Abu Dhabi’s L’imad is leading the Zero Hormuz push to route trade around the strait

Abu Dhabi’s newest wealth fund is set to become the main vehicle for routing the emirate’s trade around the Strait of Hormuz. L’imad Holding is likely to spend USD tens of bns on new port infrastructure outside the strait, focused on Fujairah on the Gulf of Oman, Bloomberg reports, citing people it says are familiar with the matter. The emirate calls the strategy “Zero Hormuz.” L’imad has already moved to take AD Ports private, saying the group’s next phase would be “complex, capital-intensive and long-term.”

Abu Dhabi doesn’t want to foot the bill alone: The emirate is looking outward for third-party capital, the sources tell Bloomberg, which is why the USD 30 bn infrastructure partnership with BlackRock’s GIP, Temasek, and Adnoc matters, and why L’imad Capital is preparing to raise third-party money as early as next year.

Exporters are already shifting east: Emirates Global Aluminium (EGA) signed an agreement with Gulftainer to ship up to 250k tons of aluminum in the first year and as much as 300k tons in the second from the UAE’s east coast, the company said in a statement. However, EGA has said shipments won’t return to pre-strike levels until the strait reopens, though other corridors will reduce its reliance on the waterway over time. AD Ports and Borouge agreed in May to explore an alternative petrochemicals export hub on the east coast, and Gulftainer announced a USD 2 bn investment across Khor Fakkan and inland infrastructure in July. The company says it could absorb up to 90% of UAE container demand if Hormuz is blocked again.