Abu Dhabi, UAE – 25 November 2024: Public-private partnership (PPP) models have emerged as vital instruments for sustainable development and economic growth. By harnessing the strengths of both the public and private sectors, PPPs deliver impactful projects with sustainable socioeconomic benefits. These partnerships have gained international prominence, with World Bank data showing that PPP investments in developing countries surpassed $83 billion in 2020, despite global economic challenges. According to the World Economic Forum (WEF), PPPs have the potential to address the infrastructure financing gap, estimated to require $15 trillion by 2040, while reducing operational costs by up to 25%, according to a report by McKinsey.

Beyond producing impactful projects, PPPs facilitate knowledge transfer and technology integration. According to the World Bank, these partnerships improve public sector efficiency by providing access to private sector technology and management expertise. Compared to traditional projects, knowledge transfer facilitated through PPPs has the potential to raise public sector efficiency by 30%, and accelerate the sector’s adoption of digital innovation by 40%, PwC reported. Countries that leverage PPPs for infrastructure development experience an additional 1.5% in annual economic growth on average due to improved investment environments, according to a report from the Organisation for Economic Co-operation and Development (OECD).

The Abu Dhabi Investment Office (ADIO) plays a pivotal role in advancing Abu Dhabi’s PPP framework, in alignment with the emirate’s economic acceleration and investment strategies. The framework strengthens cooperation between local and international investors and government entities with a focus on promoting investment in strategic sectors, furthering the emirate’s competitiveness, and bolstering economic prosperity. In Abu Dhabi, PPPs facilitate private sector involvement in public infrastructure development and value-added services, targeting sectors like renewable energy, transportation, and healthcare. From 2020-2024, ADIO facilitated a total of AED 2.4 billion in PPP deals, underscoring Abu Dhabi’s position as a premier investment destination.

The Zayed City Schools project exemplifies the success of Abu Dhabi's PPP model in education, representing the nation’s first time to have schools developed under a PPP framework. This collaboration with the Abu Dhabi Department of Education and Knowledge (ADEK) will deliver three state-of-the-art schools for over 5,000 students from kindergarten to high school. The 22-year design, build, finance, and maintenance contract was awarded to a consortium led by BESIX, a Belgian construction group, and Plenary Group, an Australian infrastructure investor and developer, showcasing the PPP model’s capacity to integrate private sector efficiency with public interest.

Similarly, the Abu Dhabi LED Street Lighting Project, the first of its kind in the GCC region, involves retrofitting 176,000 streetlights with LEDs, supporting energy conservation, reducing emissions, and enhancing road safety. This two-phase project, to be executed in collaboration with the Abu Dhabi Department of Municipalities and Transport (DMT), involves two separate 12.5-year concessions, the first of which was awarded to local firm Tatweer, and the second of which went to a consortium formed by French companies EDF and Engie.

ADIO also recently concluded the tender process for the Khalifa University student housing project, set to become the largest of its kind in the region with 3,260 rooms and shared facilities across two campuses. This project is the first PPP development to integrate the In-Country Value (ICV) scheme, supporting national economic goals by prioritising local procurement. The accommodation development includes a 23-year concession awarded to the KUnnected Living consortium, led by Plenary Group, BESIX, and Mazrui International, in collaboration with Khalifa University. The project illustrates the potential of PPPs to contribute economically while aligning with national priorities.

Together, ADIO’s PPP projects are expected to create nearly 5,000 construction jobs and 450 operational roles, directly impacting local employment. The framework enables more effective utilisation of the public budget, optimising resources to achieve greater impact, with ADIO facilitating and the Department of Finance – Abu Dhabi (DoF) saving AED 1.4 billion in capital and operational costs and energy expenditures across these projects.

ADIO’s rigorous procurement and deal structuring have earned international acclaim. Zayed City Schools and the LED Street Lighting projects won “Deals of the Year” awards at the IJGlobal Awards in 2022 and 2023, affirming Abu Dhabi’s ability to attract and execute high-calibre projects, bolstering its reputation on the global stage.

Beyond individual projects, ADIO has pioneered advancements in regulations, governance, and innovation for PPPs, collaborating with the DoF to establish comprehensive accounting and budgeting policies to facilitate investment opportunities and further elevate Abu Dhabi’s standing as a hub for innovative public-private collaboration.