UAE, US to invest $2.3 billion in India under the framework of I2U2

The United Arab Emirates (UAE) will invest $2 billion (about Rs 15,500 crore) in India to develop a series of integrated food parks, while the United States (US) will set up a hybrid renewable energy project in Dwarka, Gujarat, with an investment of $330 million (about 2,500 crore) under the framework of I2U2. This was announced by the leaders of the four-nation grouping – comprising India, Israel, the UAE, and the US — as they held their first virtual summit on Thursday.

Participating in the meeting, Prime Minister Narendra Modi said I2U2 had set a positive agenda right from the first summit. “We have identified joint projects in many areas, and have also prepared a road map to move forward in them. By mobilising the mutual strengths of our countries — capital, expertise and markets — we can accelerate our agenda, and contribute significantly to the global economy,” he said.

I2U2 was conceptualised during a meeting of the foreign ministers of the four countries in October last year.

Touted as the West Asian Quad, I2U2 has agreed to increase joint investment in six critical areas: water, energy, transportation, space, health, and food security. Indian Foreign Secretary Vinay Kwatra, however, brushed aside the Quad comparison, holding that the principal intention of the grouping was to mobilise private sector capital and deploy it for many areas of economic cooperation.

A NEW BOND

• I2U2 conceptualised during meeting of the foreign ministers of the four countries held in October last year
• US President Joe Biden said the group will identify new infrastructure projects to invest in and develop together
• Food parks may come up in Gujarat and Madhya Pradesh, focusing on food items such as bananas, potatoes, rice, spices and onions

While the food parks will incorporate climate-smart technologies to reduce food waste, conserve fresh water, and employ renewable energy sources, the hybrid renewable energy project, consisting of 300 megawatts (MW) of wind and solar capacity complemented by a battery energy storage system, is expected to help India establish itself as a global supply chain hub in the renewable space.

US President Joe Biden in his intervention said while the food parks had the potential to sustainably increase India’s food yields threefold in just five years, the hybrid renewable energy project with battery storage system was going to help India reach its climate and energy goal of 500 megawatts of non-fossil fuel capacity by 2030. “Over the next few years, this group is going to work to identify new infrastructure projects that we can invest in and develop together. This meeting is just a first step, a chance to demonstrate the value of this new format for cooperation between our four nations,” he added.

The $2-billion investment in food security projects will come from the UAE while the American and Israeli private sectors will lend their expertise and offer innovative solutions, contributing to the overall sustainability of the project. “These investments will help maximise crop yields and, in turn, help tackle food insecurity in South Asia and the Middle East,” a joint statement of the I2U2 group said.

Kwatra told reporters that the food corridors might come up in Gujarat and Madhya Pradesh focussing on food items such as banana, potato, rice, spices and onions.

The $330-million investment in clean energy projects will be funded by the US Trade and Development Agency, while the UAE-based companies are exploring opportunities to serve as critical knowledge and investment partners.