opportunities K 2 ey

sectors 2.6.3 2.6.2 2.6.1 2.6 2.5.2 2.5.1 2.5 2.4.2 2.4.1 2.4 2.3 2.2.4 2.2.3 2.2.2 2.2 2.1.6 2.1.5 2.1.4 2.1.3 2.1.2 2.2.1 2.1.1 2.1

Facilities management Property management integrated housingprojects Development planningfor and I Lifestyle medicalclinics Specialty hospitals H centers Institutes andtraining Tertiary education E Waste recycling treatment Oil andeffluent sludge Primary sewagetreatment Solid wastemanagement E Rail transportinfrastructure infrastructure Marine transport Funding –Project finance Desalination plan Power plant–Renewable Power plant-Fuelbased I I downstream ntegrated nfrastructure ndustrial ducation nvironmental ealthcare

urban

oil

development and housing

and chemical

training services

gas

projects

2.12.3 2.12.2 2.12.1 2.12 2.11.1 2.11 2.10.2 2.10.1 2.10 2.9.2 2.9.1 2.9 2.8.3 2.8.2 2.8.1 2.8 2.7.2 2.7.1 2.7 2.6.4

  online portals Application stores and Digital contentcreation Digital mediamarketing marketing C development Web andapplication development IT Budget hotels Branded themepark entertainment T Rail facilitiesmanagement management Airport facilities passenger A Direct salesagent Asset management Private equity and Banking, Warehousing Logistics services Storage Construction contracting ourism, ir, ulture, and

maritime

insurance

software

media and

hotel financial

transport

logistics and

and and

for

rail

services

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 10 11 investment Investing in Kuwait: A guide for Investment Opportunities in Kuwait with leading local players. Kuwait in the digital media and marketing sector. High services Demand 2 Cultu 12. 11. 10. A 9. Dow 3. 2. INFRAS 1. brands Tourist arrivals are A number of projects have been USD then more earmarked has Kuwait with the for opportunities providing rail) and aviation (ports, infrastructure transport water, power, as such international investors.KuwaitisthefirstcountryinregiontoadoptaPublicPrivatePartnership(PPP)frameworkattractforeigndevelopers. sectors in development infrastructure for plan development augment demand Kuwait opportunities diverse sectors Attractive investment opportunities across En W affinity for entertainment and media on digital platforms T ir present plans to double is ou e and solutions Government seeking from consumer v , m developing b ir ns ris

and o ari an opportunity for concepts T r n .B 8. A robust BFSI institutions to offer specialized products and services. Kuwait’s education e 4. global t for R m, hotel expected e, me r me U t

services over e a i in C me its chemical production d an a educational pp focused Kuwait. n TU u financial USD m - t ca dia to grow from k a and R d active private allied 2 in l Se initiated E evelopme c 0 sectors like t international for opportunities considerable presents warehousing and logistics for imports, hub on a reliance as Kuwait’s country with the combined position This, trade. to regional view a with rail and airport ports, across infrastructure transportation its developing is Kuwait Sto 7. affluent, growing population. an to catering clinics lifestyle and hospitals specialty establish to opportunities providing 2013-19) between growth annual (6% 2019 by Bn 1.3 USD reach to expected are investments sector Private GCC. the in expenditure healthcare total largest third the has Kuwait he 5. Bn

g, hem and i sector, proactive and to o property international Kuwait has a pipeline of several large housing projects .I 6. institutions to reach

expenditure of rai the n r financia Bn in the in Bn 103 transport to address the current and future capacity constraints in critical n &t v 306,559 transport a m ica e targeting business l p ic sector teg retail ra lth and facilities management. n ar players. capacity e rainin ass te l m ge s infrastructure is expected to increase from USD 6.8 Bn in 2013 to USD 10.5 Bn by 2019. Kuwait is investors to and banking participation. in 2013 to 491,000 ra n car ket sector. regulatory r t second an and t te e l for ethylene international enrolment levels ain n in s e g d u ge e g such participate Kuwait Development Plan (201 Plan Development Kuwait hou fac travelers. log r along me regime and projects r v as smartphones t ic n and polyethylene providing room tu with IT by rans is sin e t in aviation 2022, creating s across the real estate rin t rising personal and institutional

ics and g p transformation initiatives g po

r s and and

ins oje e r r t need and standards rail tablets and v u which including integrated c ic ranc for greater hotel capacity. Limited 5 t /16 e value s s will

- and high affordability

20 chain including development planning, for international of facilitate increasing passenger transport at the e ) and has earmarked a similar amount for the new five year five new the for amount similar a earmarked has and 19/20) environmental education. u wealth make Government level rban townships. are opening investors segments

d Kuwait an evelopme These projects are augmenting presence to forge partnerships/ strategic alliances new such as attractive destination seeking markets and of international sanitation provide construction to attract leading n demand activity t opportunities business and waste management in for web-enabled IT budget contracting the for international opportunities country hotel for and and the publictransportationsector. respectively areintegralpartofKuwait’splantoupgrade network, withprojectvaluesofUSD The developmentofanationalrailwayandmetro likely topromotegrowthofprojectfinanceinKuwait. Private sectorinvolvementininfrastructureprojectsis desalination capacity. and drivedemandforexpansionestablishmentofnew expected toputincreasedpressureondesalinationfacilities Scarcity ofnaturalgroundwaterresourcesinKuwaitis renewable sourcesby2020. at least10%ofitselectricity(orover2,000MW)from energy tomeetgrowingdemand.Kuwaitaimsgenerate The KuwaitGovernmentisconsideringalternativesourcesof leading tolongtermopportunitiesforforeigninvestors. 2025. Theprivatesectorisexpectedtoplayamajorrole, electricity productioncapacitytargetsof25,000MWsetfor 25 Bntomeetthe investment ofapproximatelyUSD The MinistryofElectricityandWater(MEW)anticipatesan service providers. specialized globalconstructioncontractors,operatorsand are planned,presentingconsiderableopportunitiesfor A numberofportexpansionandnewconstructionprojects R FuNDINg –pRojeCtFINANCe s Marin De P P facilities atparwithglobalstandards andbenchmarks. provide specializedfacilitiesmanagement(FM)servicestomaintainKuwait’s airport Kuwait’s initiativestopositionitselfasacommercial hub.There existspotentialto The plannedupgradestoKuwait’s aviationinfrastructure are expectedtosupport 2.1: Infrastructure opportunities for foreign andlocalinvestors Government’s infrastructure planprovide significant Power andtransportbeingthe mainfocusareas ofthe e owe owe ai c sa l t to l r r rans ina e t r

G G ove e e rans t n n i o po e e r n ra ra v r pl po i ew t t t i i infras an o o r n n t t -Re –Fuel infras t n r ew u bas t c r ab 10 BnandUSD tu u e c le r d tu e r e 7

Bn USD Project value USD Fuel-based power production capacity System to increase by over Kuwait National Rail Road Project value 2 -Keysectorsfor opportunities (tendering 10 25

Mn Bn in 10,000 2016) MW by 2025

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 12 13 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Opp Source: KuwaitPower Report,BMI,GCCEnergySector – QuarterlyReview,Zawyaprojects,MEW increasing demandfrom consumers. projects tostrengthen Kuwait’s electricityandwatersupplysituationinor generation inKuwait.TheMinistryofElectricityandWater hasannouncedseverallarge Conventional fossilfuelsare expectedtoremain thedominantfuelmixforelectricity investors toparticipateinKuwait’s powersector. participation throughthePPPmodelcreatingsignificantopportunitiesforinternational meet thisexpectedincreaseinpowerdemand,theGovernmentisinvitingprivatesector isthesoleproducerGovernment anddistributorofpowerinKuwait.However, inorder to the peakloaddemandof12, Demand forpowerinKuwaitisexpectedtogrowatarateof5.7%perannum(p.a)from 2.1.1: PowerPlant-Fuelbased power until2015. next twotothreeyearscatergrowthindemandfor approximately USD2.5Bnofinvestmentproposedoverthe plants inKuwaitisprojectedatUSD25Bnby2025with demand. Theestimatedmarketsizeoffuel-basedpower MW ofpowerisplannedby2025tomeettheexpected 2014 anditisestimatedthatanadditionalcapacityof Kuwait’s powergenerationcapacitystoodat1 international firms. to providesubstantialbusiness opportunitiesforlocaland and watercapacityinthecountry. Theseprojectsarelikely including throughthePPProute,tostrengthenelectricity The MEWhasrecentlyannouncedseveralpowerprojects, Kuwait the PPP Proposed Hybrid Kuwait Kuwait Kuwait Kuwait Kuwait North IWPP - Phase 4 North IWPP - Phase 3 North IWPP - Phase 2 North IWPP - Phase 1 o Power Plant rtunity model KAPP

KAPP KAPP KAPP KAPP KAPP power - Al Khiran IWPP - Al Zour - Al Zour - Al Zour - Al Zour - Al Abdaliya plants o through verview Planned 1,000 g/day 800 MW (power) and 50 million 2,500 280 (desalination) million g/day 1,500 million g/day 1,500 MW MW MW and 125 (desalination) MW MW capacity 8 00 MW (power) (power) (desalination) (desalination) 5,990 MWin and million and in 2013toreach25,000MWby2025.Currently,the 102 102 12,170 g/d

• • • planned developmentoftheindustrialsector. infrastructure projectsbeingundertakeninthecountryand Kuwait’s growingeconomycombinedwithlargescale Demand forelectricityisexpectedtogrowasaresultof has ledtohighelectricityconsumption. Rapid populationgrowthandsubsidizedelectricityprices cooling systems. occurring duringthesummermonthsduetoheavyuseof drivers forpowerusage,withpeakdemandusually Seasonal variationsandextremetemperaturesaremajor der tomeetthe international participationinthissector. and renewableenergysources,highlightingthescopefor Japanese firmstobuildpowerplantsusingalternativefuels MEW hasalsoreceivedoffersfromUS,Europeanand renewable energy. approximately 2,000MW,istargetedtobemetthrough 10% ofthetotalelectricitygenerationby2020,or

Source: KuwaitPowerReport, BMI,GCCEnergySector–QuarterlyReview 2011,ZawyaProject,MEW,KAPP,KISR andKPMGAnalysis opportunities for foreign and local private investors to participate in this sector. The PPP model being adopted by the Government for large projects provide significant to oil would allow Kuwait to conserve its oil for other uses including for export purposes. upgrading the technologies used in power generation. Renewable energy as a substitute The MEW is planning to enhance the efficiency of installed power stations through per day to generate power. and uses an estimated average of 200,000 to 300,000 barrels of oil and refined products spends over USD conservation have led to high per capita consumption of power in Kuwait. The MEW R 2.1.2: PowerPlant–Renewable O ISCC plant at Al-Abdaliya 2,000 MW Al Shaqaya Renewable Energy Project Project Name Renewable sectorprojects ising population, growing consumerism and limited awareness or incentives for energy ppo r tu ni ty ove r 3.5 v i ew Bn per annum to meet the electricity requirements of the country Capacity 280 MW • • • • generation. is anurgentneedtoexplorealternativemeansofpower As Kuwaithasbecomeanetimporterofnaturalgas,there targets ofatleast10%totalpowerproductionby2020. Kuwait Governmenthassetambitiousrenewableenergy energy canfreeupoilforothercommercialuses.The Shifting fromfuel-basedpowerplantstorenewable sources neededtogeneraterenewableenergy. taking advantageofabundantheat,windandsunlight support candriverenewableenergyinitiativesinKuwait, Increased environmentalawarenessandGovernment the saleofgreenhousegasesreductionunits. conserving/environmentally efficientplantstobenefitfrom greenhouse gasescanprovideanopportunityforenergy Ratification oftheKyotoprotocolforcontrolemission 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 14 15 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Opp Source: ZawyaProject, MEW,MeedandKAPP Estimates for water consumption in Kuwait, 2011-2020 in for waterconsumption Estimates Water andPowerPlants(IWPP)through thePPPmodel. all desalinationplantsinKuwait.However, theMEWisseekingtoestablishIntegrated driving Kuwaittoexpanditsdesalinationfacilities.Currently operates theGovernment Continuously increasing demandforwaterandscarcity ofnaturalwaterresources is Plant andSubiyaPlant,tonameafew. several projectstoaddnewcapacity,includingtheAl-ZourSouthPlant,DohaWest (from 410Mnimperialg/din2013 It isestimatedthatwaterconsumptioninKuwaitwillriseto780Mnimperialg/dby2020 513 2.1.3: DesalinationPlant 2014 e 201 2015 2020 410 423 780 Shuwaikh Plant Shuaiba South Plant Doha East Plant Subiya Plant Doha West Plant Al Khiran IWPP Al-Zour North IWPP Plant mn imperial gallons/day mn imperial gallons/day mn imperial gallons/day mn imperial gallons/day 3 o f rtunity f o verview Planned CapacityMnImperial g/d 50 36 42 100 110 125 276 approximately • • • • • consumption. industrial sectorarelikelytoincreasedemandforwater Government-led initiativesforthedevelopmentof have reached44,611imperialgallonsby2015. nearly highest intheworld.Percapitaconsumptionreached Kuwait’s per-capitaconsumptionofwaterisamongthe new desalinationfacilities. high levelsofwaterconsumption,drivingthedemandfor Population growthandrisingurbanizationareleadingto source ofwatersupplyinKuwait. increases dependencyondesalinatedwaterastheprimary The scarcityofnaturalwaterresourcesinthecountry developers, operatorsandinvestors. represent potentialopportunitiesforinternational The plannedandupcomingdesalinationprojects 9.6% y-o-y).Kuwaithasplanned 3 8 ,000 imperialgallonsin20 13 andisestimatedto Opp GCC- Project Finance Market GCC- ProjectFinance high-growth marketforproject finance. Bn are expectedtobeimplementedoverthenext1520years,presenting anattractive, models especiallyincore sectorssuchaspowerandwater. Projects worthoverUSD358 However, adoptingPPP thisscenarioissettochangewiththeKuwaitGovernment Source: IJGlobal in private sectorparticipationininfrastructur 70% oftotalprojectfinancelendingamongGCCcountries.Historically,thelack transactions wereintheutilitiessectorwithKSAandUnitedArabEmiratesattracting were fundedthroughprojectfinanceintheGCC.Over7 Over aperiodofsixyears(2009-2014),overUSD148Bninfrastructureprojects 2.1.4: Funding–Project Finance • • • 2012 29,601 20 2014 2010 24,928 USD 2009 22,164

Mn 28,788 2013 21,745 20,396 banks andotherlongterminfrastructureinvestors. finance, presentingasizeableopportunityforinternational PPP modelisexpectedtogiveriseaneedforproject of theseprojectsunder the Private sectorleddevelopment projects. PPP lawtocreatewiderprivatesectorownershipinlarge The KuwaitGovernmentispursuingprojectsunderthe significant constructionactivity. large infrastructureprojects,whichareexpectedtodrive The KuwaitDevelopmentPlanincludesanumberof Kuwait. 11 o rtunity USD Mn USD Mn USD USD Mn USD Mn Mn o verview e hashindered thegrowth ofproject finance 2 -Keysectorsfor opportunities 2% oftheseprojectfinance

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 16 17 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: CentralStatisticalbureau, ZawyaandMiddleEastEconomic Digest(MEED) enterprises inKuwait. engineeringandconstruction considerable long-termpotentialforinternational development ofnewportsandexpansionworkontheexistingpresent led toseveralglobalcompaniesestablishingdirect regional presence. Theplanned The prioritizationofmarineinfrastructure developmentacross GCCcountrieshas Construction &Engineering 2.1.5: MarineTransport Infrastructure –

project. need fornewmarinefacilities fortheAlZourrefinery construction andengineeringcompaniesinaddition Port aloneconstitute Shuaiba andDoha.Theconstruction the redevelopmentofexistingthreeports-Shuwaikh, developing plansforsixadditionalportsinKuwaitbesides equivalent units)in201 and Shuwaikhhadreached Kuwait’s portvolume O Doha Port Shuaiba Port Shuwaikh Port Bubiyan Island Mubarak Al KabirPort – Kuwait ports ppo r tu ni ty ove s aUSD for thetwoprimaryportsofShuaiba 3. Thegovernmentiscurrently r v 840,149 i ew 4 Bnopportunityformarine Expansion anddevelopment plans handling facilities. of warehousing and cargo ample space for the expansion as the port isendowed with handle more commercial cargo Plans to develop Doha port to Shuaiba port. plan to redevelop and expand 2009 to drawup a master international consultants in Kuwait had invited investment in its infrastructure. Shuaiba Port could see further terminals. allow larger ships to use the of the approach channel to to the deepening and widening are in the pipeline, in addition of enhanced computer systems stacking areas, and installation equipment, redevelopment of New gantry cranes and yard TEUs. will haveacapacity in 3 phases, once port is The development of the new TEUs(Twenty-foot of MubarakAlKabir expected tobeexecuted completed it of 2Mn to the • • • and otherconsumables. from vehicles,electronics,buildingmaterialstofoodstuff translates toadependencyonimportsforitemsranging The limitedlocalproductioncapacitiesacrosssectors and expansionofexistingports. for developmentofnewports,aswellthemaintenance The KuwaitGovernmenthasundertakenmajorinitiatives infrastructure. trade andsupportsthedevelopmentofKuwait’slocalport demographic balancepositivelyimpactsinternational Kuwait’s economicgrowthandfavorablesocio-

disciplinary andintegratedserviceproviders. and metro networksinKuwait.Thesetwoare expectedtorequire specializedmulti- To addressisplanningthedevelopmentofrail thesechallenges,theGovernment activity. additional movementofpeopleandgoodsarisingfrom higherdomesticeconomic infrastructure inorder tosupportKuwait’s increasing populationaswelltoservice Development Plan.There isaneedtosignificantlydevelopKuwait’s transport Transportation infrastructure constitutesamajorarea offocusundertheKuwait Construction, EngineeringandMaintenance 2.1.6: RailTransport Infrastructure – • • • Source: KAPPand Zawya O equipment firms,amongothers. rolling stockmanufacturers,signalingandcommunication engineering servicesproviders,constructioncontractors, for ahostofindustryplayersincludingintegrated Both theseprojectsareexpectedtoprovideopportunities operational by2018. the GCCrailnetwork.Thisprojectistargetedtobecome industrial installationsaswelllinkingthecountrywith integrated railnetworkconnectingKuwait’skeyportand The USD10 Bn. ppo The valueoftheMetroprojectisestimatedatUSD

The projectistargetedtobeoperationalby2020. r tu ni Bnrailwayprojectcomprisesofanew ty ove r v i ew 7 opportunities forspecialized,experienced for “greenarchitecture”theseprojectsandpresents on environmentalsustainabilityindicatestherequirement on anannualbasis.Kuwait’sincreasedfocusandawareness market ofUSD100-150Mnforoperationsandmaintenance of aroundUSD17Bnareexpectedtogenerateanannual The plannedrailandmetroprojects,withacombinedvalue 2 -Keysectorsfor opportunities firms.

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 18 19 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

under-capacity incriticalsegmentssuchassanitationandwastemanagement. isundertakingaseriesofprojectsThe Government toaddress thecurrent situationof gas sectorandanemergingindustrialsector. resources, thefast-growing population,theenvironmental needsofthethrivingoiland long termrequirement ofsafeguarding Kuwait’s naturalenvironment andlimitedland The growth ofKuwait’s environmental servicessectorisexpectedtobedrivenbythe 2.2: Environmental Services s 500,000 to 700,000 Haym Tr Al Umm 500,000 sq.m Expected landarea forthe facility treatment facility - Kabd Planned BOT municipal solid waste c environmental services sector in Kuwait. in keysegments isexpectedtodrivethegrowth of and theneedto address current under-capacity situation Implementation ofstricterenvironmental regulations Capacity (cm/d) e o c e mmence operationsby2019 to at et Plant ment r ove r v i ew a Wse Water Waste n – Ex p ected to waste producedinKuwait. capacity totreatapproximately50%oftotalmunicipalsolid Kuwait Municipality.Theplantisexpectedtohavea will beawardedasa30yearlongtermcontractfromthe project atKabdareaofKuwaitonaPPPbasis.The The KAPPisseekingtodevelopasolidwastetreatment services. effluents increasingthedemandforenvironmentalremedial (KEPA) havedirectedfocustowardstreatmentofindustrial directives bytheKuwaitEnvironmentPublicAuthority significant opportunitiesforoilsludgetreatment.Recent effluents. Kuwait’soilandgasexplorationindustryprovides Sludge treatmentinvolvesofoilorindustrial capacity andenvironmentalissues. is currentlydisposedoffatlandfillsiteswhicharefacing with onlyafewactiveplayers.Mostofthesolidwaste Waste recyclingasaconceptisrelativelynewinKuwait through thePPProute. Most oftheseprojectsareproposedtobeundertaken existing 947,300cm/dto to increaseKuwait’ssewagehandlingcapacityfromthe and initiationofnewprojects.Theseprojectsareexpected addressed throughacombinationofcapacityexpansions The currentcapacityconstraintsareproposedtobe Sol

Eff Was Pri m lue id te Re ar

Was n y Sew t Slu c te y c Mana a l d ge in ge g Tr Tr geme approximately 1,500,000cm/d. e e a a tme tme n t n n t t 04 08 100 80 60 40 20 0 201

(‘000 tonnes) Municipal than 17.1Mntonnesby2019. drive construction activities,increasingpopulationandrapidurbanizationareexpectedto highest intheGCCregion. Factorssuchasstrong growth intheenergysector, growing Kuwait’s solidmunicipalwastegenerationof1.4kg/day per capitaisamongthe Source: Annualstatistical abstract,realtimedelphi.com,KPMG Analysis BRI n d ge kuw 2.2.1: SolidWaste Management waste disposal method waste disposal markets, developed Kuwait vs.other 10,453 1,532 O 547 e ethe c L h ppo n a r R T 4 a gr ecyc o ous m m AIN ai n E annual solidwastegenerationfromanestimated12.5Mntonnesin2014tomore n r an ar d

t i r s c tu f eh tr l 201 ul 11,185 1,578 ill k y l 563 ands ni waste e/c u old t ty ove u ct 5 r om f io al

solid n 2016

p estimates, 2014-2019 11,968 a 1,625 Inc 580 al os r n v d w g e i c ew i

d as ner a f omm

/ rb o te 12,805 201 ther 1,674 598 a a t ge erc io 7 n f

ial 13,702 201 1,724 616 g a 8 rb f , 2019f a ge 14,661 1,776 634 • • • household solidgarbage construction waste.Organicwaste,consistingof inorganic wasteperannum,primarilycomprisingof By 2019,Kuwaitisexpectedtogenerate existing landfills. facilities aswellforremediationofaccumulatedwasteat Opportunities existforestablishingsolidwastetreatment to constituteanother1. untreated wasteatlandfillsites. waste, movingawayfromthepastpracticeofdumping This isexpectedtoencouragebettermanagementofsolid towards strictcompliancewithenvironmentalregulations. The KEPAandtheKuwaitMunicipalityaretakinginitiatives efficiencies. to bringininternationalexpertiseandprivatesector sector intheareaofsolidwastetreatmentwithaview The KuwaitGovernmentisseekingtoinvolveprivate the needforadditionalwastemanagementfacilities. in Kuwait,driving ofsolidwastedisposal method dominant In comparisontoEuropeancountries,landfillsremainthe 2 -Keysectorsfor opportunities 8 and Mntonnesperannum. agricultural waste isexpected 14.6 Mntonnesof

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 20 21 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: MEED, 2.2.2: PrimarySewageTreatment million cm/dwithprivatedeveloperssettocontrolover80%ofthecapacityby2016. be Hayman. By Considerable capacityexpansionisplannedfortheplantsatSulaibiyaandUmmAl (IG) Kuwait’s per population. Inaddition,there are three small-scaleplantsatKhiran,Wafra andFailaka. design capacityofthesefivemajorplantswas947,000cm/d,servicingover98%the at AlJahra,Sulaibiya,Kabd,RiqqaandUmmHaymanareas.In2014,thetotal Kuwait isprimarilyservedbyfivemajorwastewatertreatmentplants(WWTP)located under thePPProutethroughKAPP. Sulaibiya, Jahra Government hasearliersuccessfullyutilizedtheBOTmodelforWWTPprojectsat wastewater, therebycreatingdemand water consumptioncontributeto

facilities forthenext35years. expanding Kuwait’swastewaternetworkandtreatment thestrategyfor Master Planprojectthatseekstodefine private sector.TheGovernmentispreparinganewSanitary (Sulaibiya, UmmAlHaymanandKabd)beingoperatedbythe reach 1.5Mncm/dperday,withallthreeplants The marketsizeofsewagetreatmentplantsisexpectedto WWTPs. construction, operationandmaintenanceactivitiesforthe to participateinthePPPprocessandcarryoutdesign, There existsasizeableopportunityforinternationalfirms O Total Al Khiran Al Jahra Al Riqqa Kabd Umm Al uaby 425,000 Sulaibiya Treatment Plants Waste Water ppo decommissioned. Thetreatmentcapacitywillhaveincreasedbynearly in 201 r

Hayman tu Centralstatisticalbureau andMinistryofPublicWorks ni 3

ty ove and 2016, capita consumptionoffreshwaterreached 947,300 300 65,000 180,000 250,000 27,000 development plans Expansion and is estimatedtoreachapproximately45,000IGby2015.Highlevelsof and KabdwhiletheUmmAlHaymanWWTPprojecthasbeenfloated r the v i ew older plantsatAlRiqqa,JahraandKhiranareplannedto Approx - - - 250,000 500,000 to700,000 600,000 (cm/d) Planned capacity a corresponding increaseingenerationof 1,500,000 for additionaltreatmentcapacity.The • • deficit. with bothenvironmentalpollutionandwaterresource Wastewater reuseisseenasameanstoaddressissues affects thequalityofcoastalwaterandmarinelife. friendly andcontributestowastewaterdischargesthat Desalination, anexpensivepractice,isnotenvironmentally gallons. Umm AlAish)havingestimatedreservesof40billion groundwater islimitedtotworeservoirs(Rawdatainand ground water,desalinationandwaterreuse.Fresh limited rainfall,Kuwaithasonlythreesourcesofwater- In theabsenceofnaturallakesorperennialriversand nearly 38,000imperialgallons 60% to1.5 discharge, there are opportunitiesforspecialistserviceproviders. tighteningregulationsWith theGovernment onadequatetreatment ofeffluents priorto effluents whichusedtobedischargedintopublicsewersystemswithouttreatment. The growth ofthemanufacturingsectorisleadingtoincreased generationofindustrial of oil. prevention ofenvironmental contaminationandpotentialforrecovery 1991. TheKuwaitOilCompanyisundertakingpilotprojects toexplore technologiesfor as aresult ofoilspillsfrom damagecausedtooilwellsbytheretreating Iraqiarmyin pits. Separately, there are around 114square kilometersofoilwellsthatwere created as partoftheoilextractionprocess hastraditionallybeendepositedinlargesludge (bpd) in2014to3.5Mnbpd2021.Theconsiderableamountofoilsludgegenerated Kuwait’s oilproduction levelsare expectedtoincrease from 2.9Mnbarrels perday 2.2.3: OilandEffluent SludgeTreatment Source: Annualstatistical bulletin,2012OPECandFlottweg separationtechnology,technicaldocument, KPMGAnalysis

2011 (Mn gallons/year) f Effluentestimates,2011-2016, 2011 Oil sludge estimates, 2011-2016, (Mn bbl/year) 2011-2016, estimates, Oil sludge O

850 29.1 ppo

2012 r 2012 tu 902 28.5 ni

ty ove

2013 2013

957 29.2

r 2014 e 2014 v i ew 1,015 29.9 e 2015 2015

1,077 30.6 f f 2016 2016 1,143 31.3 f • • issues inKuwait. comprehensive technologysolutionstoaddressthese is anopportunityforinternationalspecialiststobringin reach approximately1,143Mngallonsby2016.There The risingindustrialeffluentvolumesareexpectedto reusable crudeoil. there isapotentialtorecoveraround16Mnbbl/dayof generated peryear.Withthetreatmentofthisoilsludge of approximately36Mnbbl/dayoilsludgewouldbe Mn barrelsperday(bbl/day)by2030,willleadtogeneration Kuwait’s plantoincreaseoilproductioncapacitynearly4 • demand foreffluenttreatmentfacilities. considerably resultinginacorrespondingincrease the amountofeffluentgeneratedisexpectedtoincrease With thegrowthinindustrialandpetrochemicalsectors, demand fortreatmentofsludgeandeffluents. towards conservationoftheenvironmentaredriving heightened awarenessofcorporatesocialresponsibility Increased regulatoryandpublicscrutinycombinedwith stimulus tothedemandforsludgetreatment. recovering crudeoilfromsludgeprovidesadditional Further emergenceoflowcostnewtechnologiesfor 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 22 23 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: Life CycleAssessment (LCA)ofMunicipal SolidWasteManagement intheState ofKuwait *Note: Othersinclude Metals,Glass,Fibers,WoodandPlastic 2.2.4: Waste Recycling typically comprisesmetals,plastics,woodandothermaterials. for 81.3%oftotalsolidwasteproducedbetween2009–2013.Construction Construction wasteisthemajorcontributortosolidincountry,accounting is disposedatlandfillsites,creatingpotentialpublichealthandenvironmentalissues. as (21%) Kuwait producesover32, By Type, 2010-2020 - ‘000 tonnes - ‘000 By Type,2010-2020 Waste Production Solid Municipal Forecasted

O

p 2010 2015 f 2020 f ppo o scrap plasticproducts,flakes,andothermaterials.Theremainingsolidwaste las rg 355 434 420 314 523 1,255 222 662 273 1,050 265 167 r is beingrecycledandusedtoproducevarioustypesofreusableproductssuch a t tu n i c i c ni s ty ove p

r o a v ther per i ew s * 000 tonsof total solidwasteperdayofwhichonly6,700tons • • • • Kuwait’s abilitytorecyclewaste. technological expertiseandexperienceinenhancing privately owned.Thereissignificantpotentialforintroducing of theexistingwasterecyclingcompaniesinKuwaitare estimated atoverUSD350Mninannualrevenues.Most The sizeofthedomesticwasterecyclingmarketis facilities. expected todrivedemandforadditionalwasterecycling Environmental regulationscontrollingdisposalofwasteare plastic. component of growth inpopulation.Organicwasteisthe as comparedwith waste isexpectedtoreach of solidwasteinthecountry.Generationmunicipal Municipal solidwastecomprisesthesecondlargestsource materials arealsodrivingdemandforwasterecycling. Lower manufacturingandenergycostsforrecycled components suchasfibers,wood,glassandpaper. of complexcomponentssuchasplasticandlowervalue there isaneedtoestablishfacilitiesaddressrecycling metals haveattractedinterestfromrecyclingcompanies, While somehighvaluecomponentsofwastesuchas

municipal solidwaste,followedbypaper 2. 1 milliontonsin201

over 2.5milliontonnesin2020 5 onaccountof secondlargest

and polyethylene seek todoubleKuwait’sproductioncapacityforethyleneand participate intheOlefinsIIIandPET/PTAprojectswhich There couldbeopportunityforinternationalinvestorsto Source: BMI,Equate, PIC

turn strengthenKuwait’spetrochemicalsector. Kuwait’s refiningcapacityfromthecurrent936,000b/dtoover 1.5 M n b/dandin upgrade oftheMinaAbdullahandAl-Ahmadirefineriesareexpectedtoincrease The constructionofthe615,000b/dAl-Zourrefinery project, togetherwiththeplanned Kuwait’s productioncapacityfrom7.6Mntonsin201 proposed toundertaketheOlefinsIIIprojectandaPTA/PETincrease Kuwait’s largestpetrochemicals manufacturer, thePetroleum IndustriesCompany, has domestic demandforchemicals. industry primarilyservicesAsianmarketssuchasChinaandIndiawhichhavestrong ethylene, polyethylene,urea, ethyleneglycolandchemicalcatalysts.Kuwait’s chemicals Chemicals constituteKuwait’s secondlargestmanufacturingindustry. Kuwaitproduces driven byincreaseinpolyethyleneandethyleneglycolcapacity. Manufacturing 2.3: Industrial Oil & Gas Downstream Chemicals O Total Ethylene Ethylene Xylenes Urea Ammonia Benzene Polypropylene Polyethylene Ethylene in ‘000 tpa Kuwait petrochemicals sector - chemicals capacity ppo r oxide glycol tu ni ty ove r v i ew 1,000 1,040 1,700 2014e 7,567 765 822 885 370 160 825 10,542 1,600 1,040 1,800 3,100 2019f 765 822 885 370 160 • • • alleviating concernsaroundshortageofgasfeedstock. be usedasanalternativefeedstockforpetrochemicals, are expectedtoincreaseavailabilityofnaphthawhichcan The projectsatAlZour,MinaAbdullahandAl-Ahmadi output. focus onthemanufacturingsectorandincreasingindustrial it isexpectedtoincreasesasaresultofGovernment’s Though domesticdemandforchemicalsiscurrentlylow, manufacturing industryinKuwait. export marketsisexpectedtodrivethechemical Increasing demandforchemicalsinKuwait’skeyAsian 2 -Keysectorsfor opportunities 4 to10.3Mntonsby2016,mainly

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 24 25 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: Ministryoffinance, CBK,CentralStatisticalBureau AnnualStatisticalAbstract201 2.4: EducationandTraining

University CitywhichwillaccommodatethenewcampusofKuwaitUniversity. includes severaleducationfocusedprojectsincludingtheSabahAl-Salem as expected toincreasefromUSD6.8Bnin201310.52019(7.5%y-o-y), development andsocialprogress.Educationexpenditureinthecountryis The 2013-201 Education expenditure: for investment inKuwait’s education andtrainingsector favourable demographics formaconducive environment support,private sectorparticipationand Government s

2019f 2018f 2017f 2016f 2015f 2014e 2013 e a c 10.5 9.8 8.5 9.1 Kuwait Government hasidentifiededucationasakeytoachievingeconomic Kuwait Government 7.9 7.3 to 6.8 result ofsignificantspendinginthissector.TheKuwaitDevelopmentPlan r ove 9 (USDBn) r v i ew global enrolmentlevelsintertiaryeducation. offerings inhighereducation,asKuwaitattemptstoreach to setupbranchesinthecountryandprovideniche to students.Growthpotentialexistsforforeignuniversities has anumberoflocaluniversities,offeringselectcourses private universitiesin2013.ThetertiaryeducationKuwait approximately Kuwait hasadiversifiedsystemofhighereducationwith opportunities fornewentrants. to improvethequalityofvocationaltraining,andprovide companies andinstitutionsareseenasapreferredapproach university education.Partnershipswithreputedforeign of corporatesectorandstudentswhoareunabletopursue for vocationaltrainingismainlydrivenbytheneeds being themostnotedamongothers.InKuwait,demand Public AuthorityforAppliedEducationandTraining(PAAET) by establishingseveraltraininginstitutesintherecentpast, development ofitstechnicalandvocationaltrainingsector The KuwaitGovernmenthaslaidastrongemphasison I T by 2019 expenditure Planned education USD 10.5Bn ns e r t t 3 i , BusinessMonitor International iar tute y Ed s 106,680 studentsenrolledinbothpublicand

and u ca

- Trainin t i Education o n g Ce sector n te expenditure rs

provide standards international ofhighereducation. Significant potentialexistsforforeign universitiestosetupbranchesinthecountryand regional educationoperatorscompellingstudentstogoabroad forhighereducation. The privateuniversitiessegmenthasbeenasubjectofactiveinterest from global/ sector. offering highqualityaccredited educationpresents strong potentialforgrowth inthis participation inmanagementofschoolsandlimitedpresence ofinternational brands.TheGovernment’swith leadinginternational efforts towards privatesector interest from localinvestorstoestablisheducationalinstitutionsinpartnership Tertiary educationisakeyfocusareaandthere fortheKuwaitGovernment ishigh Source: CentralStatistical BureauAnnualStatisticalAbstract andPUC 2.4.1: Tertiary Education students (‘000) students enrolled University Public Private and 2013 2012 2011 2010 2009 O ppo p pr u 65 89 87 74 70 12 18 16 15 21 i b v r li a tu te c ni u u n ty ove n i ver i ver si si r ty ty v i ew • • • leading internationalbrands. graduate andpostcoursesinpartnershipwith Opportunity existstoestablishtertiaryinstitutionsoffering increase ofapproximately8%and1 Public andprivateuniversitieswitnessedayearon 10.5 Bnby2019. crossed USD6.8Bnin2013andisexpectedtoreach 2009 to2013,respectively.EducationexpenditureinKuwait education inKuwait represents considerablepotentialtospendonquality High GDPpercapitaandstatesubsidyforcitizens mix, drivesthegrowthoftertiaryeducationsector Healthy populationgrowthandanattractivedemographic private sectorparticipationinmanagementofbusiness. seeking toestablishbranchesinKuwaitandalsopromotes The Governmentissupportiveofforeignuniversities 2 -Keysectorsfor opportunities 1 % duringtheperiod

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 26 27 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: CentralStatistical BureauAnnualStatisticalAbstract market requirements. of recruits considerupgradingtheirskilllevelsandbetteraligningthemselvestojob by privatecompaniesare expectedtodrivedemandinthesectorasincreasing number Expansion ofarelatively youngworkforce inKuwaittogetherwithinitiativesundertaken university education. the trainingneedsofcorporatesectorandstudentswhoare unabletopursue strong emphasisonthetechnicalandvocationaltrainingsectorwhichseekstoaddress its youngworkforce andaddress risingrequirements ofthejobmarket.Thishasputa iskeentomakeaconcertedeffortKuwait Government towards skillenhancementfor 2.4.2: InstitutesandTraining Centers Vocational training (‘000) training Vocational training inthecountry. requirements. Currentlythereislimitedprovisionforquality engineering andbusinesswhicharealignedwithjobmarket Opportunities existtoprovidetrainingindisciplineslike providers includingestablishedvocationaltraininginstitutes. Kuwait isseekingtoattractregionalandglobaleducation O

2014 2013 2012 2011 2010 2009 ppo 5 53 42 43 40 40 5 r tu ni ty ove r v i ew , PACIandPUC • • • driving growthinthissegment. education programstothegrowingpopulationofKuwait, vocational traininginstitutes,offeringhighquality Several privatesectorcompanieshavebeguntoestablish further demand. segment forvocationaltrainingandisexpectedtodrive population betweentheageof15-29years,formskey Kuwait’s youngdemographicprofile,with2 levels. vocational programsandre-skillorupgradetheirskill there isalikelypotentialforthepopulationtoenrollin age groupof20to34years)andrisingunemployment, relatively youngdemographicprofile(targetworkforce– Considering theexpansionofworkforceinKuwait, 5% ofthe

2.5: Healthcare 1. Private sector USD infrastructure andagrowingprivatesector.TheGovernmenthasspentapproximately near term.Kuwait’s evolvinghealthcare industryischaracterizedbyalargepublic sector after UAEandQatardemandforhealthcare isexpectedtorisesignificantlyinthe Kuwait recorded thethird largesttotalhealthcare expenditure across theGCCregion part Source: BusinessMonitor International Healthcare (USD Bn) healthcare sectorand specialities treatments support willdrive theoveralldevelopment ofthe per capitaexpenditure onhealthcare andGovernment Stable economic growth, increasing population,high O 3

2019f 2018 f 2017 f 2016 f 2015 f 2014 2013 ppo Bn by201 of theoverallhealthcarelandscape. 6.4 6.2 5.7 5.5 5.4 5.1 5.9 5.1 r tu Bnin2013onhealthcareandisexpectedtospendoverUSD6.42019. ni expenditure ty ove 9 indicatingthepotentialgrowthandrisingshareofprivatesectoras investments areexpectedtoincreasefromUSD0.9Bnin2013 r v i ew in Kuwait-2013-201 9, developing adedicatedhealthcaresystem. manage thehealthcareneedsofexpatriatesinKuwaitby Company in2011asapublic-privatepartnershipinitiativeto The GovernmentestablishedtheKuwaitHealthAssurance KUWAIT HEALTH ASSURANCE COMPANY treatment. highlighting thegrowingneedforlifestylerelateddisease female populationandtwo-fifthsofmalesreportedobese, rates ofobesityanddiabetesgloballywithoverhalfthe individual healthandlifestyle.Kuwaithasoneofthehighest the objectiveofenhancingqualitylifeandimproving follow aproactiveapproachtohealthandwellness,with There isanincreasingdemandforlifestyleclinicswhich end specialityhospitals. develop inboundmedicaltourismmarketbydevelopinghigh opportunities toreducetreatmentsperformedoverseasand This trendislikelytogrowfurther,especiallyintapping Private sectorhospitalsinKuwaitoffermultiplespecialities. specialty hospitals. specialties isexpectedtostimulatemarketdemandfor availability ofqualitytreatmentforhigh-endhealthcare Concentrated effortsbytheGovernmenttoensure

Spe USD 6.4Bn 2019 Planned healthcare expenditure in Lif e cia 2 -Keysectorsfor opportunities s tyle me lty H o dica s p i t a l l c s l inics

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 28 29 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: MOHKuwait andEIU private sector. specialties suchasgastroenterology andneurosurgery thatdidnotexistearlierinthe Private sectorOPDhasrapidlyemergedduringthelast5years,withintroduction of reducing theneedforoutboundmedicaltourism. infrastructure andexpertisetoprovide specialtyhealthcare treatment inKuwait, participation islikelytohelpfostergrowth inthissegmentthrough developmentof Most privatehospitalsinKuwaitoffer multiplespecialties.Increasing privatesector 2.5.1: SpecialityHospitals O Maternity Allergy K Ibn Psychological Infectious Chest (PPP Physical Med. Al-Razi Hospital Specialty uwait Cancer Control ppo Sina model) Diseases Centre Hospital r Name Hospital Diseases hospitals tu Medicine & Rehabilitation ni Hospital (Al ty ove C in Kuwait (201 e Sabah) ntre r v i ew 3 Infectious Chest Spinal Allergies Cancer Psychiatric Maternity Rehabilitation Physical Orthopaedic Speciality ) Diseases Surgery Med Diseases Surgery & Current No. 290 (240) 199 (618) 364 764 173 (255) 329 441 (617) 75 36 of Beds (new) • • as constructingnewhospitals. investing incapacityexpansionatexistinghospitalsaswell To addressthegrowingdemand,Governmentis hospitals andclinicscateringtolifestylediseases. and presentopportunitiesforestablishmentofspecialty growing specialtiesinthehealthcaresectorKuwait Obstetrics, gynecology,cardiology,areamongstthefastest procedures andtreatmentswithinthecountry. penetration drivesthedemandforspecialtymedical the compensationpackage.Increasinglevelofinsurance Kuwait provideprivatehealthcareinsuranceaspartof for allexpatriates,whilemultinationalcorporationsin for healthcare.Publichealthinsuranceismandatory Insurance coverageisoneofthekeydemanddrivers diseases andtreatment. especially giventhehighincidenceoflifestylerelated demand for reach 4.8 2015 and Kuwait’s populationreachedaround4.2MnbyJune Mnby2019.Thisrepresentspotential isexpectedtogrowannuallyatnearly3% healthcare. demand drivers for is oneofthekey Insurance coverage healthcarefacilitiesandinfrastructure,

demand foradvancedtreatment services. in Kuwait,highlightingthegrowing needforlifestylediseasetreatments andagreater incidence oflifestylerelated diseasesincludingdiabetesandcardiovascular ailments A combinationofanindoor, sedentarylifestyleandpoordiethabitsisleadingtoahigh hypertension andobesity, beautyandanti-agingweightlossfitnesssolutions. preventive andpersonalizedhealthcare, solutionsforlifestylerelated diseasessuchas medicine,nutritionanddietsolutions, Lifestyle clinicsincludespas,alternative 2.5.2: Lifestylemedicalclinics Source: MOHKuwait andEIU O for healthcare servicesinKuwait. series ofadvanced medicalclinicsthatmeetthe growing demand an opportunityfor specializedhealthcare providers tosetupa advanced private clinicsinvariousareas. Consequently, there is “The privatesectorishighlyfragmented withanumberof Lifestyle related ppo Prevalence of diseases r tu ni ty ove Growth Drivers demographics r Favorable v i ew Socioeconomic conditions • • inpatient andoutpatientservices. clinics cateringtothegrowingdemandforhighquality healthcare providerstosetupachainoflifestylemedical governorates inKuwait.Opportunityexistsforspecialized a numberofprivatelifestyleclinicspresentacross owned. Theprivatesectorishighlyfragmentedwith Lifestyle clinicsinKuwaitarepredominantlyGovernment- diseases. address highincidenceofobesityandotherlifestyle personalized healthcareprogramsatlifestyleclinicsto Rising healthawarenessisdrivingthedemandfor lifestyle clinics. 2019) areexpectedtoleadincreaseddemandfor (projected togrowannuallyat3%reach4. Increased lifeexpectancyandrapidpopulationgrowth 2 -Keysectorsfor opportunities 8 Mnby

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 30 31 Investing in Kuwait: A guide for Investment Opportunities in Kuwait S Source: CentralStatistical BureauAnnualStatisticalAbstract 201 construction contractingtoreal estateserviceslikeproperty andfacilitiesmanagement. investors toparticipateacross thereal estatevaluechainfrom developmentplanning, are expectedtopropel growth ofthereal estate sectorandprovide opportunities for housing projects toaddress thehousingneedsofitsgrowing population.Theseprojects Kuwait hasoutlinedplansfordevelopmentofanumberlargescaleintegrated development sector 2.6: Integratedhousingprojects andurban business andoutsourcepropertymanagementservices. expected toincreaseasownersseekfocustheircore across residential,commercialandretailsegmentsis Demand forspecializedpropertymanagementservices property managementaspartoftheirserviceportfolio. managed andseveralrealestateservicescompaniesoffer A largeproportionofpropertiesinKuwaitareowner- such services. increase inrealestateassetsislikelytodrivedemandfor services andcompetentprofessionalresources.Theplanned and thereisaneedforspecialistfacilitiesmanagement The facilitiesmanagementmarketinKuwaitisfragmented in thecountry. international constructioncontractorstoestablishpresence and oilgas.Thisconstitutesasizeableopportunityfor across sectorslikerealestate,infrastructure,power,water Kuwait hasastrongpipelineofplannedconstructionprojects design andfeasibilitystudiesforrealestateprojects development planningservicessuchasconceptplanning, 135 Bn.Theseprojectsarelikelytodrivethegrowthof integrated housingprojectswithanestimatedvalueofUSD The Governmentisseekingtodeveloplargescale F Co Developme Pr the real estate valuechain. demand forservices across projects is expectedtodrive townships andhousing of largescaleintegrated The plannedconstruction aci E ope C ns TO l i t t r r R ove i e ty u s c

Mana Mana t i n o r t v n P i Co ew l geme geme annin n t rac n n t g t t in g 3, BusinessMonitor International 2009-2012 to GDP, Real EstateSectorcontribution USD 250 200+ projects, Project value Pipeline of construction projects USD Project value Expectedoperationsby 2023 – Madinat Al Hareer (Silk City) project USD 135Bn Project value urban development integrated housing projects and Development of large scale 8

Bn Bn -

providers tooffer suchservicesinKuwait. developmentplanningfirmsandrealdemand forlocalandinternational estateservice City. Developmentplanningforsuchlargescaleprojects requires specialistsandcreates Al Hareer (SilkCity)project, KhairanResidentialCityandtheSabahAlAhmadFuture Kuwait hasplannedanumberoflargeintegratedhousingprojects includingtheMadinat for suchprojects. development planningservicessuchasconceptplanning,designandfeasibilitystudies stages andseveralothersyettobeinitiated,there existsconsiderableopportunityfor With anumberoflargeprojects forhousingandurbandevelopmentcurrently intheinitial housing projects 2.6.1: Developmentplanningforintegrated Source: Zawya *Selectreal estate project Note: Allprojectsare residentialandongoing to establishpresenceinthecountry activity wouldcreateopportunities forinternationalinvestors The plannedconstructionand infrastructuredevelopment model. office presenceinthecountry whichisnotaveryefficient work donebyforeignplayerswhodonothaveaphysical development planningfirmsinKuwaitwithmostofthis Currently, thereisalimitedpresenceofspecialized is approximatelyUSD900Mn The potentialmarketsizefordevelopmentplanningservices O Total Residential City PAHW - North West Sulaibikhat - PAHW - Sabah Al Ahmad Future City – PAHW - North West Sulaibikhat Residential City B PAHW - Sabah Al Ahmad Future City - Area Sulaibikhat PAHW - North West - PAHW - Sabah Al Ahmad Future City project KIPCO - Daiya real estate PAHW - Sabah Al Ahmad Future City PAHW - Khairan Tamdeen - Madinat Al Hareer Select Housing Projects* 310 Apartments Package ppo Area Public Dahiya C - Area Public Buildings r Buildings tu A4, A5 Residential ni ty ove - 396 House Package Residential City r v City i ew Value (USD Mn) 135,124 14,000 88,000 27,000 5,000 121 130 136 274 452 11 • • • be undertakenwithprivatesectorparticipation. large scaleintegratedhousingprojects,manyofwhichwill Obtaining financeisexpectedtobeacriticalaspectfor for developmentplanningservicesinthenextfewyears. residential andinvestmentsectorswillcreateopportunities the Governmenttoaddresscurrentundersupplyin The largescaleintegratedhousingprojectsplannedby banks andinvestorsrequireforevaluatingprojects. and financialfeasibilitystudiesduediligencethat such asdevelopmentplanning,mastertechnical These projectsareexpectedtodrivedemandforservices 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 32 33 Investing in Kuwait: A guide for Investment Opportunities in Kuwait contributed a In 2014,theRealEstateandConstructionsector offer specializedservices. opportunities forglobalandregional propertymanagersto expansion ofretailandcommercial spacewouldprovide Development oflargescaleresidential projectsand 2011, withcommercialrealestatebeingthekeysegment. The marketsizeforPMwasestimatedatUSD350Mnin

Source: KuwaitReal EstateAssociation,KFH,KPMGResearch andAnalysis in leadingpracticesthissector. specialized third party, pure playproperty managerstoestablishtheirpresence andbring to specializedprofessional managementfirms.Thiswouldresult inastrong potentialfor core businessofreal estatedevelopmentandoutsource property managementservices However, asthereal estatemarketmatures, assetmanagerswillneedtofocusontheir these servicesbeingoffered in-housebyowners/assetoperators owners. Property managementisstillrelatively underdeveloped inKuwaitwithmostof liaise betweenownersandtenantstomanageproperty related servicesonbehalfof resources orexpertisenecessaryforday-to-daymanagementoftheproperty. PMfirms Property management(PM)firmsare oftenusedwhentheassetownerslacktime, 2.6.2: Property Management O space Malls - operating Category Kuwait -Retailmarket(2011) Total Other Class C Class B Class B+ Class A Class A+ Category Kuwait -Residentialreal estate market(2011) ppo r tu round ni ty ove 9.6% and2.6ofthenominalGDP o fbidnsPotential annual property No. of buildings (SQM ‘000) r Total GLA v 11,069 i 5,182 3,578 1,195 ew 618 657 435 22 management fees (USD ‘000) management fees (USD ‘000) Potential annual property 132,438 50,792 42,157 15,865 11,760 10,825 1,040 31 • • oa ,9 18,359 1,098 4,292 549 Total Other Class C Class B Class B+ Class A+ Category Kuwait-Office andmixed-use real estatemarket(2011) for PMfirmstomanageassetsonbehalfoftheoperators. planned bytheKuwaitGovernment,anopportunityexists With severalrealestatedevelopmentinitiativesbeing and correspondingopportunityforPMservices. has ledtoadditionaldemandforrealestatedevelopments growing populationandincreasingnumberofexpatriates Kuwait’s economicgrowth,togetherwiththesteadily buildings ,0 6,311 6,000 1,803 1,200 No. of 0 2,400 400 4 2,550 340 (SQM’000) Total GLA management fees (USD’000) Potential annual property 197,421 67,137 66,662 27,554 28,556 7,513

to specializedFMserviceproviders islikelytofurtheraugmentdemandforFM. Additionally, achangeinmindsetofassetmanagerstooutsource thisnon-core activity a growing needtomanagethesefacilitiesandrequirement forFMserviceproviders. estate activities.Severallargeinfrastructure projects initiatedinKuwaitwillresult in Facilities Management(FM)servicesare mainlydrivenbyanincrease inavailablereal 2.6.3: FacilitiesManagement infrastructure assetownersandoperatorsinKuwait. benchmarks andenterintolongtermcontractswith firms toenterKuwait,establishindustrystandardsand providers. Thereisanopportunityforsuchspecialized there islimitedpresenceofspecializedglobalFMservice by 2013.Localplayerscurrentlydominatethemarketand in 2011,andisexpectedtohavereachedUSD430Mn The FMindustryinKuwaitwasestimatedatUSD270Mn O sustainability ppo Focus on r tu ni ty ove Growth Drivers Growth inreal estate sector Outsourcing r v i ew demographics Favourable • • • to demandforspecializedFMserviceproviders. developments conformingtogreen/LEEDstandards,leads Rising focusonsustainabilityandgrowingnumberof resulting ingrowingdemandforprofessionalFMservices. further expectedtooutsourcetheirnon-coreactivities, Companies focusingonreducingoperatingcostsare resulting inademandforhighqualityFMservices. in theresidentialrealestatesectorisexpectedtogrow, demand forhigherqualityresidentialoptions.Investment income ofitsrelativelyyoungpopulationareleadingto Kuwait’s expandingrealestatesectorandhighper-capita 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 34 35 Investing in Kuwait: A guide for Investment Opportunities in Kuwait (by value) in % in (by value) by sector projects construction Proposed

Source: Zawya the GCCregion. contractorstoconsiderKuwaitasakeymarketwithin potential marketforinternational to bemore thanwhatcanbeabsorbedbydomesticplayerswhichfurtherhighlightsthe companies.Additionally,point forinternational thescaleofannouncedprojects islikely and experienceinexecutinglargescalecomplexprojects, thereby creating anentry Construction contractorsinKuwaitfaceconstraintstermsoftechnologicalexpertise construction activityinthecountry. along withlargescaleintegratedhousingprojects isexpectedtodrivealargevolumeof Kuwait Government’s focus ondevelopmentofinfrastructure (roads, ports,airport,rail) 2.6.4: ConstructionContracting and majority oftheplannedconstructionactivities,followedbyoilandgas,infrastructure considerable opportunityforconstructionactivity. Real The stretched. where localcontractingcapacity andexpertisemaybe particularly inlarge,complexortechnicallychallengingareas opportunities forinternationalconstructioncontractors hospitals inthecountry.Theseprojectsoffersignificant Ministry ofHealthisundertakingconstruction8additional initiated bythePublicAuthorityforHousingWelfare.The a periodof6to7yearsunderthevarioushousingprojects Over 90,000housingunitsareproposedtobeaddedover O ppo Power &Water power andwater. pipeline ofcurrentprojectsisvaluedatover r tu 6% ni ty ove Infrastructure 15% r v Others i ew Oil &Gas 8% 22% Real Estate 49% • • • additional residentialunitsandconstructionactivity. A growing,youngpopulationisdrivingtheneedfor significant constructionactivity. airports, railandGovernmentbuildingswhichwillleadto large infrastructureprojectssuchasroads,bridges,ports, The KuwaitDevelopmentPlanincludesconstructionof services. augment thedemandforconstructionmanagement The plannedintegratedhousingprojectswillfurther USD 250Bn estate projects accountfora in 2015. Thisprovides S regulations. center withexcellentmultimodallogisticinfrastructure supportedbyfavorabletrade Kuwait’s Third KuwaitMasterPlanseekstodevelopasaregional transport 2.7: StorageandLogisticsservices for foreign tradeandKuwait’scentrallocationintheGulfmakelogisticsastrategicpriority annually at4.3%during2014-2019toreachUSD62Bnin201.Theimportanceof Imports constituteakeycomponentofKuwait’seconomyandareexpectedtoincrease Source: BusinessMonitor International City andotherprojects. warehousing facilitiesthroughdevelopmentoftheCargo The Governmentisseekingtoaddressthedemandfornew facilities. goods, requiringthedevelopmentofadditionalwarehousing are expectedtoacceleratedemandforvariouskindsof Kuwait’s increasingpopulationandconsumerspending increased demandforlogistics. to serveinternationalairfreight,areexpectedsupportthe Projects suchastheproposedCargoCity,whichisintended the GCCrailroadnetwork. and anewnationalrailroadnetworklinkingthecountryto port attheBubiyanIsland,upgradeofairportinfrastructure projects aretheinitiativestoupgradeexistingports,anew as partoftheKuwaitDevelopmentPlan.Keyamongthese several transportationinfrastructureprojectsbeinginitiated Logistics servicesinKuwaitareexpectedtobenefitfrom

Kuwait’s import and exports, 2014-2019 Kuwait’s importand War L logistical and warehousing hubinthe region. developments havethepotentialtopromote itasakey the GCCisrelatively small,theproposed infrastructure Though Kuwait’s current share ofthelogistics sectorin og

E n Nomi C the country. omi is TO ehou t R ove ics n n al al sin

exp im r g p v o i o ew rt rt s s , , us us $bn $bn infrastructure Investment plan for road USD 4Bn Estimated project value Mubarak Al Kabir Port in Bubiyan Island USD 7.5Bn Project value 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 36 37 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: BusinessMonitor International 2.7.1: Logistics of these ports. 40 two keycommercialportsof Maritime transportis an averagerateof4.3%during2013-201 Imports inKuwaitareprojectedtoincreaseannuallyat transport. north ofKuwaitwhichwillenhance overlandfreight new andexistingroad planned overthe regional markets.Investment of capacity ofadditional2.5Mn TEUs andfacilitateaccessto Bn by2019.TheplannedMubarakAlKabirPortwilladda O (Mn tonnes) 2013-201 Maritime freightthroughput,

2019f 2018 f 2017 f 2016 f 2015 f 2014 e 2013 ppo Saudi ArabiaandIraq,generateconsiderablevolumesofroadfreight. Mn P P O O 35 29 25 37 41 32 10 13 4 11 11 12 12 1 r 3 RT RT 4 tonnes offreightin2014.Plansareunderwaytoexpandthecapacitiesboth tu O O ni F F ty ove S S Hu H Kuwait’s tradeactivitieswithregional countries, particularly next fiveyearsinthedevelopment of UAI w infrastructure, particularlyinthe B aik r A v THR h i ew THR the OU over OU GHP primary modeofcommercialfreightmovementinKuwait.The USD 7.5Bnis GHP U Shuaiba andShuwaikhhandledacombinedthroughputof 9 T toreachUSD62 U T 9, • • • (‘000 tonnes) Air freight Arabia andIraqinacosttime-efficientmanner. ports andtransportingoverlandtotheKingdomofSaudi opening upopportunitiesforbringinggoodstoKuwait’s key industrialareasandwiththeGCCrailroadnetwork, The nationalrailroadnetworkseekstoconnectportswith and giverisetore-exportopportunities. Kuwait’s strategiclocationwithintheArabianPeninsula port infrastructureupgradesareexpectedtoleverage The upcomingMubarakAlKabirportandotherplanned renewed focusonindustrialdevelopment. manufactured goods,oresandmetalsaswella be drivenbythegrowthintradeofagriculturalmaterials, The domesticdemandforfreightlogisticsisexpectedto 2019f 2018 f 2017 f 2016 f 2015 f 2014 e 2013 210 189 176 199 194 182 204 throughput, 2013-201 the 9, Kingdom

planned CargoCitywhichwillcatertoaircargo. Warehousing capacityisalsoexpectedtobeaddedthrough projects suchasthe needed additionalportwarehousing capacity. upcoming MubarakAlKabirPortattheBubiyanIslandisexpectedtoprovide much ports haveremained staticresulting insignificantun-met/pentupdemand.The While freight throughput hasincreased steadily, warehousing capacitiesatKuwait’s 2.7.2: Warehousing Source: InchcapeShipping Services,DeskResearch warehousing relatedvalue-addedservices. presenting sizeableopportunitiesforwarehousingand for localandinternationalinvestorsisexpectedtoremain, Kuwait’s warehousingcapacity,considerablemarketspace While Governmentinitiativesareexpectedtoexpand O hab otWrhue: 14,500 sq. m Airport Kuwait International Warehouses: Doha port Shuaiba port Shuwaikh port Current stockofWarehousing in Kuwaitatseaportsand airport ppo r tu ni ty ove Export warehouse: warehouse: Import Warehouses: Open storage area: Covered sheds: Warehouses: Outside the portarea Open storage area: Covered sheds: Warehouses: Within the port r v i ew 100,000 sq. m 500,000 sq. m 78,000 sq. m 40,000 sq. m 15,000 sq. m 70,000 sq. m 2,300 sq. m 5,600 sq. m 8,110 sq. m • • • the demandtoanextent. and thesewarehousescanbeexpectedtohelpaddress space inKuwait.Providingconnectivitybetweentheports considerable partofthesupplyinlandwarehousing Private sectorlogisticsservicesproviderscontrola further strainonthelimitedwarehousingfacilities. The ongoingandplannedinfrastructureprojectsareplacing imports furtherdrivesthedemandforstoragefacilities. need forwarehousingservices.Thecountry’srelianceon Kuwait’s increasingimportandexportvolumesindicatethe 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 38 39 Investing in Kuwait: A guide for Investment Opportunities in Kuwait S Source: CentralStatistical Organization,CBK,Markaz likely tofurthersupportdevelopmentofthebankingandfinancialservicessector. affordability. KuwaitGovernment’s plannedinfrastructure developmentprojects are policies ofmandatorymedicalinsuranceforexpatriatesandnationalsalongwithrising interests. Thegrowing insuranceindustryisalsoexpectedtobenefitfrom thefavorable The bankingenvironment haswitnessedtighterregulationsstakeholder governing Industry bytheMinistryofCommercemarket activities.Theinsuranceindustryisgoverned and The CBKoverseesbankingandfinancingactivitiestheCMAregulates securities 2.8: Banking,FinancialServices&Insurance investment fundsand regional andinternationalbanks,81 over 5.6 Kuwait has investors. especially forfundraisingduetohighliquidityamong as anattractivedestinationforPrivateEquity(PE)firms, contribution continuoustogrow,Kuwaitislikelyemerge the stockexchange.Asprivatesector’seconomic with onlyarelativelysmallnumberofbusinesslistedon The publicsectoraccountsformorethan50%ofGDP, demand forDSAservices. preference forpersonalattentionareexpectedtocreate for sophisticatedfinancialinvestmentinstrumentsanda between thefinancialcompaniesandclients.Demand Direct salesagents(DSA)actasanintermediary management productsandservices. and aburgeoningmiddleclassaredrivingdemandforasset increased numberofHighNet-WorthIndividuals(HNWIs) Rising wealthintheKuwaiteconomy,coupledwithan management (USD4.1Bn)in2013. second behindKSAintermsoftotalassetsunder income intheMiddleEastregion(USD As of2014,Kuwaithadonethehighestpercapita

D A Pri growth of the financialservicessector inthecountry. are indicative ofincreasing wealth inKuwait,drivingthe Robust GDPgrowth andhighGDPper capitaincome ss ir E C v e et TO a c te t S Mana R ove % E a qu le of total a i s geme r ty Age v well developedbankingandfinancialservicessector,accountingfor i ew n n GDP t t s over 23local,regionalandinternationalinsurancecompanies in 2014.Thelocalfinancialservicessectorconsistsof23local, 37,821 ), andranks localinvestmentandfinancecompanies,113

advisory alongsidePE. multiple financialservicesincludingassetmanagementandinvestmentbanking players rangingfrom privatefirmstopubliclylistedcompanies,mostofwhichoffer there isrenewed interest inPrivateEquity(PE)opportunities.KuwaithasseveralPE assets suchasreal estateandlistedsecuritiesfallingoutoffavorwithmanyinvestors, and privateinvestorsare lookingforavenuestoinvestsurpluscapital.Withtraditional Kuwait’s economyiswitnessinghighliquidity, owingtoincreasing oilprices.Institutional 2.8.1: PrivateEquity development ofthePEmarket. Medium Enterprises(SME)growtharefavorabletothe involvement intheeconomyaswellfosteringSmalland Government initiativestowardspromotionofprivatesector O ppo Improving economic scenario r tu ni ty ove Growth Drivers family business High percapita r Dominance of v income i ew Increased liquidity • • • • • • wealth fundsiscreatingopportunitiesforfundraising. Increasing liquiditywiththeGovernmentandsovereign HNWIs providingimpetustogrowthofPE. Kuwait hasanaffluentpopulationandarisingnumberof underpenetrated comparedtodevelopedeconomies. However, theKuwaitmarketremainssignificantly opportunity forPEinvestments. substantial businessopportunitiesandcreatessignificant Kuwait’s strongeconomicenvironmentpresents confidence amonginvestors. governance standardsinKuwaitareleadingtoincreased Stricter regulatoryrequirementsandimprovingcorporate growth. experienced PEfirmswhocanguideandsupportsuch and professionalsectorexpertise,drivingdemandfor ambitions forgrowthandareseekingcapital Mid-sized family-ownedbusinessesinKuwaithave 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 40 41 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: MarkazGCC AssetManagementreport entrants andmore sophisticatedproducts. respectively. Thisindicatesstrong potentialforgrowth supportingintroduction ofnew economies suchasChinaandIndia,whichexhibitapenetrationlevelof25%14% However, Kuwaithasarelatively lowlevelofpenetrationcompared tootheremerging average of1.9%makingitonethemore developedmarketsacross theGCCregion. Kuwait’s AssetUnderManagement(AuM)toGDP ratioof2.3%surpassestheGCC 2.8.2: AssetManagement emerging economies emerging (AUM/GDP)across of penetration Comparison management companies. sector, theinvestmentopportunitylookspromisingforasset and limitednumberofspecializedserviceprovidersinthe management (AUM).Withapositiveeconomicenvironment in theGCCwithanestimatedUSD4.1Bnofassetsunder In 2013,Kuwaitwasreportedasthesecondlargestmarket O ppo China 25% r tu ni ty ove India 14% r v i ew Kuwai 2.3% tG Kuwait -Longwaytocover Management Businessin Potential forAsset 1.9% CC • • • supporting thegrowthofAMserviceproviders. confidence inthelocalassetmanagementindustry, to enactandamendregulationssafeguardinvestor The CMAandKuwaitGovernmenthavetakensteps asset managementservicesinKuwait. High numberofHNWIsislikelytopropelthedemandfor products. deployment ofsurpluscashinvariousinvestment management servicesinthecountryasinvestorsconsider in themarketisexpectedtoincreasedemandforasset A strongeconomicoutlookleadingtoincreasingliquidity

fragmented withpresence ofmultiplechannelswhichcompetewithDSAs. the growth ofbusinessforDSA.Thefinancialservicesdistributionmarketremains with thedemandforsophisticatedfinancialinvestmentinstrumentswillsupport base investmentdecisionsbasedontheiradvice.Growing wealthinKuwait,coupled services andindividualattention.Investorsplacetrustintheirfinancialadvisors The growth ofDSA’s isdrivenbythedemandamongKuwait’s investorsforpersonalized 2.8.3: Direct SalesAgents O Higher confidence & comfort level ppo with DSA r tu ni ty ove Growth Drivers demographics r Favorable v i ew of sophisticated Development instruments financial banking andfinancial sector Kuwait hasawell developed • • • products, willprovidegrowthopportunitiesforDSAs. The launchandusageofmoresophisticatedfinancial Kuwait hasawelldevelopedbankingandfinancialsector. foster growthinthissegment. strength ofrelationshipenjoyedbyDSAscontinuesto Despite growthofalternativedistributionchannels,the in makinginvestmentdecisions. of complexfinancialproductsincreasetheneedforadvice The sophisticationoffinancialmarketsandtheintroduction with theirinvestmentneeds. more comprehensivefinancialsolutionscommensurate increasing numberofexpatriates,isexpectedtodemand Kuwait’s youngandaffluentpopulation,coupledwiththe 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 42 43 Investing in Kuwait: A guide for Investment Opportunities in Kuwait S Source: KAPP,DGCA within thecountry. redevelopment oftheairport,maritimefacilitiesanddevelopmentrailinfrastructure isseekingtoenhancethetransportinfrastructureThe KuwaitGovernment including development ofthecountry’s transportinfrastructure. Kuwait’s strong economicgrowth andasteadypopulationgrowth are drivingthe Air androad are passengertransportinKuwait. theprimarymodesofinternational 2.9: Air, maritimeandrailpassengertransport passengers isexpectedtoleadgrowthofthissector. The plannedintroductionofasingleGCCvisaforcruise Cruises andCrystaladdingKuwaitasaport-of-call. number ofcruiselinersincludingStarCruises,Silversea Growing demandfromKuwaitbasedtouristshasseena freight. rail connectivityacrosstheGCCregionforpassengersand Kuwait withtheGCCRailwayNetwork,providingseamless the KuwaitNationalRailwayNetworkseekstoconnect railway project, Another Kuwait Citytoeaseroadcongestion. The Governmentisplanningametrorailnetworkprojectin through twolargerailwayprojects. The GovernmentintendstointroducerailtransportinKuwait as atransitpointwithintheGCCregion. congestion. ThenewterminalwillhelpKuwaitpositionitself to raisethecapacity25Mnby2025andhelpease An expansionoftheairportisunderwaywhichexpected 2014 International Airporthasreached10 country. The the onlycivil/passengerairportofsevenairportsin The KuwaitInternationalAirportistheprimaryairportand Marin R A ir ai E C l p p

compared TO ass ass e p R ove e ass numberofpassengersattheKuwait e n n ge ge with r e r v n r t i ge ew

t its officialcapacityof7.2Mn. rans rans r t rans po po r r t po t . 3 Mnpassengersin r t Project value Aviation (DGCA) Kuwait by Directorate General of Civil Planned aviation sector projects in USD 10Bn Project value Expected operationsby2018 National railway network- USD 5Bn

par withglobalstandards andbenchmarks. specialized facilitiesmanagement(FM)servicestomaintainKuwait’s airportfacilitiesat Kuwait’s initiativestopositionitselfasacommerce hub.There existspotentialtoprovide The plannedupgradestoKuwait’s aviationinfrastructure are expectedtosupport 2.9.1: AirportFacilitiesManagement Source: KAPP,DGCA,Euromonitor, Frost&Sullivan,MEED contracts withairportauthorities/operatorsinKuwait. experienced FMserviceproviderstoenterintolongterm infrastructure. Therecouldbeasimilaropportunityfor long-term multi-yearcontractsformanagementofairport FM contactsacrosstheGCCaviationsectortendtobe revenues. with anestimatedmarketsizeofUSD30-40Mninannual growth inrequirementforFMservicestheaviationsector new terminalisoperational,therelikelytobeamulti-fold of 710,000sq.mforthefacilitiesmanagement.Once under developmentisexpectedtoaddanadditionalarea measures approximately190,000sq.m.Thenewterminal The currentterminalattheKuwaitInternationalAirport O ua ipr Integrated facilities management Dubai Airport Airport International Sharjah Airport (KFIA) international King Fahd Al Ain Airports Abu Dhabi and 15year contract to manage facilities at Bahrain Airport FM Contracts in theGCCAviation sector ppo r tu ni ty ove contract for Terminal 3. International Airport. facilities management services atSharjah 2009 for multi-technical and specialized (SDCA) signed 3 year FM contract in Sharjah Department of Civil Aviation operations including FM services. management of KFIA’s maintenance and 5 year contract in initiated in 2008 for International Airport. Dhabi International Airport and the Al Ain more than 260,000 sq.m areas atthe Abu Comprehensive contract tomanage management for an area of 70,000 sq. m. includes technical & infrastructural building Bahrain Airport in 2008. Scope ofwork r v i ew

• • • new specializedFMservices. environment sustainabilitywhichcouldpotentiallyrequire There isincreasedfocusandawarenessgloballyon nascent stage. providers astheFMservicesmarketinKuwaitisata There isexistentdemandforaviationfocusedFM for FMservicesinKuwait. Expansion ofairportinfrastructurewillaugmentdemand 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 44 45 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: providers. (FM). RailFMisanewsegmentinKuwaitandpresents opportunitiesforspecializedFM are expectedtoexpandthemarketforrailservicedeliveryandfacilitiesmanagement The proposed railandmetro projects undertheKuwaitTransportation Masterplan 2.9.2: RailFacilityManagement O ppo sustainability Focus on KAPP r tu , MEED,dubaimetro.eu, Frost&Sullivan,Picturesouced fromtheBerlinMetroProject ni ty ove Growth Drivers Development of Reducing traffic Rail Networks r congestion v i ew GCC widerail Impetus from initiatives • • • sizeable addressablemarketforFMservices. of USD7Bn.Theenvisagedrailandmetronetworksoffera km. Themetroprojectisexpectedtoentailaninvestment 2020, increasingto69stationswithatotallengthof160 50 kmand28metrostationsinthefirstphasebyyear of aroundUSD10Bn.Themetronetworkseekstocover with 511kmdoubletracktotallengthinvestment National RailRoadSystemwillbeanintegratedrailnetwork approximately USD90Mnp.a.inrevenues.TheKuwait The RailFMmarketinKuwaithasthepotentialtogenerate environment friendlystationsandalliedinfrastructure. to requirementofpotentiallynewFMservices,build Focus onsustainabilityandresourceoptimizationwilllead in Kuwait. System isplannedtosignificantlyenhancepublictransport Metropolitan Area.TheKuwaitRapidTransit of theroadinfrastructure,especiallyinKuwait Automobile trafficinKuwaithasoutgrownthecapacity the broaderGCCRailwaysproject. benefits itoffersthecountryandaspartofintegrationwith interest totheGovernmentinviewofpotentialtrade The KuwaitNationalRailRoadprojectisofstrategic S Bn andthereafter riseby5.4%perannumtoUSD1.9Bn2024. Business travelspendinginKuwaitisexpectedtogrow by8.9%in2014toreach USD1.2 As abusinesshub,transitarrivalsintoKuwaitcompriseprimarilyoftravelers. 2.10: Tourism, HotelandEntertainment related initiatives. account ofplannedinfrastructureprojects,economicexpansionandtourism Tourist arrivalsareexpectedtoincrease491,000by2022from306,559in2013on Source: AlpenCapital HospitalityReport201 purposes. of GDPpercapitawasdirectedtowardsrecreational entertainment andculturalservicesannuallyimplying8.5% approximately USD4, During the entertainment optionsinKuwait. are expectedtodrivedemandforamusementand propensity tospendonleisureandentertainment amusement centers.Highpercapitaincomeanda Kuwait hasalimitednumberofthemeparksand and resortcategories. the roomcapacityisconcentratedinfour-star,five-star rates intheregion,estimatedatUSD Hotels inKuwaithaveamongthehighestaveragedaily and hotelapartmentsarepreferredforextendedstays. result inincreaseddemandforhotelrooms.Budgethotels The growthinbusinessactivitiesKuwaitisexpectedto hotel

No. o Kuwait (2013) in Hotels En HOTEL expected tocreate investmentopportunities inthissector. Economic growth anddemandforentertainment optionsare E te C TO f r hotel a t S p th R ove ain Fou ar year 2013,theaveragehouseholdspendwas two o F r r i n tme ve St ee e me r e s s

o r s s s s n n r t t t t v ar ar ar ar ar t t i t ew s s 000 perannumonleisure, 13 10 10 12 2 3 43 4, MinistryofPlanning 246 in2013.Mostof No. o 1,057 82 1,854 1,381 62 2,120 2,017 f

r oom s USD 4.2Bn Estimated sector Spending on leisure and tourism 7-8% Expected y-o-ygrowth over 2011–2015 Revenue of branded theme parks 2 -Keysectorsfor opportunities value by 2015 195

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 46 47 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: CentralStatistical BureauAnnualStatisticalAbstract 2013,EIU,AlShall,KUNA 2.4 Mnin2013. entity.Kuwait Government Thefootfallsforrecreational andculturalattractionsreached square meters.Thiswasestablishedin1984bytheTouristic EnterprisesCompany, a Entertainment CityisthelargestthemeparkinKuwaitandcoversanarea ofonemillion water parks,aswellotherconceptslikeazoologicalparkandculturalattractions.The Kuwait hasanumberofrelatively smallrecreational concepts,includingamusementand 2.10.1: BrandedThemePark Footfalls in recreational places in Kuwait in places recreational in Footfalls O Aquarium Zoo Branded Theme Amusement Indoor Water Theme Park

in Mn ppo 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Entertainment r tu 2009 Park 2.60 ni ty ove Park 2010 .0 2.80 2.80 r Recreational places in Kuwait Cartoon 99 Village Sha’ab Leisure Hawally Entertainment Play Marah Lagoons Kuwait Kid Land Infunity Future Messila Aqua The Scientific Center Kuwait v i ew Land Park Kid Land Magic Zoo Zone Network World Beach Park 0121 2013 2012 2011 City Park 2.45 Trampo Kidzania Magic Planet 2.42 • • • conditions. family-oriented themeparkconducivetoKuwait’sclimatic is significantpotentialforintroducingalarge,branded In viewofthelimitedoptionsavailableinKuwait,there annual growthof approximately USD Kuwait's spendingontravelandtourismisestimatedat options inthecountry. are expectedtoincreasedemandforentertainment with arisingnumberoftouristsfromotherGCCcountries Increased tourisminvestmentsinthesectoralong the brandedthemeparks. disposable incomealsopositivelyimpactthedemandfor Lifestyle preferences,andtherelativelyhighlevelof sizable marketforbrandedthemeparks. with morethan and children.Kuwaithasayounggrowingpopulation, Amusement parkstendtoattractfamilies,youngadults 6.2 58% belowtheageof35,presentinga 6.4 Bnin2013,withanexpected % until 2025.

overall hotelcapacity. more budgethotels.Budgethotelscurrently constitutelessthanone-fourthofKuwait’s along withthedevelopmentofnewcommercial hubsinKuwaitwillaugmentneedfor demand forhotels.Anincreasing globaltrend towards cost-consciousbusinesstravel to stimulatebusinesstravelinKuwaitovertheforeseeable future, creating additional The plannedinfrastructure projects andeconomicdevelopmentplansare expected 2.10.2: BudgetHotels Source: WTTS2012 ReportandRespectiveHotelsWebsites indicating considerablepotentialfornewbudgethotels. higher averagehoteloccupancyratesandrevenueperroom, etc.) andrisinginflowofbusinesstravelerscouldyielda City, MubarakAlKabirportdevelopment,airportexpansion, The plannedinfrastructureprojectsinKuwait(e.g:Cargo only afewbudgethotelbrandsoperateinKuwait. is expectedtohavereachedUSD1.2Bnin2014.Currently, international players.SpendingonbusinesstripsinKuwait which makesitanattractiveentryopportunityforlocaland country and100%foreignownershipisallowedinthesector Mn by2016.Thelowpresenceofbudgethotelsinthe Kuwait’s hospitalitymarketisprojectedtoreachUSD500 O uatHtl opn SafirInternational Hotel Kuwait Hotels Company Corporation Limited Rotana Hotel Management Estate Company Al Argan International Real Salhia Real Estate Accor Hotels Key Players ppo r tu ni ty ove r v i ew Hotel Brands Rimal Hotel & Resort Bida’a Movenpick Hotel& Resort Al Al Manshar Rotana Courtyard Marriott Hotel IBIS Hotel Kuwait –Salmiya IBIS Hotel Kuwait –Sharq • • • • hotels. rates inKuwait,willfurtheraugmenttheneedforbudget Growth inbusinesstravelandprevailinghighaverageroom business hub,providinganopportunityforbudgethotels. sectors aremajordriversfordevelopingKuwaitasa Government incentivestopromotenon-oilindustrial oil industrystimulatedemandforbusinesstravel. Economic growthinthecountry,supportedbyagrowing the demandforbudgethotelsinKuwait. curtailment oftravelexpenditureisexpectedtostimulate Shift ofcorporatemind-setfromluxuryhotelstothe 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 48 49 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: BusinessMonitor International,Ipsos,EIU,Cisco, KPMGanalysis electronic organizationsandthegeneralpublic. servicesbyGovernment projectshas initiatedmanye-governance whichare expectedtodrivetheuseof technologies andassociatedsoftware. Ontheinstitutionalfront, theKuwaitGovernment The country’s youngandaffluent populationalsosupportsdemandfor emerging quick technologyadoptionandsupportingdevelopmentofsoftware andITbusinesses. region, penetration(62%)andmobile(138%)reflecting suchasinternet Kuwait rankshighonkeyITandmobileinfrastructure related benchmarksintheMENA 2.11: ITandSoftware Development in The Software and service sector sales Software andservice limited extent,bysomeregionalplayers. been traditionallyservedbyinternationalplayersand,toa wider GCCregionisrelativelynewasthesesectorshave The opportunitytoofferwebbasedservicesinKuwaitand especially thosewhicharewebenabled. further developmentofdigitalapplicationsandsolutions month by2016.Thisoveralldevelopmentwillinducethe driven byprivateconsumers,reaching45.4petabytesper historical growthtrendovertheforeseeablefutureprimarily Kuwait’s internettrafficingeneralisexpectedtocontinueits expectations onservicequality. businesses strivetomeetcustomerdemandsand Web andappdevelopmentisgainingimportanceas

O W and appdevelopment. expected todrive theneedforITservices suchasweb Favorable demographics anddigitization of contentare

USD Mn ppo 2013 andisexpectedtogrowannuallyat8%overtheperiod201. e b 100 200 300 400 500 market sizeforsoftwareandITrelatedservicesamountedtoaroundUSD528Mn

0 and r tu 188 0321e21f21f21f2018f 2017f 2016f 2015f 2014e 2013 AppDevelopme ni 340 ty ove 204 364 otaeServices Software r v i 222 ew 390 n t 238 416 260 450 281 481

players withlocalandregional presence. web-enabled ITservicesandsolutions.Thisprovides opportunitiesforinternational levelarewith ITtransformationinitiativesattheGovernment augmentingdemandfor businesses inKuwait.Demandfrom consumerfocusedsectorslikeretail, bankingalong Web andappdevelopmentisbecomingincreasingly importantforcustomer-centric 2.11.1: Web andAppDevelopment Source: BusinessMonitor International,InternationalData Cooperation localized andArabiccontent. other marketsintheregion.Therealsoexistspotentialfor with mostrequirementsbeingcurrentlyservicedoutof annum. ThemarketinKuwaitisstillatanascentstage 2013, withaprojectedgrowthratebetween and appdevelopment)wasestimatedatUSD340Mnin The marketsizeoftheITservicessegment(includingweb O ppo High internet penetration r tu ni ty ove Growth Drivers r population Young and v educated i ew 7 spending onIT % per Government • • • smart phones. phones, withmorethan64%ofKuwaitinationalsusing of thepopulationhasaccesstointernetovermobile for mobileappsandinternetbasedservices.Around41% using internetmorethanonceaday,resultingindemand within theMENAregionwith62%ofadultpopulation Kuwait hasoneofthehighestinternetpenetrationrates expansion ofwebandappdevelopment. Kuwait’s e-governmentinitiativesareexpectedtodrivethe applications, onlinevideos,etc.). digital tools(includingsocialnetworkingplatforms,mobile drive consumptionofcontentandengagementviamultiple Kuwait’s youngandeducatedpopulationisexpectedto 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 50 51 Investing in Kuwait: A guide for Investment Opportunities in Kuwait S Source: PACI,BMI. opportunity inthespaceofmediaandmarketingespeciallydigitalsegment. of broadband, mobilephoneandtelevisionalsoindicatethemagnitudeofpotential considering majorityofitspopulationisyoungandaffluent. Kuwait’s high penetration Kuwait hasdemonstratedahighaffinity forentertainmentandmediaespecially entertainment andmedia. backgrounds, whichgeneratesdemandfordiversifiedadvertising,marketing, Kuwait hasadiversepopulation,reflecting awiderangeofcultures andethnic 2.12: Culture, MediaandMarketing providers. provide growthopportunitiesforonlineretailersandservice coupled withrisingincomelevelsinKuwaitareexpectedto enabled devices(smartphones,tablets,smarttelevisions) across awideraudience.Thegrowingpenetrationofweb presence throughonlineformats,thusprovidingreach Kuwait isleadingtomanyconsumerbusinessesconsidering The prevalenceofinternetandbroadbandpenetrationin providers offeringlocalizedArabiccontent. market fordigitalcontentinKuwaitespeciallyservice phones, tabletsandsmarttelevisions,islikelytodrivethe audio-video). Increasingadoptionofdigitaldeviceslikesmart development (text,animation,graphics,images,designand tools suchasgames,e-books,appsandwidgets,web/blog Digital ContentCreation(DCC)includescreationofdigital a keydriverofdigitaladvertisinginKuwait. High penetrationofbroadbandandmobilebasedinternetare computers, tablets,smartphonesandgamingconsoles. platforms connectedviainternettodevicessuchas Digital mediamarketingisalignedwithnewage Appl D D i i culture, media andmarketingsectors. and culturaldiversity offer opportunities inthe A wealthypopulation withhighlivingstandards g E g C i i t t TO a a ica l l Co R ove M t e i o dia n n te r Sto

v Mar n i ew t C r e ket r s e & a in t On i g o n l in

e P o r t a l Population by ethnic groups (June by ethnic 2015) Arab 28% Kuwaiti Others 31% 2% Asian 39%

Economies specialized international playersinKuwait. specialized international catering toin-housedigitalmarketingrequirements indicatingroom forpresence of firmswhoaredominated byinternational primarilyoperatingthrough localtie-upsand The sectorcomprisesofglobal,regional andlocalboutiqueplayersbutislargely 5% ofthetotaladvertisingspend. population isfuelingthegrowth indigitaladvertising,whichcurrently accountsforonly traffic onsocialnetworkingsitesandincreased timespentonlinebytheresident multiple servicessuchasmarketing,advertising,analytics,technologyetc.Growing marketing industryishoweveratanascentstageinKuwait,withplayersoffering Kuwait hasthefourthhighestadvertisingexpenditure intheMENAregion. Thedigital 2.12.1: DigitalMediaMarketing Source: Arabmedia outlook digital marketingofferingsacrossneighboringmarkets. Middle Easterncountriesprovidepotentialforreplicating Additionally, linguisticandculturalsimilaritieswithinthe in theKuwaitmarket. significant opportunitiesforcompaniesinthissectortogrow (nearly USD61Mn)by2015.Thisisexpectedtoprovide advertising risingfrom5%in2011toapproximately13% around USD470Mnby2015,withshareofdigital The advertisingmarketinKuwaitisexpectedtoreach (2011) expenditure advertising total as %of expenditure advertising Digital Developed Developed O ppo region GCC r tu ni ty ove Netherlands South Korea emrk Denmar Australia arin Bahrai Kuwait China Qatar (2015). UA KSA UK US E r v i ew 5% 5% 6% 7% 8% 17% 18% 21% 21% 23% 27% 32% • • • marketing space. adoption, whichsupportsopportunitiesinthedigital (138%) andTV(99%),henceisquickintechnology The countryhashighpenetrationofinternet(62%),mobile formats includingsocialmedia. rates ofinformationconsumptionacrossmultiplemedia literacy ratesandpercapitaincome,translateintohigh Kuwait’s favorabledemographics,coupledwithhigh propelling thegrowthofdigitalmediamarketing. easier foradvertiserstotargetnicheaudiencesthereby Cost effectivenessofthedigitalmediumalsomakesit Digital 2 -Keysectorsfor opportunities 20 40 60 80 0 advertising expenditure advertising 01e21 03f21 2015f 2014f 2013f 2012f 2011 e 5% 20 Proportion ofDigitalAdvertising(%) Digital Advertising(US$mn) 8% 31 expenditure as %oftotal expenditure 10% 41 12% 51 in 13% 61 Kuwait 0% 5% 10% 15%

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 52 53 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: IFPIDigital MusicReport2012,DFCIntelligence, MahmoudKhasawneh-GameDevelopers Conference localized Arabiccontent. the marketfordigitalcontentinKuwaitespeciallyserviceproviders whocanoffer adoption ofdigitaldeviceslikesmartphones,tabletsandTVsislikelytodrive development (text,animation,graphics,images,designandaudio-video).Increasing content marketespeciallyinareas likegames,e-books,appsandwidgets,webblog Kuwait is,however, stillintheearlystagesofdevelopmentwithregards todigital Bn by2016,recording anannualgrowth ofaround 5%perannum. USD 49Bnin2012termsofrevenues. Thisindustryispoisedtogrow tooverUSD62 The sizeoftheglobalconsumerdigitalcontentindustrywasestimatedatapproximately 2.12.2: DigitalContentCreation variously estimatedintheregionatUSD1Bn. is reportedtohavethefastestgrowthwithasizethat For instance,thegamingmarketinMiddleEastregion e-publishing, localcomicseriesandgamingapplications. opportunity inareaslikemobileapplications,Arabic established internationalplayerstoexplorethisuntapped nascent marketwithfewnicheplayersindicatingroomfor In Kuwait,thedigitalcontentcreationmarketremainsa O High potentialof from advertisers digital platform ppo Sponsorship Sponsorship r tu ni ty ove Growth Drivers entertainment and media content localization of r population Young and educated Need for v i ew capita income High ratesof penetration and mobile broadband High per

• • • • drives demandforentertainmentandmediacontent. A young,well-educatedandrelativelyaffluentpopulation of digitalcontent. designed forthesedigitaldevicescanleadtomonetization Encouragement fromadvertiserstosponsorcontent social networkingandonlinegaming. provides largepotentialopportunitiesinsegmentssuchas The increasingadoptionofsmartphonesandtablets in digitalcontentcreation. television, filmandmusicislikelytopropeldemandtrends localization ofcontentandregionaltrendsPan-Arab With Kuwait’shighpenetrationofTV,mobileandinternet, localized Arabiccontent. expected tohavehighdemandalongwithpreferencefor and subscriptionbasedwebsites(e.g.:Zawya,MEED)are Category specificonlineportals(e.g.:electronics,fashion)

portals alongwithincreasing acceptanceofonlinepaymentsystems. coupled withrisingincomelevelsinKuwaitwillfurtheraugmentthemarketforonline region. Growing penetrationofwebenableddevices(smartphones,tablets,smartTV’s) examples ofonlineportalssomewhichare expandingacross theGCCandwider market forapplicationstores andonlineportals.Kuwaithaswitnessedmanypopular penetrationandtechnologyadoptionareHigh levelsofinternet likelytostimulatethe 2.12.3: ApplicationStores andOnlinePortals O ppo mobile penetration High literacylevels Young population r broadband and High ratesof tu Growth Drivers ni ty ove r v i ew initiatives inthis initiatives capita income Government Supporti measures Successful High per space ve

• • region. e-commerce andonlineplatformsinKuwaittheGCC country isleadingtosuccessfuladoptionofthemedium The broadreachofsocialmedia,internetandmobileinthe infrastructure, educationandGovernmentservices. to promoteITacrossnumeroussectors,suchas Kuwait Governmentisimplementingvariousmeasures 2 -Keysectorsfor opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 54