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Dubai World Puts Africa Projects on Hold

The firm said it has delayed six of eight planned tourism developments in Rwanda worth $230 million first announced in October 2007. Rwanda is a small landlocked country in the Great Lakes region of east-central Africa, bordered by Uganda, Burundi, the Democratic Republic of Congo 
and Tanzania.

“Dubai World has put on hold a number of projects until the market improves, including some tourism projects in Africa and elsewhere,” a spokesperson for Dubai World said.

Khaleej Times tried to get more information about the other projects put on hold, but the company declined to give any details beyond its 22-word statement. In 2007, Dubai World announced it would invest approximately $230 million in eight tourism facilities in the Republic of Rwanda, including luxury hotels; a residential golf course development; residential, high-end eco lodges; and the 1,080 square kilometre Akagera National Park.

Once mooted as a key market for the company, Dubai World set up an African unit with a $1.5 billion capital fund to tap investment opportunities, ranging from ports to hospitality and real estate, in the largely untouched continent. One of Dubai World’s first investments in the hospitality sector was the $1.2 billion purchase of the Victoria & Alfred Waterfront retail and leisure complex in Cape Town in 2006.

Africa could suffer if other Arab investors follow Dubai World’s example and hold plans because of the poor global economic climate. Oil-rich Gulf investors have pumped at least $15 billion into sub-Saharan Africa since 2007, according to the Dubai-based Gulf Research Centre.

Riskier investments in Africa have been sacrificed at least temporarily while Dubai World tackles problems at home. The ports and property group faces challenges to revamp operations and finances before the end of the year when a $3.5 billion Islamic bond for its subsidiary Nakheel matures.

Nakheel has been hit hard by a near 50 per cent drop in property prices in the emirate. The company is also at the centre of unease over Dubai’s ability to repay billions of dollars in debt and is entangled in a growing number of disputes over unpaid bills to foreign contractors. “Dubai World is currently facing some challenges with the financial crisis, which is affecting a lot of private companies,” Clare Akamanzi, deputy Chief Executive Officer at Rwanda Development Board said.

By the end of last year, Dubai World Africa’s investment in the continent’s hospitality sector included 15 hotels in seven different countries, and agreements for new hotel developments in four other African states. Dubai World is continuing with two projects, Akamanzi said — the redevelopment of a lodge in Kinigi, near Volcanoes National Park, which is home to one of the world’s last mountain gorilla bands, and an eco-lodge at Nyungwe Forest National Park. During the initial months of the global financial crisis, Gulf investors remained committed to pouring billions of dollars into sub-Saharan Africa and were particularly interested in ports, agriculture and telecommunications .

· abdulbasit@khaleejtimes.com

· With inputs from agencies