11 November 2008 00:00 [Source: ICB]
Abu Dhabi invests in clean technologies for future energy sources
Doris De Guzman/New York
IT COULD be that Abu Dhabi, the capital of the United Arab Emirates, confirms the idea that a never-ending crude oil source in the Middle East is just a mirage.
Abu Dhabi emirate is investing $15bn (€12bn) in the development and commercialization of renewable energies and sustainable technologies worldwide under a program called the Masdar Initiative. Masdar means "the source" in Arabic.
The initiative was launched in April 2006 by the Abu Dhabi Future Energy Company (ADFEC), a wholly owned subsidiary of Abu Dhabi-based public investment company Mubadala Development.
"Masdar is an open platform, a center for global collaboration in energy where more than 100 global corporate, industrial, academic and financial partners are actively working together and creating the future of energy," Masdar CEO Sultan Ahmed al-Jaber said in a speech at the World Future Energy Summit, held in January in Abu Dhabi.
He added: "You may be asking why would Abu Dhabi proactively seek a key role in alternative energy? The answer is because we can, and we should." Through Masdar, Abu Dhabi will maintain its position in world energy markets and establish a new economic sector in the region that will revolve around renewable energy, Al-Jaber said.
To get its investment rolling, in September last year, Masdar launched the Masdar Clean Tech Fund, a $250m (€194m) diversified venture capital investment vehicle, in partnership with Swiss bank Credit Suisse, UK-financial adviser Consensus Business Group, and Germany's Siemens conglomerate.
$60m of the fund has been invested in venture funds focusing on cutting-edge clean technology, while $190m targets direct investments in companies sourced by the fund and coinvestments alongside fund managers.
Masdar's portfolio now includes a 20% stake in an offshore UK wind farm a significant stake in Finnish wind turbine manufacturer WinWinD 40% of Spanish solar joint venture company Torresol Energy and a $230m thin-film photovoltaic (PV) factory being built in Germany.
The 70 megawatt (MW) PV plant, which broke ground in August, will open in the third quarter of 2009 and will act as a blueprint for technology and knowledge transfer to Masdar's 140MW PV plant being built in Abu Dhabi. The Abu Dhabi PV plant will start production in 2010.
"Abu Dhabi's geography makes thin-film PV a natural focus for Masdar," Al-Jaber noted in a statement. "Germany is an ideal partner with its technology, highly skilled workforce, attractive investment climate, and direct access to the European market."
Masdar is also planning to build in Abu Dhabi the world's largest hydrogen power plant with carbon capture and storage capability. Masdar is collaborating with UK oil major BP for the project, which is expected to start construction by early 2009 and come on stream in 2012.
But, Masdar's most ambitious project to date is the building of Masdar City, which is to be the world's first zero-carbon, zero-waste, car-free city powered by renewable energy.
The total development budget for the 6.5km2 (2.5 square mile) district is estimated at $22bn, $4bn of which will be contributed by Masdar, the rest capital raised from direct investments and funds, said Al-Jaber.
"If we get it right, we will literally reengineer the modern city - whose buildings today consume 65% of all energy in the world - into a model of efficiency and sustainability," he said. "If you're looking for solutions with global scale and impact, then this is certainly a place to start."
The first step in the city's seven-phase plan was the formation of the Masdar Institute of Science and Technology (MIST) in collaboration with the US-based Massachusetts Institute of Technology (MIT). MIST is geared to be the world's first graduate university dedicated to renewable energy and is scheduled to open its facilities in Masdar City in September 2009.
Masdar City is expected to be completed in 2016, with 30% of the district zoned for housing 24% for business and research 19% for service and transportation 13% for commercial purposes including light manufacturing 8% for civic and cultural pursuit and 6% for MIST. The city is expected to accommodate 50,000 residents and 1,500 businesses.
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