Arab-Russian Infrastructure Investment Ties Strengthen

Courted by the Russian Direct Investment Fund (RDIF), sovereign wealth funds and large institutional investors are allocating capital to Russian companies, infrastructure and other assets. In previous months, Abu Dhabi-based Mubadala Development Co. became part of a US$ 2 billion fund with the RDIF to invest in various Russian industries.

Sovereign wealth funds like the State Oil Fund of Azerbaijan (SOFAZ) and public pensions like CalPERS have embraced Russian real estate, especially in Moscow and Saint Petersburg. However, policymakers in Russia want to drive institutional investment toward Greenfield developments and infrastructure like the Central Ring Road around Moscow.

The government of Abu Dhabi may invest up to US$ 5 billion toward Russian infrastructure through a venture with a state-backed private equity fund. This fund would target toll roads, ports and airports. Already, the Abu Dhabi Investment Authority and Abu Dhabi Investment Council are major investors in infrastructure.

Russian President Vladimir Putin is bent on improving Russia’s transportation infrastructure which is critically in facilitating economic growth.

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