Dinkic signs preliminary agreement with the Emirates - Al Dahra to invest EUR 200 million in agriculture

On behalf of the Serbian government, Finance and Economy Minister Mladjan Dinkic signed a preliminary agreement on investment in agriculture between the Republic of Serbia and the UAE with the Al Dahra company in Abu Dhabi on January 13th, the Finance Ministry said in a release.

According to this preliminary agreement, the Emirates' leading agroindustrial company Al Dahra is going to invest about EUR 200 million in eight state-owned agricultural farms under a joint investment project.

Al Dahra will invest EUR 100 million in the construction of irrigation systems and the procurement of modern equipment, whereas additional EUR 100 million or so will be used to acquire the 80-percent stake in joint ventures, a 20-percent stake in which will remain in the possession of the state.

Thanks to this arrangement, Serbia's agricultural sector will obtain investors that currently have the biggest capital at their disposal in the world, and capital and up-to-date agricultural practices are exactly what fertile land in Serbia has been needing for decades to give maximum yields, reads the release.

Aside from boosting the capacity of agricultural companies, this company will also hire local farmers as collaborators because it intends to export surplus products by using its trade network spanning a large number of countries.

At the same time, the company from the United Arab Emirates also intends to invest in the construction of logistics centers to facilitate the export of agricultural products, but primarily in the construction of brand new port facilities in Pancevo.

In that way, the export and marketing of our agricultural products abroad will be substantially improved, and so will the farmers' standard, which will lead to the acceleration of economic growth and an important improvement of Serbia's foreign trade balance.

The partner from Abu Dhabi is bound by this preliminary agreement to invest EUR 100 million in agricultural engineering development and the construction of complete irrigation infrastructure on an area spanning about 14,000 hectares, which is either owned or rented by agricultural farms that are the subject of aforementioned joint investment. Al Dahra also plans to invest in the construction of new food processing factories.

Serbia and the UAE also signed a double taxation avoidance agreement in Abu Dhabi on Sunday.

This agreement was signed by UAE Finance Minister Obeid Humaid Al Tayer and Serbian Finance and Economy Minister Mladjan Dinkic.

Dinkic also met with Muhamed Saif Al Suvaid, director general of the Abu Dhabi Development Fund.

The two reached an agreement in principle on the allocation of substantial additional funds from the Abu Dhabi Development Fund to Serbia for the modernization and construction of irrigation and drainage infrastructure all around the country.

Part of the proceeds from the Fund should also be used to finance long-term favorable loans to Serbian farmers for the procurement of new agricultural engineering equipment, primarily individual irrigation systems that should help them increase production and yields in crop farming, fruit and vegetable growing.

It is needless to mention the importance of modern irrigation systems for the development of Serbia, especially when having in mind an unprecedented drought that hit our country last year and climate changes bringing hot summers or heavy rains, which imposes a growing need for efficient irrigation and drainage systems.

The two sides also agreed that a delegation of the Abu Dhabi Development Fund should visit Belgrade within the next few weeks to resume talks about the details of this agreement.

Dinkic also had a successful meeting with the management of the Mubadala company, one of the largest investment companies in the Gulf and an extremely important player in the global IT market.

This company owns three factories for producing semiconductors in the USA, Singapore and Germany, which generated a USD 4.6 billion revenue in 2012.

As Dinkic and Mubadala CEO Valid Ahmed Al Mokarab agreed, an expert team of this company will analyze in detail the possibility of building a factory for producing semiconductors (chips) in Serbia that would use the latest high technology and recruit about 1,000 top local engineers, which would require an intensive cooperation with faculties of natural sciences and engineering in Serbia. The estimated value of this investment is about USD 4 billion, reads the release.