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Plan to replace Scottish oil refinery mulls £13bn investment

Scoping study outlines nine project options for a future industrial complex at Grangemouth

A plan mapping out a green future for Scotland’s imperilled Grangemouth oil refinery proposes £3.8bn of investments over a decade, rising to almost £13bn under a best-case scenario.

A feasibility study of potential options for the site — known as Project Willow — said nine industrial opportunities from recycling to biofuels could be deployed over the next 20 years to create a “flourishing low-carbon hub,” according to documents seen by the FT.

But the proposals lay bare the scale of investment and regulatory work needed for Grangemouth, raising questions over the UK and Scottish governments’ ability to deliver on this litmus test of the energy transition.

Project Willow, undertaken by EY, has been carried out by both governments and Petroineos, a joint venture between Sir Jim Ratcliffe’s Ineos and PetroChina. An outline of its recommendations is expected to be published in the coming days.

Last September, Petroineos confirmed it would close the oil refinery at the heart of the complex near Falkirk in the second quarter of this year, causing 400 job losses and fears of wider economic damage through central Scotland.

Implementation of the proposed projects will now pose a challenge for the UK and Scottish governments, which have pledged to save jobs and develop clean industries while reaching net zero greenhouse gas emissions.

“The key point is that all of this potential can only be unlocked by policy and regulatory changes,” said one person briefed on the report. “There also needs to be a custodian to manage the due diligence and financing of a broader master plan.”

News channel STV reported last month that Willow could create 400 jobs in the next five years, rising to 1,750 by 2040.

The UK and Scottish governments have pledged £200mn and £25mn, respectively, for viable developments. UK prime minister Sir Keir Starmer hopes the funding will attract three times as much private sector investment.

Industry insiders, however, fear bureaucratic inertia could put off private enterprise. “We are worried this will all just disappear into the civil service,” said one of them. “Officials have already said the whole thing is too difficult.”

Government would need to shape a favourable investment climate by funding mechanisms for costlier clean fuel while fostering forestry and crop feedstock supply chains, the person added.

“These projects would already have been happening if they were commercial today,” the person said.

Petroineos declined to comment. The UK government said the prime minister’s £200mn “transformational” commitment to Grangemouth sought to “unlock its potential.”

The Scottish government called on UK ministers to enable new technologies to be “deployed at pace”, saying most of Willow’s recommendations would be directed at Westminster.

From 2028, Willow’s near-term projects focus on recycling plastics, the production of biomethane from sewage and animal waste and, from 2030, turning paper waste into feedstocks for low-carbon chemicals.

Longer-term proposals, from 2032, would require larger capital spending and significant regulatory overhaul.

One is an £800mn sustainable aviation fuel and renewable diesel refinery using waste fats and crops to tap airlines’ growing demand for lower-carbon fuels. But with only a quarter of the feedstock available locally, scaling crop yields would be vital, the documents said.

Another, costing £340mn, would process Scottish timber into advanced bioethanol, a greener alternative to petrol. But some question using trees as a fuel feedstock when the UK already imports 80 per cent of its timber.

Building eight of the projects would require £3.8bn, with the report’s “growth case” visualising another £3.45bn for additional capacity and the construction of an e-ammonia plant.

Overall, £12.9bn would bring all nine developments to their “full potential,” including the use of Scotland’s plentiful wind power to generate green hydrogen.

“Even if only three or four projects make it through, it would be transformational for Grangemouth,” said the industry insider.

Dubai’s property market is thriving —and its neighbours are taking notes

Price rises of 147 per cent in five years, soaring skylines and a rush of new residents are an inspiration to some, a cautionary tale to others

In 2029, Dubai’s first skyscraper, the World Trade Centre, will turn 50 years old. When it was built, the 39-storey tower was an outlier, an ambitious spindle that stuck out in a low-rise landscape. Now it’s almost hard to see, dwarfed by soaring new additions. The first rash of those skyscrapers went up around the turn of the century, continuing until the Great Recession of 2008 upended the emirates’ fortunes. 

Almost two decades later, Dubai is thriving. Residential sales in the third quarter of 2024 reached Dh120bn ($32.7bn), according to CBRE, and Knight Frank’s 2024 Destination Dubai Report projected the year’s spending by top-end homebuyers (those with a personal net worth in excess of $20mn) would hit $4.4bn, a rise of 76 per cent year on year. Its most recent Wealth Report, published this month, showed property prices in Dubai rose 147 per cent over the past five years. Savills has increased its Dubai team from 3 to 100. Dubai’s neighbouring cities are watching closely — in their different ways looking to emulate or distance themselves from Dubai in a bid to attract new residents.  

One keystone of Dubai’s success has been in the more diverse profile of buyers, says Michael Lahyani, founder of PropertyFinder — the local answer to Rightmove or Zillow — largely thanks to the now six-year-old Golden Visa programme. It was introduced specifically to encourage foreigners to treat Dubai as more than just a tax-free pit-stop for a couple of years — and it seems to be working. After the Gulf Cooperation Council buyers came a flurry of Russians and Indians: “It’s for entertainment purposes, a place to go for a weekend,” says Lahyani.

In 2025, though, an increasing number of buyers are coming from Europe and North America. A recent study by migration consultancy Arton Capital, for example, flagged that 37 per cent of Germany’s wealthiest are now emigration-prone, with the UAE a prime destination. There is also a rise in American arrivals. Leigh Williamson is a Canadian who moved to Dubai 18 years ago, and has been a Sotheby’s agent for 11 of them; she says her client base has 20 per cent more Americans than a decade ago. Typical was the billionaire to whom she sold an apartment in one of the highest profile, internationally branded developments; they snapped it up as a convenient additional home within easy reach of both Europe and Asia. “We’re also seeing Iranian, Indian and Middle Eastern Americans moving back to the region to be closer to family,” she says Williamson. 

“Buyers who bought to flip used to be the majority, but that’s changing,” says Lahyani. A rise in rental costs has also nudged more expats towards buying, he adds: “You can get anywhere between six and eight per cent yield unleveraged. So a lot of the buyers are buying to live in.” 

Longer-term planning has reshaped construction, too, pivoting towards families. Shahab Lutfi is chief executive of H&H Development, which has worked on brands including Jumeirah and Four Seasons and its own branded residence, Eden House. “The demand for houses is very high — with what we’ve launched so far, we’re picking up lots of expats who live in Dubai but couldn’t find the right product,” he says, of the departure from identikit high-rises. Lutfi’s Eden Hills project launched in November last year and he says 130 houses have sold so far, starting from $5mn for a 7,446 sq ft property. Even when high rise developments are built now, there’s a shift towards larger homes. Lutfi’s initial floor plans for the first Eden House tower maxed out at three-bedroom apartments, but he now tells architects to include four- and five-bedroom options.  

Behind the scenes, the government now regulates construction more rigorously, in order to offset the risk of repeating the crash that happened in the wake of the global financial crisis. “In 2007, Dubai was the Wild West, and heavily in debt,” says Sotheby’s Williamson. Andrew Cummings, head of residential for Savills Middle East, also notes that buyers have greater safeguards: “When you buy off plan now, all the money goes into escrow, and the land department is very regulated.”

Neighbouring cities are quietly taking note. Capital of the UAE Abu Dhabi has adopted a different approach to development — in part, thanks to the security of its vast energy stockpile (it has 96 per cent of the UAE’s oil reserves, and just surpassed Oslo to become the world’s richest city in terms of assets managed by sovereign wealth funds, with $1.7tn). The focus here is less on smaller apartments with maximum mod cons for mid-level execs, and more on larger, family-friendly footprints that will offer a true sense of both home and hideaway. It’s also reflected in the pace of day-to-day life. “It’s a lot more measured and not in a rush. There isn’t the hustle and bustle of Dubai,” says Michael Lahyani. “Families like it, and it has some of the nicest beaches, and hundreds of natural islands.”

Cummings says comparable properties are around 20 per cent cheaper there than in Dubai — up to around $800 per sq ft for the W Abu Dhabi on Yas Island, compared with $1,300 at the W in Dubai Harbour. There are occasionally even better bargains, he confides. “A 20,000 sq ft villa? I sold a client one in Dubai for Dh90mn [$24.5mn] and called them and said ‘Do you want to buy the same thing, but half price, in Abu Dhabi?’ ” Some of Williamson’s clients “are thinking they’d rather be up there and do the 45-minute drive down to the bling-bling fast-paced city for work, then go back to something a little more quiet,” she says.

Cash-rich Abu Dhabi has also staked a claim on cultural capital, with partner outposts of both Louvre and Guggenheim museums, intending for those to shorthand its perhaps more highbrow approach to high-end living. There’s more everyday fun to be had, too. “It’s turning itself into a lifestyle destination — the sheer number of times I’ve been in Abu Dhabi for events recently: we went to see Kevin Hart, Ed Sheeran and Michael McIntyre there,” Cummings says.

Elsewhere in the region, it’s a different story. Qatar, which has so faithfully followed Dubai’s template in its gleaming built environment, hasn’t seen the same surge in real estate sales. In part, that’s because it is less expat-friendly than Dubai — attitudes towards alcohol remain conservative, for instance — but it’s also thanks to the lack of tourism. “Tourism to Dubai breeds familiarity,” says Cummings; moving to the Gulf often starts with a vacation. “And how many friends have gone on holiday to Doha?” (There were 18.7mn visitor overnights in Dubai last year, versus just 5.08mn in Qatar, according to data from the respective governments.)

Ras Al Khaimah, or RAK, is the other intriguing emirate: it’s where gambling will soon be permitted for the first time, with a $3.8bn Wynn-branded complex opening on Al Marjan Island in 2027 and planned residences from Nobu, Four Seasons and Ritz-Carlton. “It’s a relatively quiet emirate, known for its ceramics and nature, but it’s where Dubai was in 2005,” says PropertyFinder’s Lahyani. There are more than 60 luxury developments in the pipeline there, with prices starting from Dh700,000 (around $190,000) and many sales open; the first, Playa del Sol, is scheduled for delivery in the second quarter of next year, but the majority are slated for 2027-28. “There are also a lot of first time developers,” Lahyani adds, “and prices are lower than Dubai considering that it’s a smaller, more nascent market”.

Perhaps the most interesting potential in the region is a little farther away, on the island nation of Bahrain. Historically, this former British protectorate was the most outward-looking country — it was a trading post on the Silk Road, driven in part by its world-class pearls, and was wealthy as a result. Then the petrodollar revolution elsewhere in the region disrupted its dominance. But now Bahrain is racing to catch up with Dubai and Co, as the skyline fills with cranes to build luxury branded residences from the likes of Kempinski and Waldorf Astoria. “They’re very well priced, at sub $1,000 per square foot,” says developer Shahab Lutfi, “and Bahrain is a beautiful country”.

Bahrain’s authorities are taking a different approach from those in Qatar, and including urban regeneration in their master plan. For example, they didn’t demolish the historic old town, Muharraq, as the Qataris chose to do in Doha to make way for a new Design District. Rather, they established a moratorium on demolition before handing it over to a cultural task force to renovate and adapt it. Work started in the early 2000s and was only completed late last year, and includes the 17-building Pearling Path, which tells the story of that centuries-old industry via a series of old warehouses, offices and homes.

Architect Noura al Sayeh has overseen the programme for the government since its inception. “It’s the largest historic city remaining in the Gulf, and we want to add new layers of value,” she says, noting that the transformation of the area is bringing renewed interest in residency there. “Housing is at the heart of all cities, and there’s nothing at this scale in the Gulf Cooperation Council. We hope the development will continue in this organic way.”

Later this year, you’ll be able to live like a local there for the first time — at least temporarily — when the Murad House, one of the anchors of the Pearling Path, will open as a seven-room, Bahraini-operated boutique hotel.

The ‘freedom railway’: China’s new plan to take on the US in Africa

Tazara project showcases Beijing’s leaner approach to overseas development just as western aid appears to retreat

Mukololo Chanda still recalls the glory days of Africa’s “freedom railway”. Almost four decades ago, fresh from high school in Zambia, she began working as a switchboard operator on the railway built by Mao Zedong’s China that she believed would steer her newly independent country to prosperity.

“It was the only reliable way to travel to many places — everyone was using it,” said Chanda, a bubbly 55-year-old who is now the station master in Kapiri Mposhi, from where the Tazara railway links copper-rich, landlocked Zambia to Tanzania on Africa’s east coast.

But decades of underfunding and mismanagement have today left its decaying wagons and tracks operating at a fraction of capacity. “I was working alongside Chinese [colleagues], everything was running smoothly and we were always paid on time,” Chanda recalled. “I’d like the Chinese to come back.”

She is not the only one. Zambia — long a poster child for Beijing’s reach in Africa — and Tanzania are negotiating with a consortium led by the state-owned China Civil Engineering Construction Corporation for a $1bn concession to rehabilitate and run the iconic railway, reviving the strategic export route to Beijing.

The railway is an exemplar of a revamped, leaner approach to Chinese overseas development that comes just as US President Donald Trump’s gutting of USAID and the UK’s slashing of its aid budget throws western approaches to foreign assistance into question.

China has long taken a different path from western nations, focusing less on humanitarian aid and more on financing grand infrastructure projects that many African leaders say are needed to lift their countries out of poverty.

Tazara showcases an attempt to use more equity investment by Chinese state companies after Beijing’s Belt and Road Initiative was marred by defaults in borrower countries, including Zambia.

Fredrick Mutesa, the secretary-general of the Zambia-China Friendship Association, said that “there’s a feeling that there is no alternative to [the western] model of development, which is more aid than partnership”. Referring to China, he said: “To be able to see a country that has used a different path to development, it’s quite inspiring.”

Whether it succeeds could have far-reaching implications for the deepening competition for influence in a continent that is home to rich deposits of copper and other critical minerals vital to the global energy transition.

A rival US-backed project is under way to upgrade the colonial-era Lobito Corridor and ferry Zambia’s resources westward through Angola instead.

Agreed under former president Joe Biden through the US International Development Finance Corporation, Washington is lending $553mn to the railway in a model that brought in private investors such as Trafigura and Mota-Engil. The DFC, the US’s response to China’s state policy banks, was itself set up under Trump during his first term.

Although Trump’s gutting of US foreign assistance now spells uncertainty for Lobito too, experts say these sorts of commercial, strategic projects may also characterise Washington’s future engagement on the continent.

Trump’s presidency “signal[s] a complete change in the way in which the US perceives its interests in Africa”, said Peter Doyle, a former senior IMF official now with the National Institute of Economic and Social Research.

But “anyone who thinks that the US is going to disengage in terms of pursuing its own interests in Africa and give that to China just really hasn’t spent any time in Washington”, he said.

Started in 1970, the Tazara railway was designed to help copper-rich Zambia access overseas markets after white-controlled neighbouring Rhodesia, today Zimbabwe, shut its borders in opposition to the country gaining independence from Britain.

Under Mao, Beijing forked out Rmb1bn in interest-free loans to build the Tazara, with thousands of Chinese labourers working alongside locals. At its peak, it ferried more than 1mn tonnes of copper, consumer goods and passengers annually.

“The Tazara to this day is still the biggest Chinese aid project implemented in Africa,” said Tim Zajontz, a lecturer at the University of Freiburg. “It continues to be a symbol of the Chinese-African all-weather friendship, as many officials on both sides often refer to it.”

China’s foreign assistance grew in ambition with BRI, which moved to interest-bearing loans, and has disbursed $1tn since 2013.

But Chinese lending to the continent peaked in 2016, with Beijing pivoting away from large sovereign-backed infrastructure projects to taking equity stakes in projects it then operates. Among recent examples are the state-owned China Harbor Engineering Company taking a minor share in Nigeria’s Lekki Port, and the China Road and Bridge Corporation’s three-decade concession of Kenya’s Nairobi Expressway.

“Small and beautiful” has become an official BRI phrase, with projects like the Tazara now typically financed with smaller public-private partnership loans, rather than through policy banks, and then run as concessions.

“China is ready to . . . implement 1,000 ‘small and beautiful’ livelihood projects,” President Xi Jinping said at the Forum on China-Africa Cooperation in Beijing in September, when he signed the memorandum of understanding with Zambia and Tanzania to upgrade the Tazara. Officials in Zambia and Washington told the Financial Times the deal could close as soon as this month. China’s foreign and commerce ministries did not comment.

Beijing’s influence is on display in Zambia’s Copperbelt province, the country’s mining heartland.

Chinese contractors are widening the highway, having already built local hydropower dams and a football stadium. Wedged between billboards of local Pentecostal churches and fast food outlets, signs in Chinese advertise supermarkets, car repair garages, hotels and heavy machinery shops.

At the Lying Dragon supermarket, where shelves were stocked entirely with Chinese imported goods, the Chinese store manager said business was booming.

While experts do not expect China to fill the void in humanitarian funding left by the US and others, it could expand its soft power in other ways, according to Cobus van Staden, managing editor at the China-Africa Project.

China may promote more projects like “model farms” in which Chinese and African universities collaborate on developing climate-resilient seeds. These are “not fully commercial, but are also not conventionally aid in the way that we understand it”, where aid is a type of charity, van Staden said.

Conversely, some experts suggest that US development assistance may start to look more like that of China.

Trump set up DFC during his first term to invest in emerging markets, competing against China’s construction sprees in the global South.

The DFC remains engaged in the Lobito project, according to people familiar with the financing, and is due to disburse part of its loan this month.

But even it is facing bigger questions from the new administration about its form and purpose, including whether it should focus on larger economies and take a harder line on countries that continue working with China.

Ben Black, Trump’s nominee to run the agency and son of private equity grandee Leon Black, wrote in a blog in January that the DFC should stop “pandering to the interest group-driven issue of the moment” and invest in Greenland, a territory Trump wants to annex from Denmark.

Questioning with a co-author, the venture capitalist Joe Lonsdale, why the US sent aid to Uganda while the east African nation attracted Chinese investment, Black asked: “Why are American taxpayers funding the groundwork for Chinese economic dominance?”

Zambia’s mines minister Paul Kabuswe was phlegmatic and said the country — which is aiming to hit 1mn metric tonnes of output annually and overtake the Democratic Republic of Congo as the continent’s top copper producer — did not feel the need to choose sides.

China is injecting up to $5bn into a new copper and cobalt fund that will help boost production, while the ministry is also shoring up investment in the “new Copperbelt” dominated by mostly western operators.

“What is happening in the geopolitical sphere will bring its own shocks, but that’s not something that’s going to affect what we’re [doing],” he said. “We will still stay the course.”

Life at the mines can be tough, however. Branham Chitalu, a worker at a Chinese-owned copper mine in the Copperbelt capital Kitwe, said Chinese mines in particular were unpopular. “Everybody is trying to leave,” he said. “The pay is peanuts compared to the other mines.”

However many Zambians care less about who is providing the money for projects than getting things done.

On a recent weekday, grandfather Wilson Mubanga sat in the Tazara’s faded Kapiri Mposhi station as his train, due to have set off an hour ago, waited to be fuelled. From past experience he expected the journey to Luchewe to see his family to take double its scheduled 12 hours.

“It’s very irritating,” he said. “Anyone who can fix this is welcome.”