UAE foreign direct investment in Brazil and South Korea: Key details inside

In a recent development, UAE’s sovereign investment fund Mubadala Capital has announced a sizeable $13.5 billion investment in the biofuels sector of Brazil – a key bioethanol producer, contributing one-fifth of the total global output.

The initiative is part of a broader strategy for Brazil and also includes the construction of five processing units, each valued at $2.7 billion and capable of producing 20,000 barrels of biofuel every day. The first unit is expected to start operations by 2026.

Mubadala CIO Oscar Fahlgren, also the head of the entity’s Brazilian operations, said: “It is all about feedstock [which] in reality is agriculture … Brazil is probably the best-placed country … when it comes to agricultural proficiency because of the climate and the fertile soil.”

Mubadala Capital to open stock exchange in Brazil

The planned biofuel investment will also be used to convert an existing oil refinery in Bahia into a biofuel facility. Despite recent challenges such as gasoline subsidies, financial concerns and sugarcane crop issues, Brazil’s biofuel industry continues to sustain robust production.

The roots of ethanol’s integration into Brazil’s automotive sector trace back to the 1973 OPEC embargo, that elevated oil prices and crippled the country’s energy security as it significantly relied on imports. The then-government later launched a major policy initiative.

Besides the aforementioned plans, the UAE sovereign investment firm also seeks to open a stock exchange in Brazil in 2025 through its Americas Trading Group. “We are bullish on the investment climate in Brazil right now and the opportunities we see,” added Fahlgren.

UAE-Korea partnership gets a major boost

In response to its mid- to long-term plans to spread $30 billion across strategic sectors including nuclear energy, defence and clean energy of South Korean economy, the UAE is set to invest a maximum of $1 billion in the country’s startups via a joint venture.

UAE-based venture capital firm AIM Global Foundation and Seoul’s LB Investment are ready to set up a joint venture by attracting Emirati institutional investors, as per reports. The latter, a leading VC firm, will manage the JV’s portfolio for Korean Ventures.

LB Investment has invested in BTS agency HYBE Co, Chinese dating app Tantan, game developer Pearl Abyss and many unicorn companies. Since its foundation, the firm has been prominent as one of the best and most active fund managers in the country.

The latest announcement has added fresh air to the UAE-Korea partnership, which has long focused on mega agreements for construction and energy projects in the Middle East. The $30 billion-investment plan came during the Korean President’s visit in 2023.

LB Investment’s Chief Executive Park Kiho spoke on Tuesday at the AIM Congress being held in the UAE capital, one of the largest investment forums in the Middle East – becoming the first person from a Korean VC firm to speak at an opening session of the Congress.