UAE’s sovereign funds to invest $30 billion in South Korea

ABU DHABI – The United Arab Emirates will invest $30 billion in South Korea across strategic sectors, including the nuclear power, defense, hydrogen and energy businesses.

The investment will be led by the UAE’s sovereign wealth funds, including Mubadala Investment Co., Korea’s presidential office and its finance ministry said.

The announcement came during a summit on Sunday between Korean President Yoon Suk-yeol and UAE President Mohammed bin Zayed Al-Nayhan at the Qasr Al Watan presidential palace in Abu Dhabi.

Yoon is on a four-day state visit to the Middle Eastern country – the first such visit by a South Korean leader since the two countries established diplomatic ties in 1980.

“We have decided on a $30 billion investment based on our trust in South Korea, which keeps promises under any circumstances,” the UAE president was quoted as saying by Korea’s presidential office.

Details of the investment, including the timeframe, weren’t known, but a Korean presidential official said the investment will be directed at the nuclear power, defense, hydrogen and solar energy industries as well as cultural and personnel exchanges.

President Yoon’s UAE trip was accompanied by a business delegation of some 100 Korean companies and top business executives, including Samsung Electronics Co.'s Jay Y. Lee, Hyundai Motor Co.'s Chung Euisun and SK Inc.'s Chey Tae-won.

Following an extended summit with business leaders in attendance, some 13 memorandums of understanding were signed, including one between the state-run Korea Development Bank and the Abu Dhabi state fund Mubadala to cooperate on investment in Korean companies.

Mubadala also agreed with SK Group to jointly advance into the Asian voluntary carbon market (VCM).

The number of MOUs will reach about 40 when private-level business cooperation agreements are included, officials said.

UAE’s LARGEST-EVER OVERSEAS INVESTMENT

The $30 billion investment plan will mark the UAE’s single largest overseas investment.

The UAE earlier signed a 10 billion pound ($12.2 billion) investment deal with the UK, a $5 billion deal with China and a $1.63 billion investment agreement with France.

The planned $30 billion investment in Korea by UAE’s sovereign wealth funds is also expected to revitalize Korea’s financial and stock markets, industry watchers said.

In addition to Mubadala, two other major UAE sovereign funds – the Abu Dhabi Investment Authority and the Investment Corporation of Dubai – will likely invest in various Korean sectors, industry officials said.

The three UAE sovereign funds run a combined $1.4 trillion in assets under management globally.

Korea and the UAE have been expanding their business tie-ups, with one of the most significant ones being the Barakah plant, the UAE's first nuclear power station.

Construction of the nuclear power station started in July 2012 and is partially operational.

The Barakah nuclear power plant also marks Korea's first overseas nuclear power plant construction project.

Korean-type nuclear reactors 1 and 2 in the Barakah region currently supply some 60% of electricity to Abu Dhabi.

Write to Dong-Wook Jwa at leftking@hankyung.com
In-Soo Nam edited this article.