Novaar in major Russian joint venture
Riyadh, December 24, 2009
Dubai-based Novaar Capital Management has announced a joint venture with Ural Polar, an entity owned by state institutions of Russian Federation, to facilitate foreign direct investment in the natural resource-rich Urals region.
Novaar is a sovereign-affiliated private investment office commissioned by members of the royal family of Saudi Arabia.
The announcement follows the recent meeting between Novaar founder Prince Saud bin Mansour FS Abdul Aziz Al Saud, and the presidential envoy to the Urals Federal District, Nikolai Vinnichenko where several investment projects were discussed and a MoU was signed.
The Ural Federal District, described by some as 'Russia's Klondike of raw materials,' represents 92 per cent of all Russian gas production, 66 per cent of all oil production and 45 per cent of all ferrous and 42 per cent of all non-ferrous metals.
Novaar, in co-operation with preferred strategic partners, will invest in designated infrastructure projects throughout the Urals Federal District through the newly-formed joint venture, said a top company official.
'Novaar is delighted to support the development of the Urals Federal District by providing investment capital and its team's expertise to the Ural Polar mega-project,' stated David Mapplebeck, chief investment officer of Novaar.
However, most of these assets remain 'in the ground' awaiting the development of specialized regional infrastructure to best allow for the efficient exploitation, processing and transportation of these precious resources, he pointed out.
'We look forward to working together with the Ural Polar team to implement their vision and demonstrate how private capital from the GCC can work with Russian State organizations to the benefit of all,' he added.
Initially, the Joint Venture will concentrate on developing the transportation and power generation infrastructure of the region, including the 354 km Salekhard-Nadym railway line, which should enable the more efficient conduct of freight movements from Europe to Eastern Siberia.
The construction of the railways, associated power generation facilities and electricity transmission will provide further impetus to the development of the region's natural resources and energy sectors.
Commenting on the venture, Vinnichenko said, 'While the investment landscape in Western Europe is well known to Gulf investors, we believe this partnership reinforces the fact that there are meaningful investment opportunities available, not only within the Urals Federal District, but more broadly within the Russian economy at large.'
The Ural Polar projects are estimated to require investment of over 831.2 billion Roubles ($27.7 billion) over the coming years, with three-quarters expected from private investment sources, he pointed out.
The Russian Investment Fund has already committed 126.8 billion Roubles ($4.2 billion) to Ural Polar.
He described the project as one of the largest public-private partnerships in the world, with many of Russia's largest companies, including TNK-BP, LUKOIL and SIBUR expected to participate as both operating and strategic partners.-TradeArabia News Service