UAE company to fund $2bn New Botswana City

The Botswana Development Corporation (BDC) has signed a deal valued at around $2 billion with Dubai-based Albaddad Group to build a mixed-use urban development in the southern African country, its managing director, Oteng Keabetswe, has said.

The project is part of the African nation’s plan to attract foreign investment and increase private sector participation in major developments.

“Our capital is currently drying down as liquidity squeezes in the market,” he said in a social media post.

The planned New Botswana City, covering 124,000 square metres, comprises the Albaddad Botswana Global Exhibition and Trade Centre, a retail boulevard, five hotels and residential developments, Keabetswe said.

The first phase of the project is the trade centre, he said, adding that Albaddad will fully finance the entire development.

“Our role as BDC was to advance our land into the project. Our land is currently valued at nearly 200 million Pula ($15 million), so our contribution is 0.07 percent of the total project cost,” he said.

However, BDC will hold a 5 percent stake in the project, seeking to increase it to 26 percent over time.

Albaddad, through its balance sheet, has been able to mobilise global capital to fund the project, Keabetswe said.

Specific details on the project’s segments were not given.

Albaddad operates in more than 50 markets across the Middle East, Africa, Asia, Europe and the US, according to its website.

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Meanwhile, Botswanan President Duma Boko told Bloomberg that the government is holding discussions with the UAE and Oman, seeking their backing to acquire a “strategic” stake in diamond producer De Beers from the UK-headquartered Anglo American Plc.

Anglo American is shortlisting bidders for the sale of its 85 percent holding in De Beers.

“We are looking at reliable, trusted partners. The Omanis and the UAE have now claimed that spot,” he said.

Botswana’s economy has been hit by the drop in global diamond prices as consumers opt for more lab-grown stones. Diamonds account for 80 percent of the nation’s total exports and a quarter of its domestic gross product.

Botswana already holds a 15 percent stake in De Beers, the report said.