UAE aims to increase the contribution of foreign direct investment (FDI) to five per cent of the country’s GDP over the next five years, said Sultan Bin Saeed Al Mansoori, Minister of Economy.

Speaking ahead of the Annual Investment Meeting (AIM) in Dubai, UAE from April 11 to 13, he explained that the target was in line with the goals of the National Agenda of UAE Vision 2021.

He said that new and renewable energy sectors were key to attracting foreign capital to the UAE in the coming period, due to the giant projects implemented by the UAE Government, mainly in renewable energy and retail.

Al Mansoori explained that the UAE realised the need to diversify its economy with less reliance on oil sector. Many years ago, the UAE began to lay the foundations of a strong and competitive business environment, while sealing a number of trade cooperation agreements, taking advantage of its geographical location which links it to more than 220 markets around the world, he said.

He revealed that the ministry is currently working on an FDI law which would regulate guarantees, incentives, and clarify institutional framework.

He pointed out that the accumulated foreign investment in the country had increased by the end of 2015 to $126 billion, compared to $115 billion at the end of 2014, supported mainly by increased investments in manufacturing and heavy industries, such as aluminium and petrochemicals, as well as other sectors like tourism and aviation. The increased FDI resulted in taking the UAE to No. 1 rank regionally and 22nd globally in the World Investment Report 2015.

Stressing the importance of Annual Investment Meeting, he said it serves as a unique platform to promote investment in various priority sectors, as well as provide a direct meeting point for government delegations, and competent institutions, because it is attended by many dignitaries, officials and delegations from several countries. The event presents an ideal platform for fostering partnerships in public and private sectors.

Dawood Al Shezawi, head of AIM organising committee, said that despite the significant decline in oil prices globally, which is a challenge for oil production companies, it represented a great opportunity for many companies, due to the lower costs of raw materials and the increase in demand for products leading to higher profitability margins.

Decline in oil prices was good news for the world's most oil importing countries, mainly India, China and European countries. Also, the US refineries benefited from this decline, while the drop was a big challenge for the countries producing and exporting oil.

Al Shezawi added that the theme of the sixth Annual Investment Meeting is “The New World of FDI, Key Features and Best Practices”. The event will help companies to understand the dynamics of world markets in light of the significant decline in oil prices. It will also help investors understand how to take advantage of this downturn, and help to develop well-defined investment strategies.

With the decline in oil prices in global markets and reduced spending by international oil companies, investment in renewable and clean energy sectors is on the rise. According to Bloomberg, 2015 was the year of the installation of renewable energy capacity in the world, where both wind and solar PV saw around 30 per cent more capacity installed worldwide.

The wind total for last year is likely to end up at around 64GW, followed by solar at 57GW. Clean energy investment surged in China, Africa, the US, Latin America and India in 2015, driving the world total to its highest figure of $328.9 billion, up 4 per cent from 2014 revised $315.9 billion and beating the previous record set in 2011 by 3 per cent.

The latest figures from Bloomberg New Energy Finance show dollar investment globally growing in 2015 to nearly six times over 2004 total and a new record of one third of a trillion dollars, despite four factors that might have been expected to restrain it: further declines in the cost of solar photovoltaics (allowing more capacity to be installed for the same price); strength of the US currency (reducing the dollar value of non-dollar investment); continued weakness of the European economy, formerly the powerhouse of renewable energy investment; and perhaps, most significantly, the plunge in fossil fuel commodity prices. – TradeArabia News Service