Russia plans to develop a fifth generation joint light fighter aircraft with the UAE as Moscow seeks to boost its military exports to the region.
Sergey Chemezov, the chief executive of Rostec, the country’s largest military complex, said an initial agreement has been signed and work was expected to start on the "long-term project" as early as next year.
Speaking at the International Defence Exhibition (Idex) in the capital, he said it was too early to put a value on the project.
Mr Chemezov said there had been separate discussions about the potential purchase of Russia’s Sukhoi Su-35 fighter jets.
It coincides with a deal struck between the Russian Direct Investment Fund and Middle East investors to create a consortium to acquire a minority stake in Russian Helicopters, a Rostec unit.
"Today we have agreed with the Russian Direct Investment Fund and Middle Eastern investors on the final parameters of the deal and signed documents for the sale of a minority stake in Russian Helicopters, " said Mr Chemezov.
It values the company at US$2.35 billion, the fund said in a statement.
Rostec is a sprawling conglomerate comprising 700 organisations held by 14 holding companies. Nine of these are in the military and industrial sectors – the most famous of which is assault rifle maker Kalashnikov.
The memorandum of understanding between Russia and the UAE to jointly develop the fighter aircraft follows a similar fighter jet collaboration deal agreed between Russia and India last year.
The fifth generation aircraft that is set to be developed with the UAE is expected to be a variation of the MiG-29 fighter jet.
Denis Manturov, the Russian industry and trade minister, who is also in Abu Dhabi, said yesterday that the cooperation agreement was a critical outcome.
"One of the most important results for us from the past few days is the signing of an agreement with the Emirates in the field of military and industrial cooperation.
"One of the fields of this cooperation is the creation, development and supply of the fifth-generation fighter jet."
He said he hoped it would lead to further cooperation between the countries. "The UAE has also expressed interest in the Russian military warplane Su-35," Mr Manturov said.
The Su-35 is a "4th ++" generation aircraft on which Sukhoi is pinning its "hopes in the near future", according to its website.
In Abu Dhabi, Mr Manturov also met senior government officials and sovereign funds to discuss potential collaboration on other projects in Russia.
"We discussed investment in Russian Railways and we also discussed installations in the pulp and paper sector," he told reporters.
Mubadala Development Company and the Russian Direct Investment Fund already have a $2bn co-investment vehicle in place to pursue opportunities in Russia.
The economy there has been affected in the past few years by the oil price crash, the subsequent slide of the rouble and sanctions imposed on it by the United States following the Ukraine crisis.
Mr Chemezov said the weaker oil price had not significantly affected the regional order pipeline for Russian military exports.
"Of course it impacts everybody because the main revenues here are based on oil and gas but so far we don’t feel any reduction or slowdown. The weapons market has not reduced considerably."
The rouble has rallied with the oil price and hit a 19-month high versus the US dollar last week. Brent crude has remained fairly stable in recent weeks above $55 per barrel, spurred by optimism that an agreement by Opec and Russia to curb output is being adhered to.
Source: The National
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