An emerging trend among PE firms undertaking Shariah investments is the rising focus on vertical farming – which is gaining traction in urban centers that are stuck due to space constraints plus desert cities within the GCC.
Investor interest in this sector is being fostered in several jurisdictions, Griffin Private Equity Fund Founder Gary Spence shared with IFN Investor. “While Singapore may be seen as a pioneer, such opportunities can already be found across the UAE, Bahrain, Qatar and Saudi Arabia.”
With such emphasis on food security, Gary explained that investment concerns go beyond the impact from an ESG perspective, to how local communities can benefit – factors that underpin the Shariah aspect which were further confirmed by several experts with Fatwas.
Technological advances have led to better conservation of water supply and related resources within a vertical structure – resulting in urban farming being no longer limited to just leafy produce but also extending to the stocking of crustaceans like prawns and crabs.
Having automation and AI-monitored controls mean it is possible to have optimal spreads of 50 to 100 acres of farming conducted within a small space – on rooftops, wall shelving and other innovative structures – that can be managed by minimal staffing.
The combination of these factors will beget significant investment returns over a 10-year period, which fits well within a PE strategy. “While the projected returns can reach 300% or higher, such projects will not be seen as suitable opportunities for VC investments.”
To enhance economic output, the agrivoltaic concept dating from 1980s is being adapted – where solar panels are combined with power storage and lighting elements for use after dark, while providing shade during the day for the vertical farms.
This concept is being tweaked to provide sustainable facilities to tower blocks used for such farming – with off-grid power supply plus hot water piping – which results in even more cost-savings. Gary noted this would be among the steps taken to help ensure Saudi Arabia’s NEOM project would be self-sustaining.
