By
Raphael Santos
July 31, 2023
Updated
October 25, 2024
Sustainability in the UAE is intertwined with a changing economic ecosystem and energy policy
The next three decades will be critical for the UAE to achieve its sustainability goals. National economic development is linked to a commitment to a sustainable future and investment in renewable energy projects, green technology and carbon neutrality.
The sustainability efforts have been made official with the 2017-2050 UAE Energy Strategy plan. The agreement will also help to reduce the global impact of climate change through national development agendas.
As a result of this ambitious and long-term strategy, key economic sectors in major cities such as Abu Dhabi and Dubai will be transformed to connect urban development with sustainable development goals.
The energy and mobility sectors will play an important role in the UAE's sustainability efforts to reduce carbon emissions. Learn more about the path to renewable energy that the Middle East is now embarking on.
The Plan: UAE Energy Strategy 2050
The plan was announced in 2017 and outlined the following objectives by 2050:
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Increase the share of clean energy in total sector production by 50%;
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Reduce the carbon footprint by 70%;
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Achieve AED 700 billion in savings;
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Increase individual and corporate consumption efficiency by 40%;
The UAE government is expected to invest a total of AED 600 billion in clean energy by 2050 to achieve these goals.
Investments are making headway in clean energy, which shows a global trend. In a recent interview, Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, said how important this move is for the market to avoid the constant cycles of high oil prices.
The major energy companies driving the growth
The energy and mobility sectors are two of the major sectors in the UAE, and its investments do not stop growing.
The energy field showed interesting insights into the stability of capital raised to date by major players and other exciting surprises.
We are indeed in a moment where new industrial technologies meet old ones.
Abu Dhabi National Oil Company (ADNOC)
ADNOC has been a great performer in the domestic and global energy industry. Its drilling unit recorded an increase of almost 50% in the third quarter of 2021.
The company went public in October of the same year, which explains its outstanding performance: the IPO was the largest ever on the Abu Dhabi Stock Exchange, and shares rose by more than 30%.
The company achieved the outstanding valuation you see in the chart by acquiring new rigs, reactivating others and expanding oilfield services.
ADNOC and EWEC: a partnership for clean energy
ADNOC signed with EWEC (Emirates Water and Electricity Company) its most significant agreement for the exponential decarbonization of its industrial activity. Launched in October 2021, the partnership allows up to 100% of the grid to be power supplied by EWEC's nuclear and solar energy sources.
This already promises to have a direct impact on the company's refined products. A good example of this is the aviation industry, as ADNOC is one of the largest fossil fuel suppliers in the industry and now presents itself as the leading company that can deliver the cleanest jet fuel.
The partnership guaranteed the I-REC Clean Energy certification (registered by EWEC) for ADNOC.
Abu Dhabi Hydrogen Alliance
ADNOC partnered with Mubadala and ADQ to create the Abu Dhabi Hydrogen Alliance. The partnership promises to develop a roadmap to accelerate hydrogen use in major state sectors. The agreement is quite strategic since all companies' expertise covers multiple stages of the hydrogen life-cycle: production, transport and end-use.
In March 2021, the Ministry of Energy and Infrastructure joined the partnership and then expanded its potential. The Ministry will facilitate national discussions on hydrogen and help create more business opportunities with other countries, thus increasing hydrogen exports.
The cleantech startups landscape
The startups in the energy sector had a great boom during recent years and are growing faster. We sure are seeing global competitiveness for sustainable clean energy gain more players from the Middle East.
The UAE is the most attractive ecosystem
in the Mena region for startups
Steven Griffiths, Khalifa University of Science and Technology
Green Ecosystem
UAE is sparing no effort to become the benchmark in sustainable energetic transition. Many policies are helping to strengthen that transition. For instance, the requirement that all buildings will have to implement solar panels by 2030.
The MENA region (Middle East and North Africa) stands out in this green ecosystem. Cities like Abu Dhabi are free zones for research and development centres and incubation for cleantechs, supported by Dubai’s US$27 billion Green Energy Fund.
Source: Frame Stock Footage/Shutterstock
Yellow Door Energy
Yellow Door Energy is the leading solar developer in the UAE and is increasing investment in innovation projects.
Yellow has set an ambition to install more than 11,600 solar panels on top of the Bahrain Mall and generate 10 million kilowatt-hours of clean energy in its first year of operation. That will increase the company's actual solar panel assets of 120 megawatts in the Middle East and Pakistan.
The company was awarded in 2021 for a solar panel project carried out for another UAE-based company, The Box Self Storage. The partnership was responsible for installing more than 630 solar panels (1,500 sqm of roof space) and then generating 800,000 kilowatt-hours of clean energy in the first year of operation.
According to his CEO, Jeremy Crane, the company is on the way to achieving $1 billion of assets by 2025.
The mobility tech landscape
We can not talk about the UAE without highlighting its mobility sector, which now shows impressive tech solutions.
The B2B mobility market in UAE has been a successful study case and still stands out with young companies but with good signs of maturity.
Fetchr could be saved again?
Fetchr was once the largest in the logistics industry for e-commerce and ended up facing bankruptcy. However, at the end of 2019, it participated in an emergency funding series. The $1 pay-to-play mechanism was used for the first time to encourage investors to participate.
Today, the company still faces a significant challenge due to its debt of 100 million in taxes and can proceed to complete liquidation. Whether the company will succeed again is something that only time will tell. That is something investors will be looking out for in the coming years.
TruKKer: Uber for trucks
TruKKer, unlike Fetchr, is on the rise as it has just been covered by the press for the acquisition of Pakistan's company TruckSher.
TruKKer, known for being almost like a Uber for trucks, is a digital platform that operates a fleet of over 35,000 trucks; and hopes to exponentially increase its presence in South Asia.
The primary demand of the company is (almost 70% of revenue) long-haul trucking across the Gulf Cooperation Council region. The freight logistics industry in the UAE is expected to be worth more than 30 billion by 2026.
A.I. has its own spotlight in the UAE tech ecosystem
The mobility sector in UAE has a huge startup ecosystem. So, it is no surprise that many of the investments are going to artificial intelligence, as is the case with Derq. The company is an industry leader in video data analysis to increase safety and efficiency on the roads, both for driver and autonomous cars, helping smart cities to be a reality.
Derq is an MIT-spinoff and a Techstars alum. Since its founding (2016), the company has raised more than $5 million.
Masdar City: where mobility and energy reaches the future
Starting in 2006, Masdar City's construction attracted the world's eyes because of its ambition to become a sustainable city model. The planning of different areas such as economy and architecture are all directed to a sustainable development approach.
A number of academics and journalists criticized the initiative saying that the city was not scalable, therefore, impossible to be replicated on a worldwide level. But that is another discussion, which is not the current intention of such an urban experiment.
Masdar City can now be seen as a lab city project for the emergence of pioneering green technologies. The Masdar Institute of Science and Technology itself is an important partner in this goal to evolve research and technological initiatives.
Masdar Capital and its biggest projects
Masdar City, Masdar Capital and Masdar Clean Energy are all the three business units from the conglomerate called Masdar, which is owned by the Mubadala Development Company (an Abu Dhabi Government organisation).
See in the chart below the biggest deals from Masdar Capital.
Solar Project of 2000 MW
Dungeon Offshore Wind
Dudgeon Offshore Wind is the highest-rated project/company of the above eight, currently worth nearly 2.5 billion dollars. The investment in 2014 occurred through 35% of shares acquisition previously owned by Statoil.
Shams 1
The Shams 1 Concentrated Solar Plant is the primary solar thermal power plant delivering renewable energy in Abu Dhabi. The project was formed through a joint venture between Masdar Capital (60%), Abengoa Solar (20%) and TotalEnergies (20%).
The solar plant has a total capacity of 100 megawatts and has helped annually reduce 175 tonnes of carbon dioxide.
Jordan Wind Project Company
The Jordan Wind Project Company was formed by three strategic partners: InfraMed (50%), Masdar (31%) and EP Global Energy (19%). The first result of that cooperation was the Tafilah Wind Farm (launched in 2015), a 117-megawatt wind power project and the first to operate commercially (utility-scale) in the Middle East.
Baynouna Solar Energy Company
Masdar inaugurated Jordan's Baynouna Solar Park, the country's largest clean energy initiative. With a capacity of 200 MW, the solar park generates 560 GWh of energy annually, powering around 160,000 households. It also helps reduce 360,000 tonnes of carbon dioxide emissions each year. The project was co-developed with Taaleri, a Finnish investment group.
Here you can see the current business status of those companies.
Masdar Timeline
Many external challenges delayed the city's sustainable development. The subprime crisis (2008) and the pandemic (2020-2021) have slowed the project considerably. It is now expected to be completed in 2030.
See the total amount of capital invested by Masdar Capital through the years according to Pitchbook:
In 2023, Masdar made a powerful comeback with their full-throttle investments in the remarkable $2 billion solar project in Zambia. Additionally, there are several other projects currently receiving funding from Masdar, although the specific details of these ventures remain undisclosed.
Grow your sustainable business with us
The energy and mobility sectors will continue to expand. The two businesses will keep bringing great opportunities for companies, including those with core activities different from the usual.
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