ARTICLE | 6 AUGUST, 2014 – 14:03 | BY FAISAL CHAREUF
Abu Dhabi, the capital and largest of the 7 Emirates has seen its GDP grow near 5 percent in 2013, in alignment with the emirate’s growth and economic diversification aspirations. Abu Dhabi had an estimated GDP of AED 950 Billion in 2013, up from AED 909 billion in 2012.
At this year’s UAE Outlook 2014, the Department of Economic Development said that the emirate of Abu Dhabi was expected to award $50 billion worth of new projects in addition to another $10 billion worth of projects for Al Ain’s Garden City Project.
Furthermore, officials claim that Abu Dhabi will spend around $346 billion in various sectors from 2013 to 2020 in support of manifesting the Vision 2030. Besides the oil and gas sector, the capital is significantly diversifying into numerous sectors as per its strategic plan.
Oil and Gas revenue still constituted 55 percent of total GDP in 2013 and will play an integral role in the UAE’s economy for the foreseeable future. The average extraction of petroleum in 2013 is estimated at 2.7 million barrels/day. By 2017, oil output will increase by 3.7 percent to cross 3.1 million barrels/day, as new offshore oil development projects worth AED 28.3 billion awarded in 2013 help increase production levels.
Natural gas will play an increasingly important role as Abu Dhabi continues to profit from its possession of an estimated 5 percent of global natural gas reserves. Natural gas is and will continue to be an extremely valuable export.
It is also being used domestically for industry and electrical power production, allowing Abu Dhabi and the UAE as a whole to reduce pressure on petroleum.
The Abu Dhabi Municipality is currently planning for the development of approximately 12,000 Smart Streets that will include QR codes on street signs for navigation and information purposes. This project is part of the new Abu Dhabi Emirate Street Addressing, GeoNames and Signage System (ADAGS) which is line with international best practices and aimed at improving individual, commercial, and industrial logistics. The project is said to be completed by the end of 2015.
On a similar note, The Abu Dhabi fund for Development’s has received a capital injection of $4 billion last year and its scope now includes the UAE, which will also see the development of education, health, water, irrigation and agriculture.
The real estate development and growth in Abu Dhabi has been evident by the rapidly changing skyline across Abu Dhabi as well as the new commercial, residential, and hotel and entertainment destinations outside the island. The capital has been working on numerous multi-billion dollar real estate and construction mega projects which involve government backed mixed use projects, shopping malls, bus stations, ports and tourist attractions in an effort to integrate the growth of the real estate, retail, and tourism sectors in a strategic manner. A large volume of such projects are taking shape in areas such as Yas Island, Sadiyat Island, Lulu Island, Al Raha and Reem Island.
On the tourism frontier, Abu Dhabi still has a quieter market than neighboring Dubai, which primarily depends on business tourism. But the emirate is determined to invest in more strategic initiatives such as the Ferrari Theme Park, Yas Water Park, Formula one Grand Prix and Sheikh Zayed Mosque in attempts to attract more visitors.
Abu Dhabi’s AED 100 billion cultural district on Sadiyat Island, with 3 world class museums, prestigious hotels, residential areas, schools, and retail entities will continue to attract throngs of visitors as projects come to completion.
The retail scene in Abu Dhabi is also set to experience growth and diversification as projects including Sowwah Square, Yas Island Mall and Reef Mall among others, begin to open their doors to the public. The capital’s retail space, which is registering an 18-20 percent annual growth, capitalizes on lesser rental price of AED 257 (USD 70) per Square Feet per annum, compared to AED 400 (USD 109) in neighboring Dubai, and an underutilized market that is home to a huge population of people with high disposable incomes who love shopping!
In 2012 The Abu Dhabi Ports Company opened the Khalifa Port, having a present capacity of 2.5 million tons of TEUs and 15 million tons of general cargo. By 2030, it is expected to handle a volume of 15 million TEUs and 35 million tons of general cargo. In addition to the port, the mega industrial zone Kizad is set to boost the trade sector by attracting large volumes of local and international industries to set up shop in what is soon become one of the world’s foremost industrial zones.
In order to enhance its growing trade sector as well as the tourism sector, the emirate is also expanding its transport resources. Abu Dhabi airport has handled a total of 16.5 million passengers and 706,000 tons of cargo, up from 14.7 million and 567,000 tons in 2012. Road transport infrastructure in the capital is also under expansion and a budget of AED 4.77 (USD 1.3) billion has been secured for the 1st railway track of UAE, which will connect onshore oil and gas fields in the Abu Dhabi’s Western Region to the ports in the west, thereby bringing economic efficiency.
As per the Vision 2030, Abu Dhabi’s overall growth objectives will be achieved through a sustainable approach which can ensure efficient use of resources and well-being of the residents. It has recently enforced legislation that all the buildings and developments should comply with the Estedama Pearl rating system. Estedama, which in Arabic stands for sustainability, is a building design methodology aimed at developing more sustainable buildings, constructions and communities. The Pearl Rating System is a green building rating system similar to the LEED methodology used in many Western countries, which evaluates buildings based of their adherence to green technologies and economically friendly initiatives.
Masdar continues to contribute to the capital’s target of 7 percent renewable energy capacity by 2020. The Abu Dhabi government has committed $15 billion to Masdar for clean and renewable energy investments. More than $1 billion in equity has been invested across renewable energy projects which are valued at over $6.9 billion today.
Locally, Masdar’s $600 million Shams 1 concentrated solar power (CSP) plant recently put Abu Dhabi on the international renewable energy map as the 3rd ranked in the world in both 2013 CSP technology investment and CSP capacity. Other significant renewable energy projects in the pipeline include the Sir Baniyas Onshore Wind Farm with an initial capacity of 30 MW as well as Noor One which is Masdar’s second local flagship project, a PV (solar) plant with a 100 MW capacity and annual electricity generation of 170 GWh.