Under the terms of the agreement, the two companies will also create a joint venture utility firm in Dubai focusing on developing business across the Middle East. Istithmar will hold a majority stake of 51 per cent with Hyflux taking the remaining share. The deal also sees Istithmar venturing into Singapore. The company will take a 10 per cent stake in Hyflux, with an option to increase the stake to 20 per cent within five years.

The move is the latest in Istithmar’s growing international investment portfolio. It recently took a 13 per cent stake in the US’ Kerzner International. The two companies are jointly developing the billion-dollar Atlantis luxury resort on the Palm Jumeirah.

Istithmar is also a 10 per cent shareholder in Bank Muscat International, a BD 50 million ($136 million) stand-alone joint venture bank granted a full commercial banking licence by the Bahrain Monetary Agency (BMA – central bank) in late October (MEED 29:10:04).

Created in 1989, Hyflux is listed on the Singapore Exchange. Its main areas of business focus on water purification, wastewater treatment and recycling. Istithmar was formed in 2003 to manage the investments of Dubai’s Corporate Office including the Ports, Customs & Free Zone Corporation (PCFZ), Nakheel, Dubai Metals & Commodities Centre and Tejari.com. Its initial investment capital was $2,000 million (MEED 22:10:04).