A major new investment commitment announced during President Sheikh Mohamed bin Zayed Al Nahyan’s (pictured) state visit to Berlin signals a deeper economic relationship between two countries looking for reliable partners in an increasingly uncertain world.
The United Arab Emirates has announced plans to invest an additional €40 billion in Germany, one of the most substantial signals yet that the economic relationship between Europe’s largest industrial economy and the Gulf state is entering a new phase.
The commitment, announced during President Sheikh Mohamed bin Zayed Al Nahyan’s state visit to Germany, will target sectors including industry, advanced technology, artificial intelligence, digital infrastructure and energy. Of the total, €10 billion is set to be invested in the German state of Bavaria.
The headline figure is striking. But its significance goes well beyond the amount involved.
The UAE has already invested around €34 billion in Germany. The new commitment therefore represents not simply another large capital allocation, but an attempt to deepen a relationship increasingly built around the industries and technologies that both countries see as central to their future competitiveness.
As Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Envoy of the Minister of Foreign Affairs to Germany, put it: “The UAE invests for the long term and builds partnerships that endure.”
For Germany, the fresh injection of long-term capital arrives at an important moment.
The country has formidable strengths in engineering, manufacturing, chemicals, industrial technology and applied research. Yet maintaining that industrial position is becoming ever-more expensive. Artificial intelligence, digital infrastructure, advanced manufacturing, energy systems and industrial decarbonisation all require substantial investment at a time when German companies are also confronting higher costs, geopolitical uncertainty and growing international competition.
The UAE brings a different set of strengths: investment capacity, energy expertise, digital infrastructure and commercial connections across the Gulf, Asia and Africa. The logic of the partnership is therefore not simply that one country has money while the other needs investment. It is that their economic capabilities are increasingly complementary.
This synergy is reflected in the sectors identified for the new commitment. Rather than focusing narrowly on established assets, the investment is intended to support areas expected to shape industrial competitiveness over the coming decades.
Al Jaber said the intention was to support “the industries, technologies and skilled jobs that will drive future growth and competitiveness”, while strengthening energy security and supply chains and helping German companies continue to grow internationally.
That last point matters because the relationship works in both directions.
Germany gives Emirati investors access to one of the world’s deepest industrial and technological ecosystems. German companies, meanwhile, increasingly see the UAE not simply as a domestic market but as a platform from which to reach faster-growing economies across the Middle East, Africa and Asia.
The two countries’ economic relationship has already strengthened significantly in recent years, with a number of notable examples of cooperation. Emirati investment has reached sectors including chemicals and offshore wind, while leading German companies have become increasingly embedded in the UAE economy, with bilateral trade worth more than €13 billion last year, an increase of 15% compared to the previous year.
The new €40 billion investment marks a significant new phase of this deepening relationship, and the timing of the announcement also gives it a wider geopolitical significance.
German President Frank-Walter Steinmeier captured the mood during the state visit when he observed that “the world has become a more turbulent place; old certainties are crumbling.” Against that backdrop, he argued that reliable and rational partners mattered more than ever, telling Sheikh Mohamed: “Germany is that kind of partner for you; you are that kind of partner for us.”
Those comments go to the heart of why Germany and the UAE’s economic relationship now matters far beyond the balance sheet.
Russia’s invasion of Ukraine exposed the risks created by concentrated energy dependencies for Germany and countless other countries in Europe and around the world. Conflict in the Middle East has again demonstrated the vulnerability of trade routes, energy markets and supply chains. Global competition over AI and other critical technologies has made industrial capacity a highly strategic question as well as an economic one.
Both Germany and the UAE have reasons to diversify their partnerships in response.
Germany needs capital, energy relationships, technology partnerships and access to growing markets. The UAE is seeking to diversify an economy historically built around hydrocarbons while deepening its position in advanced technology, industry and global investment.
The €40 billion investment is a powerful statement of intent and a reaffirmation of a long-standing partnership between the two countries that could transform their industrial and technological strategies for years to come.
