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Mubadala invests in A$6.4b Australia urea project

The plant will address the rising demand for high-quality fertilisers

Published: Tue 7 May 2024, 4:21 PM

By
Issac John

Mubadala Investment Company, the Abu Dhabi sovereign investor, has announced an investment alongside Global Infrastructure Partners in Perdaman’s A$6.4 billion Western Australia Urea project, the largest such plant in Australia and one of the largest urea fertiliser facilities in the world.

The new investment, which is in line with the wealth fund’s target of doubling its exposure in Asia by 2030, represents the largest investment ever made in the Australian fertiliser industry, with the facility expected to produce more than two million tons of urea per annum.

The plant will address the rising demand for high-quality fertilisers, reduce Australia’s reliance on imports and support the provision of food security for up to 90 million people, the sovereign investor said in a statement.

Saed Arar, executive director of Traditional Infrastructure, Mubadala, said the wealth fund is delighted to diversify its growing portfolio with the investment into Perdaman’s world-class urea project in Australia.

“The investment aligns with Mubadala’s responsible investing mandate, supporting national and regional food security ambitions while reducing the carbon footprint of urea production. Building on our long-standing relationship with Global Infrastructure Partners, we are excited to support Perdaman on its impressive and sustainable growth – with a focus on delivering projects that bring benefits to local communities and mitigate the impact of climate change,” Arar.

Mubadala said the plant will incorporate the latest technology to ensure optimised energy efficiency and low emissions. “In addition to displacing the import of coal-based urea, the plant will adopt clean technologies such as solar energy and green hydrogen to minimise industrial emissions and lower the carbon footprint of fertiliser production, with Perdaman, one of the world’s leading chemicals and fertiliser companies, committed to making the plant net zero by 2050,” it said.

Of the nearly $300 billion in assets under management, Mubadala has only 12 per cent in Asia today. Mubadala, one of Abu Dhabi’s three main sovereign wealth funds charged with helping diversify Abu Dhabi’s economy, wants to move that number closer to 25 per cent by as soon as 2030.

Last month, Mubadala led a Rs10 billion funding round of Avanse Financial Services, India’s education-focused non-banking financial company.

Global SWF, which tracks the world’s sovereign investment funds, said in its 2024 annual report that three SWFs from the UAE invested a combined $36.5 billion in 2023.

Mubadala was ranked third in the top 10 list of SWFs with investments of $17.5 billion, followed by Abu Dhabi Investment Authority (Adia) with investments of $13.2 billion.

According to Global SWF, one of the most active sellers in the past few years has been Mubadala, which divested $122.7 billion between 2018 and 2022, almost the same figure it had invested.

Global SWF expects assets of state-owned Investors, including sovereign wealth funds, public pension funds, and central banks, to reach $54.9 trillion by 2025 and $71.0 trillion by 2030.