Economic View

On major sustainability projects and partnerships

How do you assess the UAE and Abu Dhabi’s progress in building a more sustainable energy mix?

MOHAMED JAMEEL AL RAMAHI: The UAE has long emphasised preserving our ecosystems and developing communities in a sustainable way. The global challenges posed by climate change are being addressed by the UAE’s multilateral institutions, as well as at the government, corporate and social levels. In 2006, some 10 years before the UAE was the first Gulf nation to sign the Paris Agreement, Abu Dhabi was the first Arab government to set a voluntary renewable energy target for 2020. The emirate aimed to produce 7% of its power from renewable sources by that year, and it exceeded that goal. Meanwhile, at the federal level, the UAE recently announced a target to reduce carbon emissions by 23% by 2030, demonstrating the country’s firm commitment to the environment.

Masdar has an important role to play in this area. The company built the largest solar farm in the Middle East in 2009, producing 10 MW of electricity at Masdar City. In 2020 we concluded the financial close to establish the Al Dhafra solar photovoltaic independent power producer: with a generation capacity of 2 GW, it will be the largest solar power project in the world. A great effort has been made to raise awareness of the importance of renewable energy, since its large-scale potential was initially met with scepticism by the global community.

To what extent is Abu Dhabi positioned to have a green recovery from the pandemic?

AL RAMAHI: The appetite for green investment is gaining momentum, and this goes beyond renewable energy to include innovation across the entire sustainability spectrum – from the circular economy to energy efficiency. In this regard, the future of the Masdar City free zone looks promising for its tenants, which include Siemens Energy, Honeywell, G42 and many smaller enterprises.

Over 900 companies form part of the innovation ecosystem in the UAE. Many successful environment-related start-ups originate from the labs of Khalifa University’s Masdar Institute of Science and Technology, and we expect the same result from the recently established Mohamed bin Zayed University of Artificial Intelligence. 

Where does Masdar see the best opportunities for international expansion in the post-pandemic era?

AL RAMAHI: Today Masdar is one of the world’s fastest-growing renewable energy companies, investing or committing to invest in projects across 30 countries with a combined value of $2bn and a generation capacity close to 11 GW.

We have learned that a crucial aspect in the worldwide expansion of renewable energy is to guarantee the financial sustainability of investments across regions at various levels of development. For example, by the end of 2021 Masdar will inaugurate a solar farm in Uzbekistan that will be the largest in Central Asia. This project is the result of our participation in the World Bank’s Scaling Solar programme – a co-operative framework involving multilateral financial institutions and private sector companies that encompasses all the elements to adapt and scale renewable energy solutions in developing countries. The programme has significant potential to establish more renewable energy capacity in South-east Asia, particularly in Indonesia, where – building on our previous experience in the country – we are going to construct the world’s largest floating solar farm in the Cirata reservoir in West Java.

Therefore, international expansion requires finding the right partners and establishing adequate project frameworks. Since 2019 our expansion in Africa has been spearheaded by Infinity Power, a joint venture with Egypt’s Infinity Energy – a company in which the European Bank for Reconstruction and Development has equity. This mirrors our approach in India and the Indian subcontinent, where we are present through Hero Future Energies. 

In the US, which is a technologically advanced and extremely important market for us, our partnership with EDF Renewables is broad in scope, spanning eight projects in wind and solar energy, as well as battery storage. Moreover, thanks to the normalisation of relations between Israel and the UAE with the adoption of the Abraham Accords, our engagement with EDF Renewables has become key to exploring opportunities in Israel – not only in terms of developing projects, but also tapping into advanced technologies and know-how in the country.