Abu Dhabi plans construction rush after quitting Opec

• Al Mazrouei: ‘We don’t want to be limited’
• $57bn infrastructure investment in progress
• Analysts say emirate faces housing shortage

Abu Dhabi says its decision to leave oil producer group Opec will allow it to accelerate construction across the emirate at 10 times the current pace.

“We don’t want to be limited by anyone on how much we produce to grow our economy and our industrial sector. That [was] the nature of that decision [to leave Opec],” UAE minister of energy and industry Suhail Mohamed Al Mazrouei said on Tuesday at the state-sponsored Abu Dhabi Infrastructure Summit.

“Our policy is growth. Our policy is to build a country and a community that is world-class,” he said.

During the summit’s opening address, policymakers said the Abu Dhabi government is progressing with $57 billion of infrastructure investments across 500 projects. The scope of those projects was not detailed.

The UAE said late last month that it would leave the Organization of the Petroleum Exporting Countries effective from the start of May.

“Back to that decision, we are not used to being limited by anyone,” Al Mazrouei said on stage when asked about leaving the group.

“The future spending of Abu Dhabi is way more than 50 percent of the whole spending [in the country]. Whatever we built in the past 50 years, we will build in the next four to six years,” he said.

On Monday, Abu Dhabi announced $15 billion of public-private partnership projects.

The pipeline, which comprises 24 developments, has been launched jointly by the Abu Dhabi Investment Office and Abu Dhabi Projects and Infrastructure Centre. The projects are set to go to market in 2026 and 2027.

Analysis published by AGBI earlier this month showed that despite leaving Opec, the UAE cannot accelerate oil exports overnight. The disruption in the Strait of Hormuz during the Iran war has created a bottleneck for Gulf oil and gas producers, with uncertainty over how quickly exports can return to normal.

Large-scale developments such as new roads or factories are typically government-led, but housing often goes to the private sector. A rapid build-out of new homes would be welcome in Abu Dhabi as analysts suggest it faces a shortage.

Further reading:

• Cautious capital, closer factories: UAE set for supply-chain shift
• Contract awarded to build $270m water plant in Fujairah
• Abu Dhabi pitches $55bn of infrastructure projects

Abu Dhabi’s population is growing at about two and a half times its housing supply.

“When you speak to somebody on the ground, people are noticing that the population is growing significantly,” Ali Ishaq, Savills residential director for Abu Dhabi, told AGBI at the start of the year.

Ishaq warned, however, that with projects such as the Sphere entertainment venue, a large expansion of the finance district ADGM and a joint venture between developer Aldar and sovereign wealth fund Mubadala, residents might wonder what’s in it for them. ”We really need some housing. It’s desperately needed.”