Solar deal shows power of East Africa for Dubai

Donwilson Odhiambo/SOPA Images via Reuters Connect

• Mozambique project worth $150m
• Trade growing with region
• Targets include Rwanda and Kenya

A Dubai energy company has joined a $150 million solar project in Mozambique, the latest indication of the UAE’s interest in investing in East Africa.

Amea Power will work with Mozambique’s Hidropower to develop the 125 megawatt Matambo solar photovoltaic power plant.

The joint Mozambique-Dubai project will provide electricity to more than 150,000 homes in the East African country and create more than 1,500 jobs during the construction phase.

• Bridging investment between the Gulf and Africa

• Zimbabwe sharpens focus on trade with UAE
• DP World opens Somaliland hub as it seeks trade boost in Africa

Last month Infinity Power, a Masdar joint venture company, signed an agreement to explore up to 1 gigawatt of renewable projects in Mozambique, enough to power 400,000 households.

East Africa is a notable expansion target for Dubai businesses. 

As well as Mozambique, Rwanda and Kenya have been identified as important markets, while Uganda said on Wednesday that it is in talks with Alpha MBM of Dubai to develop a proposed $4 billion refinery. DP World set up a new economic zone in Somaliland last year.

Dubai International Chamber concluded trade missions to Rwanda and Kenya in November, during which more than 380 business meetings were held by nearly 40 Dubai-based companies.

In 2022, bilateral trade between the UAE and Rwanda reached $653.4 million while trade with Kenya amounted to $2.1 billion, though only about 20 companies from Dubai currently operate in the two East African countries.

UAE exports to Mozambique reached $495 million during 2022, the United Nations Comtrade database shows, while Mozambique exports the other way came to $148 million.

Jean Chrysostome Ngabitsinze, Rwanda’s minister of trade and industry, said that during the first quarter of 2023 alone, exports from Rwanda to the UAE were valued at $211.5 million. 

“These are substantial numbers, but nonetheless, there is room for more growth,” he said.

Talks between the UAE and Kenya on a comprehensive economic partnership agreement, which began in the second half of 2022, are still continuing. 

Dr Salem Ibrahim Al Naqbi, the UAE’s ambassador to Kenya, said the UAE was a key destination for Kenyan exports and a major source of Kenyan imports. He said: “We are keen to further enhance this relationship.”

FDI Intelligence, a London-based magazine covering foreign direct investment, found that the cumulative value of investments from Dubai to Rwanda came to $211.1 million since 2018. It was mainly concentrated in the transportation and warehousing, communications, business services and electrical components sectors. 

Dubai accounted for 77 percent of the UAE’s investment in Rwanda, and nearly 99 percent of UAE investment in Kenya.