, and proposing mechanisms and tools to develop infrastructure more generally.

WRDC has built an impressive agenda over the last seven years, collaborating with its strategic stakeholders, the WRM and Abu Dhabi Urban Planning Council (UPC), to develop Plan Al Gharbia 2030, a long-term strategy for the region that aims to support local development and social and economic growth. With this blueprint in place, subsequent work has focused on detailing policy and developing the implementation framework to translate Plan Al Gharbia 2030 into material improvements in all sectors of the economy and society.

 Ready to Go

In keeping with its mandate to support the involvement of the private sector in developing projects and in coordination with the relevant government entities, WRDC has been launching “ready-to-go” investment packages to allow both small and large investors to play an active role in realising the objectives laid out under Plan Al Gharbia 2030. The projects and implementation packages designed by WRDC are assessed and endorsed by the UPC and WRM or other relevant government agencies prior to launch to facilitate licensing procedures for investors and ensure the projects’ alignment with the overall direction of policy.

Further, WRDC has already identified areas that should aid in the economic and social development of the region. The Al Gharbia Investment Roadmap and the Sector Development Study produced by WRDC have highlighted energy, petrochemicals, agriculture, food processing and tourism as key economic sectors that have significant potential to boost economic growth, job creation and social development in the region.

Energy Developments

“The UAE has clearly realised that conventional natural gas alone cannot meet its future growing energy demands. Towards that end, it has pioneered four major initiatives that are ‘unconventional’ to the region: construction of nuclear power plants, development of renewable energy, development of sour gas resources, and the potential substitution of natural gas re-injection by carbon dioxide and nitrogen, making more natural gas available for domestic consumption,” Saif Al Ghafli, the CEO of Al Hosn Gas, told OBG.

The Al Hosn gas project, a joint venture between Abu Dhabi National Oil Company (ADNOC, 60%) and Occidental (40%), was established in 2010. The project will extract 1bn cu feet of gas per day from the Shah field. As of October 2013, 90% of the facility was completed and drilling was three months ahead of schedule. The facilities should begin production by late 2014. The project is expected to be a game changer in terms of the accessibility and pricing of natural gas for domestic use, but it presents challenges as well as it is the first attempt to extract the territory’s highly sour gas reserves. The major incentive for Occidental is that the Shah field will produce rich gas, comprising sales gas, condensate and liquefied petroleum gas (LPG).

It is the latter two that will make the project financially feasible. Al Hosn Gas will not only bring 500bn British thermal units per day of sales gas to market, but also 30,000 barrels per day (bpd) of condensate and 25,000-30,000 bpd of natural gas liquids (NGLs) up to 2041. In addition, the partners have calculated that export revenues from sulphur, which will be transported by rail to the port of Ruwais, will offset the cost of extraction. Further, in May 2013 Shell won the $10bn contract for a sour gas project at the Bab field. It is anticipated that this will add approximately 520m cu feet of gas to Abu Dhabi’s supplies by 2020. Construction contracts for the development are expected in 2015 (see Energy chapter).

“With growing demand for energy, it is natural that even the Middle East is pursuing unconventional gas initiatives. Most gas fields in the region are sour or tight, and that requires massive capital outlays to unlock these vast reserves. Fortunately, the technology has advanced to a point where it can be done safely while remaining economically feasible,” Glenn M Vangolen, the senior vice-president for the Middle East at Occidental, told OBG.

Nuclear In The Mix

 In addition, the UAE’s first nuclear power plant is scheduled to open at Braka in 2017. The area is undergoing major development in preparation for the plant, and the site, 240 km west of Abu Dhabi City, is set to grow rapidly. In December 2009 the government-owned Emirates Nuclear Energy Corporation selected a consortium led by the Korea Electric Power Corporation to be the prime contractor for the programme.

In 2012 the emirate relied on natural gas as the feedstock for all of its electricity generation, but nuclear power is expected to meet over 25% of Abu Dhabi’s peak demand requirements by 2020. With a high capacity factor, huge carbon emissions savings and increasing cost competitiveness, nuclear energy is seen as the best way of meeting the strong demand growth in the next decade. There is substantial oversight capacity for the developing programme, and the regulator has engaged with global bodies to ensure full compliance with international regulations and best practice (see Utilities chapter).

Real Estate

 Al Gharbia is witnessing the phased implementation of Plan Al Gharbia 2030, and much of the work is currently focused on the roll-out of the necessary infrastructure to support growth. Concurrently, WRDC has earmarked real estate development as an important enabler of investment and development across the region. To that end, WRDC has launched its first mixed-use commercial district programme, with the private sector undertaking the delivery of phase one under the name Al Hai Al Tejari in both Madinat Zayed and Ghayathi as well as Al Wajeha Al Bahriya in Mirfa.

Opening Soon

 The first project to be delivered is in Madinat Zayed, the largest city in Al Gharbia, for which land was made available to investors via a 25-year capital lease with the possibility of an extension of similar length.

In return, the lessee commits a percentage of its operating revenue to the Ministry of Social Affairs as a contribution to the provision of social care for residents of the region with special needs. The project was awarded to NTCC, a local development firm which has invested Dh100m ($27.22m) for the delivery of the project, which is currently scheduled for the first quarter of 2014.

Now that the project is nearing completion, WRDC is supporting the developer by attracting and negotiating with the best service providers. To date, leases have been signed with the Abela supermarket chain, which will operate under the new name Souq Planet; a business centre for the Abu Dhabi Department of Economic Development; and Al Hilal Bank.

Encouraging Investment

 To maximise the benefits to the community, WRDC is in talks with NTCC to create a special purpose vehicle that will allow smaller investors in the region to take part in the financing and management of this development and others, offering attractive returns.

Similarly, Al Hai Al Tejari in Ghayathi and Al Wajeha Al Bahriya in Mirfa will utilise the successful legal framework in place in Madinat Zayed and allow local investors to play an active role in the communities’ development. In total, almost 380,000 sq metres of land is slated to be leased out to developers by WRDC for the construction of residential, commercial and community spaces. Both committed and planned developments will also serve the added purpose of promoting the region as a new home for innovative and sustainable practices in construction, financing, marketing and other aspects of the project lifecy-cle. This is reflected, for example, in the new Souq Planet supermarket.

Developed by the National Catering Company (NCC) Group, the Souq Planet supermarket will be the first in the Middle East to introduce self-scanning, allowing customers to use hand-held scanners that make shopping much quicker and easier. NCC has engaged Re-Vision and Motorola Solutions to implement the personal shopping system in Madinat Zayed. The concept is seen as an important marketing and branding exercise for the region, and fits with Abu Dhabi’s emphasis on technological advancement. Souq Planet will also support local products, sourcing local food as part of its commitment to generate new sources of revenue for the region’s farming communities. According to Obaid Al Mazrouei, the director of investment promotion and public relations at WRDC, “We are trying to do things differently and to attract new ideas. We are trying to be a leader for the region.”

Transport Infrastructure

 While these new real estate developments will likely be welcomed by residents of the region, it is the wider infrastructure sector that is expected to expedite long-term economic growth in Al Gharbia. Indeed, the upgrade and development of the rail and road network will integrate the region more fully with the whole of the UAE as well as the wider GCC.

The Dh40bn ($10.9bn) Etihad Rail project, which is planned to connect the UAE’s seven emirates, is first being rolled out in Al Gharbia. Phase one of the project, which is almost complete, comprises 266 km of track linking Habshan and Shah in Al Gharbia’s interior with the industrial hub of Ruwais, 240 km from Abu Dhabi City. Phase two will connect with Saudi Arabia at Ghweifat and Oman at Al Ain, while phase three will connect the network to the Northern Emirates. The whole network, stretching over 1200 km, is scheduled for completion by 2018.

With freight trains travelling at speeds of 120 km per hour, the railway will help integrate Al Gharbia with the rest of the country. The network, which will initially serve the purpose of transporting up to 11,000 tonnes of sulphur per day from ADNOC sour gas projects in the region, will boost industrial development, as well as imports to and exports from Al Gharbia. While the original blueprint for the network included both freight and passenger services, the project has since been revised and will initially focus solely on freight services. Passenger service may be added at a later date (see Transport chapter).

Industrial Infrastructure

The growth of a strong industrial base is a key priority for WRDC and the Abu Dhabi government. In Al Gharbia this will be supported by the provision of industrial zones developed by the Higher Corporation for Specialised Economic Zones (ZonesCorp). In 2011 the body signed a memorandum of understanding with WRDC to “deliver joint initiatives dedicated for sustainable development in the Western Region”.

ZonesCorp not only brings the ability to develop hard infrastructure, but also an investment framework that should prove attractive for industrial growth in Al Gharbia, as it has elsewhere across the GCC region. Products manufactured in ZonesCorp zones receive duty-free access to the GCC and to signatories of the Greater Arab Free Trade Agreement. They also benefit from duty-free import of machinery and raw materials, free repatriation of profits and capital, and an inexpensive operating environment, particularly in terms of utilities costs.

Two New Cities

 To support the considerable growth and diversification of the economy of Al Gharbia expected in the years running up to 2030, a significant volume of industrial space will be required. With this in mind, two new industrial cities in Al Gharbia were approved for development by the Abu Dhabi Executive Council in January 2012.

The first industrial city will be situated on 14 sq km of land in Ruwais and will be dedicated to the chemicals, petrochemicals, plastic, oil and gas, cement, building materials and logistics industries. Development of additional industrial capacity in Ruwais will drive the growth of the population in the adjacent residential community. While the ultimate location of the community is not clear as of yet, Ruwais is set to be the largest urban centre in Al Gharbia. The community will include – in parallel with Madinat Zayed – a series of regional-level public facilities and services for the population of Ruwais as well as the wider region.

The second at Madinat Zayed will be built over 5.2 sq km and will be focused on oil and gas services, food industries and logistics. Together, the two industrial zones, along with others currently under consideration, will play a pivotal role in creating jobs, diversifying the economy, and attracting local and international investment to the region, according to Mohamed Hamad bin Azzan Al Mazrouei, the acting undersecretary of the Ruler’s Representative Court in the Western Region and the director-general of WRDC, telling OBG that, “The development of industrial cities in Ruwais and Madinat Zayed will boost demand for residential, commercial and retail space, providing the necessary social infrastructure to improve the standard of living.”


 There should be plenty of opportunities for investors servicing the hydrocarbons industry based in Al Gharbia and prospering downstream from it. Midstream and downstream activities in Al Gharbia are expanding rapidly. The refinery facilities at Ruwais, operated by ADNOC subsidiary Takreer, are set for an overhaul. The current refining capacity in Ruwais is 120,000 bpd of crude oil and 280,000 bpd of condensate in two processing trains. In 2014 an additional 420,000 bpd will be added to this capacity with a new refinery. Furthermore, a group III base oil plant is due to be commissioned in 2014, bringing the annual production capacity to around 500,000 tonnes of group III base oil products and 120,000 tonnes of group II products. In 2016 Takreer will add a carbon black and delayed coker project to the site, which will manufacture UV carbon black, green coke and propylene.


Ruwais is also home to a manufacturing base for much of this feedstock. Indeed, Borouge, a joint venture between Austrian petrochemicals firm Borealis and ADNOC, has made the town its centre for manufacturing. Borouge currently produces 2.1m tonnes of ethylene, 1.14m tonnes of polyethylene, 800,000 tonnes of polypropylene in two plants and 752,000 tonnes of propylene in an olefins conversion plant. In 2014 this capacity will be bolstered with the commissioning of Borouge 3.

In addition, the Linde Group is constructing a third ethane cracker with a capacity of 1.5m tonnes of ethylene a year at a cost of $1.075bn, while a consortium of Samsung and Tecnimont is building two more polyethylene units with a capacity of 1.08m tonnes per year, two polypropylene units producing 960,000 tonnes per year, and a 350,000-tonnes-per-year, low-density polyethylene unit. This comes at a cost of $1.2bn and will bring total polyolefins capacity in Ruwais to 4.5m tonnes per year.

Abu Dhabi National Chemicals Company (ChemaWEyaat) will support the development of Ruwais as a centre for petrochemicals production by taking feedstock from ADNOC to manufacture aromatics. Established in 2008 as a joint venture between the International Petroleum Investment Company, Abu Dhabi Investment Council and ADNOC, ChemaWEyaat has two major projects, the Madinat ChemaWEyaat Al Gharbia Project (MCAG) – a plan to develop a chemicals city in Ruwais – and the Tacaamol Aromatics Project. MCAG will provide the infrastructure for the aromatics plant, the first phase of which should convert 3m tonnes per year of naphtha into benzene, paraxylene, phenol, mixed xylenes and cumeme by the first quarter of 2018.

Both Borouge and ChemaWEyaat should provide a strong base for investors to venture further downstream. Indeed, the long-term vision for Abu Dhabi is to attract industry into plastic conversion in Al Gharbia. Over the coming two decades, the region could emerge as an important location for plastics and chemicals manufacturing.

Food, Agriculture & Tourism

The other main pillars of growth for Al Gharbia will be the food and agriculture and tourism industries. Local agricultural output is varied, although dates remain the principal crop in the region (see analysis). In the last decade tourism infrastructure has been developed in Al Gharbia, particularly in the desert oasis of Liwa and the desert island of Sir Bani Yas. In 2012 the region welcomed 87,000 guests with an average length of stay of 3.1 days, according to the SCAD “Abu Dhabi Statistical Yearbook 2013”.

There are 706 hotel rooms in the region, with an average occupancy rate of 64.6%. This suggests that the region currently has adequate inventory to meet the demand for tourism services. However, although the emphasis is likely to remain on high-end and niche ecotourism rather than volume, the government is keen to boost the number of visits to the region and has earmarked an additional capital budget for investments in this field in the coming years.


The opportunities for investment across a number of sectors are growing in Al Gharbia. “Development will be spearheaded by improved transportation links, major infrastructure projects and investment in renewable and nuclear energy, as per Plan Al Gharbia 2030,” Mohamed Hamad bin Azzan Al Mazrouei of WRDC told OBG.

With the policy framework and strategy for growth now in place, WRDC and the government have turned their attention to implementation. This should bring private capital to the region from investors in fields ranging from real estate to food processing. The environment for investment is strong, and incentives are in place that should increase returns. At the same time, WRDC is working hard to ensure that such investment also benefits local communities and has a social and economic impact in the region. This balance should bring incremental growth and development to Al Gharbia in the coming years.

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The Report: Abu Dhabi 2014

Al Gharbia chapter from The Report: Abu Dhabi 2014

Cover of The Report: Abu Dhabi 2014

The Report

This article is from the Al Gharbia chapter of The Report: Abu Dhabi 2014. Explore other chapters from this report.

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