Four informed sources have reported that Abu Dhabi is on the verge of purchasing a stake in a major Turkish port, indicating closer ties between the UAE and Turkey following significant geopolitical disagreements. According to two of the sources, Abu Dhabi Ports, a state-owned group, is expected to invest in a venture established by the Turkish wealth fund to manage the Izmir port on the Aegean coast. The sources requested anonymity to discuss details of the yet-to-be-finalized agreement.
The exact size of the stake remains unclear, but one source indicated that the deal's value is approximately $500 million. An official from the Turkish wealth fund declined to comment. Meanwhile, Abu Dhabi Ports has not responded to a request for comment, and attempts to reach (ADQ), the sovereign wealth fund of the emirate that holds a majority stake in Abu Dhabi Ports, were unsuccessful.
This potential deal comes as the Turkish government seeks to attract foreign investments to accelerate its pivot away from unconventional economic policies that have led to sharp inflation and a significant depreciation of the local currency. Ports play a crucial role in the strategic transformation of manufacturing operations worldwide, especially after the COVID-19 pandemic exposed vulnerabilities in supply chains. Increased geopolitical tensions globally have also prompted companies to relocate production closer to sales markets.
Turkey hopes that a vigorous monetary tightening, characterized by significant interest rate hikes that began in June, will lure foreign investors back after years of their outflow, which included foreign direct investment. Some Western investors are beginning to return and explore the market situation.
Turkish President Recep Tayyip Erdoğan met with UAE President Sheikh Mohammed bin Zayed Al Nahyan on the sidelines of the COP28 climate conference held in Dubai. The National Security Advisor, Sheikh Tahnoon bin Zayed Al Nahyan, who is also the brother of Sheikh Mohammed, heads ADQ.
Turkey and the UAE began to mend their relations two years ago after a bitter dispute primarily rooted in ideological differences that led the two nations to support opposing factions in conflicts in the Middle East and North Africa. Emirati officials have since stated that they see substantial investment opportunities in Turkey, particularly in the energy and logistics sectors. Earlier this year, DP World, a state-owned giant, acquired a majority stake in a Turkish port. The UAE and Turkey also signed a free trade agreement in May aimed at facilitating investment.
