Novaar Capital Management SPC on Thursday announced the creation of a joint venture with JSC Ural Industrial-Ural Polar - a company owned by state institutions of the Russian Federation - to facilitate foreign direct investment in the natural resource-rich Urals region of the country. Novaar, a Saudi-led investment concern, in cooperation with preferred strategic partners, will invest through the newly-formed joint venture in designated infrastructure projects throughout the Urals Federal District. The Ural Federal District, described by some as “Russia's Klondike of raw materials,” represents 92 percent of all Russian gas production, 66 percent of all oil production and 45 percent of all ferrous and 42 percent of all non-ferrous metals. However, most of these assets remain “in the ground” awaiting the development of specialized regional infrastructure to best allow for the efficient exploitation, processing and transportation of these precious resources. Ural Polar has been tasked to transform the industrial and economic infrastructure of the Urals region - a part of Russia that contains 11 million people and accounts for 19 percent of its current industrial output - by modernizing its economy, increasing its power generation capacity, and transforming its inter and intra-regional transportation links. The JV announcement follows the recent meeting between the founder of Novaar, Prince Saud Bin Mansour and the Presidential Envoy to the Urals Federal District, Nikolai Vinnichenko at which a Memorandum of Understanding was signed. David Mapplebeck, chief investment officer of Novaar, said: “Novaar is delighted to support the development of the Urals Federal District by providing investment capital and its team's expertise to the Ural Polar mega-project. We look forward to working together with the Ural Polar team to implement their vision and demonstrate how private capital from the GCC can work with Russian State organizations to the benefit of all.” Initially, the joint venture will concentrate on developing the transportation and power generation infrastructure of the region, including the 354 kilometer Salekhard-Nadym railway line, which should enable the more efficient conduct of freight movements from Europe to Eastern Siberia. The construction of the railways, associated power generation facilities and electricity transmission will provide further impetus to the development of the region's natural resources and energy sectors. Vinnichenko said: “While the investment landscape in Western Europe is well known to Gulf investors, we believe this partnership reinforces the fact that there are meaningful investment opportunities available, not only within the Urals Federal District, but more broadly within the Russian economy at large.” He added that “the continued development of the Urals Region is a high priority for the Federation.” In total, the Ural Polar projects are estimated to require investment of over 831.2 billion rubles ($27.7 billion) over the coming years, with three-quarters expected from private investment sources. The Russian Investment Fund has already committed 126.8 billion rubles ($4.2 billion) to Ural Polar. The project is one of the largest public-private partnerships in the world, with many of Russia's largest companies, including TNK-BP, Lukoil and SIBUR expected to participate as both operating and strategic partners.
