DUBAI, 28th June, 2022 (WAM) -- A leading US newspaper highlighted the UAE's efforts to invest in renewables and position itself at the centre of the global energy transition.

In an information-rich article by its Dubai-based reporter, Rory Jones, The Wall Street Journal said the UAE is "emerging as one of the world’s biggest state financiers of clean energy, seeking to become as influential in renewables as it currently is in oil and gas."

The paper shed specific light on the fact that while the UAE lays focus on renewables, the country "also remains a major investor in traditional oil and gas."

Following is the article published by the American daily: "The United Arab Emirates is emerging as one of the world’s biggest state financiers of clean energy, seeking to become as influential in renewables as it currently is in oil and gas.

Since November, when global nations agreed to accelerate emissions-cutting plans at a United Nations summit, the UAE has said it will fund development of thousands of megawatts of solar-energy projects in countries across the world. It has committed $400 million to enable developing nations’ transition to clean energy and pledged to help supply green electricity to 100 million Africans by 2035.

The Gulf state, alongside the U.S., also has promised to raise $4 billion to invest in technologies that would transform agriculture and food production to limit climate change.

Emirati officials hope the bet on clean energy won’t only help diversify the country’s oil-dependent economy but increase its diplomatic clout and shift perceptions of the Gulf state.

Already, the renewables arm of Emirati sovereign-wealth fund Mubadala Investment Co. has deployed more than $20 billion in clean energy projects since it began investing in renewables in 2006, outstripping other state investors or public pension funds, according to New York-based research firm Global SWF, though U.A.E. investment in oil-and-gas related businesses remains higher.

By the end of this decade, the U.A.E., the world’s seventh-biggest oil producer, wants to invest and develop projects generating up to 100 gigawatts of clean energy at home and abroad, four times its current deployment and commitments.

To achieve that goal, the government is now bringing together its national oil company and power-generation firm with Mubadala to own jointly the country’s renewable investment and development arm, Masdar. The merger will consolidate renewable assets under one brand and help the government to achieve net-zero emissions by 2050.

Sultan al-Jaber, the country’s climate envoy and minister of industry and advanced technology, said that change could only be tackled alongside hydrocarbon-producers who help manage the global transition to clean energy.

"We can’t continue to view oil and gas as a challenge," Al Jaber, who is also the CEO of the national oil firm ADNOC and Chairman of Masdar, said in an interview. "Oil and gas should be seen as the bridge as part of the solution."

It is a view shared by U.S. Climate Envoy John Kerry, who since taking on his role in 2020, has visited the U.A.E. twice to muster support among Gulf states for accelerating cuts in emissions targets. The U.S. wants to use Emirati financial firepower and energy know-how to encourage others to invest in transitioning their economies to clean energy, a senior U.S. government official said.

"Any oil-producing country that begins to step up and indicate their acceptance of the reality of the need to build up for a transition is a critical message to the rest of the world," Kerry said last month at the World Economic Forum in Switzerland.

U.A.E. efforts to position itself at the centre of the global energy transition, and back an important Biden administration policy, come as the Gulf state is at odds with the U.S. over Russia’s invasion of Ukraine.

While the U.A.E. has said it will encourage partners in the OPEC oil alliance to boost production to tame global prices a U.S. goal, the country hasn’t said it will enforce sanctions on Russia and instead is welcoming Russian companies and wealth.

Even as it focuses on renewables, the U.A.E. also remains a major investor in traditional oil and gas. Over the six years from 2016 until last year, Mubadala invested $9.5 billion in 16 oil-and-gas related businesses, or so-called black investments, the most of any state-owned investor other than the Qatar Investment Authority, according to Global SWF.

Investments by Emirati sovereign-wealth funds in black investments have outpaced green deals for each of the past six years, the research firm said. Globally, state-owned investors, which includes sovereign-wealth funds and public-pension funds, invested three times as much last year in green as black deals, it added.

Still, the U.A.E. investment in renewables reflects both a push to win friends diplomatically by helping them with their climate goals, and recognition that there is an opportunity to make money from a growing sector, according to Robin Mills, chief executive of Dubai-based consulting firm Qamar Energy and a former manager in the Emirati oil industry.

A solar plant in Masdar City outside Abu Dhabi, U.A.E. in 2015. Emirati officials hope the bet on clean energy will increase its diplomatic clout.

Many of the countries where Masdar is developing or funding renewables projects aren’t being considered by Western developers, who are themselves relative novices in building large-scale renewables projects, he said.

"It is such a new thing at this scale that everyone is learning as they go, so it makes it easier to get into than trying to break into an existing business," he added.

Earlier this month, Masdar signed an agreement with Azerbaijan to develop 4,000 megawatts of onshore wind, solar and green hydrogen capacity across several projects, with the right to develop a further 6,000 megawatts.

In May, Jaber visited India where the Emirati agreed to support that country’s ambition to achieve 450 gigawatts of renewable-installed capacity by 2030. In April, Masdar said it would explore renewable opportunities with Kyrgyzstan’s government, following agreements in recent years with Iraq, Morocco, Armenia and Kazakhstan.

In Indonesia, Masdar in a joint venture with a local company has begun construction of a 145-megawatt solar plant that will float on a reservoir to provide electricity to power 50,000 homes.

Masdar typically co-invests with others, manages bank financing and constructs projects with partners based on a long-term agreement to supply power to a government or distribution company.

In November, the U.S. and U.A.E. helped broker an initial agreement for Jordan to supply Israel with electricity produced from solar-power at a planned Jordanian site, funded and developed by Masdar. In return, Israel will examine the feasibility of supplying water to Jordan via a desalination plant.

The U.S. publicly held up the energy swap though still being commercially negotiated as an example of the type of regional cooperation only possible after the U.A.E. normalised diplomatic relations with Israel in 2020.

The U.A.E.’s domestic clean energy push hasn’t always run smoothly.

In 2008, the government began construction on a carbon-neutral development on the outskirts of the capital Abu Dhabi, called Masdar City, with a goal of attracting tens of thousands people to live there. The financial crisis hit soon after and the project failed to win many corporate tenants, and was scaled back.

There was a hiatus in renewables projects for a few years, Mills said. But the U.A.E. renewed its focus, and successfully bid to house the permanent location of the International Renewable Energy Agency, an organisation with 167 member countries that promotes climate action.

The country also now operates one of the largest single-site solar plants in the world, with 3.2 million solar panels, and has plans for even bigger facilities, though renewables are currently a fraction of total energy supply.

Ólafur Ragnar Grímsson, the former president of Iceland and chairman of the Arctic Circle, a nonprofit focused on dialogue around the Arctic, said he remembered meeting Sultan in 2007 when the Emirati official sought his advice on becoming an international centre for renewable energy. "You could have argued at that time it was simply hot air," said Grímsson. "Paradoxically, Abu Dhabi, this oil-rich state, has become one of the most predominant clean-energy players in the world.""