DP World to Invest as Much as $2 Billion in Russian Ports

The Wall Street Journal, 20.01.2016

Dubai-based ports operator DP World agreed to invest as much as $2 billion in Russia after forming a joint venture with the state-owned Russian Direct Investment Fund.

DP World operates more than 65 marine terminals across six continents. It will own 80% of the joint venture and the Russian fund will own the rest, according to Kirill Dmitriev, chief executive of the Russian Direct Investment Fund, or RDIF.

The partnership will invest in existing ports and build new facilities including a deep-water port at Taman on the Black Sea, according to Mr. Dmitriev. DP World's expertise is crucial to the project, he said. Taman is located a few miles from Crimea, which Russian President Vladimir Putin annexed from Ukraine in 2014.

"It will be a major infrastructure project for Russia," Mr. Dmitriev said in an interview. "It will receive very big boats."

A DP World spokeswoman said the company is looking at "different opportunities" in Russia.

The $10 billion RDIF was created in 2011 to attract sovereign-wealth funds, companies and private-equity firms to invest alongside it in Russia. The RDIF has mainly been signing agreements with Asian and Middle Eastern partners since U.S. and European governments imposed sanctions to restrict business between Russia and Western companies in 2014, after the annexation of Crimea.

Saudi Arabia last year agreed to invest $10 billion in Russia alongside the fund. Earlier this month, a joint venture between the RDIF and China Investment Corp., a Chinese sovereign-wealth fund, bought a 23.1% stake in Detsky Mir Group, Russia's largest retailer of children's toys and goods.

The agreement with DP World is RDIF's first with a Middle Eastern company that isn't a fund manager. The RDIF has teamed up with operating companies before. In 2013, it joined with U.S.-based tire maker Titan International Inc. to buy Russian agricultural and industrial tire manufacturer Voltyre-Prom.

"We are co-investing with them as we are co-investing with other partners," Mr. Dmitriev said.