Dubai Authority to Finance Maritime Sector's Growth

Dubai Maritime City under construction (file image)

By The Maritime Executive 05-25-2017 02:20:34

The government of Dubai's maritime industry development arm, Dubai Maritime City Authority, is considering a $1 billion investment fund to provide financing to local shipping businesses. 

The DCMA fund, first reported by Reuters, is said to be in a conceptual stage of development. Its loans would support newbuilding orders and large business transactions like IPOs and acquisitions, and would likely be underwritten by the government of Dubai. 

The fund may be motivated in part by the opportunity to purchase the product tanker arm of United Arab Shipping Company, which is merging with Hapag-Lloyd. UASC is looking to sell its United Arab Chemical Carriers (UACC) division as part of the terms of the M&A agreement. More broadly, the fund would address a shortage of shipping finance options for UAE shipowners, who have reportedly had difficulty finding loans now that the major global shipping banks have pulled back on lending activity.

Dubai Maritime City Authority (DMCA) executive director Amer Ali notes that Dubai is now ranked at number five on DNV GL's list of global maritime capitals, thanks in part to its legal system, its business-friendly environment and its world-class port and logistics facilities. (Dubai is the home of global port operator DP World, formerly known as Dubai Ports World.)

DCMA has launched a variety of initiatives that are intended to strengthen Dubai's maritime sector, including a maritime training center and a "creativity lab" platform for the exchange of innovative practices. The authority will be taking part in Nor-Shipping 2017 as part of its efforts to raise the profile of Dubai's maritime sector and underline its position as a global maritime hub. It will focus on the emirate of Dubai's Maritime Sector Strategy (MSS), which aims to build on Dubai’s position as one of the world's top maritime capitals.