3 November 2009 - The UAE is setting up a new investment vehicle to take stakes in global nuclear companies as it prepares to award a contract to develop the first civilian nuclear plants in the Arab world.

According to the Financial Times, the Emirates Nuclear Energy Corporation is expected to be formally established within weeks. It will oversee the development of the nuclear programme and act as a government investment arm by making strategic investments in the sector, domestically and internationally.

The government hopes an agreement with the US will be finalised shortly, which would allow civilian nuclear trade with the UAE. Similar deals have been reached with France and Korea.

The Gulf state is then expected to award contracts - estimated to be worth about $20bn - for the construction of the first nuclear power plants, which could produce between 4000 MW and 5500 MW of electricity by 2020.

The project is being led and funded by Abu Dhabi , the UAE's capital, which is spending hundreds of billions of dollars to develop the emirate and diversify its economy.

Three different consortia are thought to be competing for the nuclear contract. These include one led by France's Areva, another headed by General Electric of the US and a South Korean team that includes Korea Electric Power Corporation and Hyundai Engineering & Construction.

Areva has already been talking with Middle East investors about the possibility of selling a minority stake.

Abu Dhabi's Mubadala, a state investment vehicle, last year announced a target of becoming a top 10 investor in GE, with which it has also agreed to an $8bn joint venture to set up a commercial finance entity in Abu Dhabi modelled on GE Capital.