FEWA privatisation plans

The UAE Cabinet has approved a move that will privatise assets belonging to the Federal Electricity and Water Authority (FEWA).

The UAE Cabinet has approved a move that will privatise assets belonging to the Federal Electricity and Water Authority (FEWA).

The privatisation of the country's utilities sector will allow investors from the private sector to get involved in the production and distribution of water and electricity in the UAE, according to the official WAM news agency. FEWA, part of the UAE Federal Government, supplies water and electricity to areas within the Northern Emirates.

The move is part of restructuring plans that were discussed by the UAE Cabinet at a meeting in October presided over by HH Sheikh Mohammed bin Rashid Al Maktoum, vice-president and prime minister of UAE and ruler of Dubai. It marks a major shift from the tradition of owning and managing the state's assets towards allowing private participation. Most of the power and desalination plants in the Emirate of Abu Dhabi have already been privatised, but the rest of the country is still to follow suit.

"The Cabinet approved an amendment to Federal Law No 31 for 1999 regarding the establishment of FEWA, adding an article that allows private investors to invest in the production and distribution of electricity and water in the country," read a statement.

The Cabinet's decision comes following a call by the International Monetary Fund (IMF) earlier this month for the UAE to list its "quasi-public" companies on the markets and to go ahead with enacting the draft securities law.

"[IMF directors] encourage the listing on the equity market of large quasi-public enterprises, and promote an increased role for institutional investors in the markets," a report from the global financial watchdog said. "Such measures would strengthen investor confidence, reduce market volatility and deepen the UAE's capital markets."

The UAE Federal Government could allow private participation either through an initial public offering (IPO) or by selling stakes to private investors. Further announcements are expected.

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