China in US$ 2 billion UAE development deal

China State Construction Engineering Corp (CSCEC) has signed an agreement with Abu Dhabi, UAE, investment company Aabar that will see it invest US$ 2 billion to develop real estate projects in the emirate.

The Industrial and Commercial Bank of China (ICBC) will provide the funding, while CSCEC will be the contractor for the project, which includes the construction of hotels, office buildings and high-end residential buildings in Abu Dhabi.

In return, Aabar - a subsidiary of International Petroleum Investment- will repay ICBC through the revenue it gets from oil trading.

The agreement comes after a report from Standard Chartered last month said high oil prices were having a direct impact on growth in oil exporting countries in the Middle East, funding renewed investment in infrastructure, particularly in the UAE and Saudi Arabia.

The MENA Focus report estimated there was a potential project pipeline of US$ 172 billion in Gulf Co-operation Council (GCC) countries this year.