Bahrain to invest $1.3bn into UK

Reuters

• Funds for clean technology, business services and manufacturing
• Investment equals 2% of Bahrain’s GDP
• Free trade talks between GCC and UK are ongoing

Bahrain’s private sector plans investment of more than £1 billion ($1.26 billion) into the UK, with the aim of driving greater cooperation in clean technology, business services and manufacturing.

Investments will be through the kingdom’s sovereign wealth fund Mumtalakat, along with Investcorp, GFH Financial Group and Osool Asset Management.

The Strategic Investment and Collaboration Partnership was signed following a meeting between UK prime minister Rishi Sunak and Crown Prince Salman Bin Hamad Al Khalifa, prime minister of Bahrain, in London.

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Sunak said the agreement “marks the next chapter in the historic and close relationship between the UK and Bahrain, which spans security, defence and trade”.

Scott Livermore, chief economist at Oxford Economics Middle East, said the “significant commitment” by Bahrain amounted to around 2 percent of the country’s GDP.

“The investment seems an important part of Bahrain’s diversification strategy, in which they hope to benefit from the UK’s willingness to strengthen trade and investment links with the Gulf,” Livermore said.

GCC countries are negotiating with the UK for a free trade agreement.

Talks between the six countries in the Gulf bloc – Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain – and the UK are set to enter their fourth round in London this month.

As part of the partnership, Mumtalakat and Investcorp are considering a joint student housing venture.

This would manage the refurbishment and leasing of Investcorp’s houses in multiple occupation (HMO) in the UK and help with their acquisition and underwriting.

Investcorp currently manages a portfolio of 1,200 beds across Nottingham, Bristol, Exeter and Leeds.

“We believe that there is a shortage of well-managed, well-maintained, and affordable student HMO assets in major UK university cities,” Rishi Kapoor, Investcorp’s co-chief executive officer, said.

The tie-up hopes to acquire an additional 700 to 1,000 beds “over the next several years”, according to a joint statement.

Trading partners

Bahrain was the UK’s 60th largest trading partner in 2022, accounting for 0.2 percent of total UK trade.

Goods and services (exports plus imports) between the the two countries was £3.1 billion, an increase of 93.5 percent from the previous year.

UK exports to Bahrain amounted to £763 million in 2022 (up 40.5 percent year on year). UK imports from Bahrain totalled £2.3 billion, an increase of 121 percent on 2021.

“This is undoubtedly a major investment commitment by Bahrain and it comes at an exciting time, running parallel with ongoing negotiations on the free trade agreement,” Paula Boast, vice chair of the British Chamber of Commerce Bahrain, told AGBI.

“It stands tall as a significant add-on to the anticipated long term boost to the UK economy and truly cements the Bahrain-UK trade relationship.”