Abu Dhabi’s clean energy company Masdar has nearly doubled its clean energy capacity and carbon dioxide displacement in two years.
The company grew its renewable energy capacity to 20 gigawatts in 2022, producing 18,000 gigawatt hours of clean energy and reducing carbon dioxide emissions by 10 million tonnes, Masdar said on Thursday.
The company said it was “on track” to meet its goal of becoming one of the world’s largest renewable energy companies by 2030.
Masdar aims to grow its capacity to at least 100 gigawatts of renewable energy by the end of the decade.
“In the past 17 years, Masdar became one of the world’s largest renewable energy investors and drivers of the energy transition,” said Dr Sultan Al Jaber, Cop28 President-designate and chairman of Masdar.
“Our momentum will see us accelerate global clean energy growth, expand our renewable energy footprint and play a vital role in delivering the UAE’s Net Zero by 2050 strategic initiative.
“As the UAE prepares to host Cop28, we are keen to collaborate with all parties to help the world triple renewable energy capacity by 2030 and achieve the goals of the Paris Agreement,” added Dr Al Jaber, who is also the UAE’s Minister of Industry and Advanced Technology.
Masdar is active in more than 40 countries and has invested in or committed investments to projects worth more than $30 billion.
It holds a 50 per cent stake in the Big Beau solar project in California
Last week, Masdar signed an initial agreement with the International Renewable Energy Agency (Irena) to co-operate on a major research project that will lead to the tripling of global renewable energy capacity by 2030.
The agreement is expected to provide a global baseline for renewable energy with a focus on solar, wind, hydropower, geothermal and other technology, including battery storage.
Last year was "a pivotal year in our legacy of growth. Throughout our history, Masdar has proven to be a pioneering force for sustainable change", said Mohamed Al Ramahi, chief executive of Masdar.
“With a uniquely talented team and a strong network of partners behind us, the future promises to be even brighter for Masdar, the UAE, and the world.”
Masdar has developed a green finance framework to guide future financing, including issuing green bonds, emphasising sustainability and aligning with best financial industry practices.
The issuance of green bonds in the Middle East region grew by 38 per cent between 2016 and 2020, and in 2020 alone, Middle Eastern governments drove 97 per cent of green bond issuances, compared with 13 per cent four years earlier, according to the Boston Consulting Group.
“Sustainable financing is more in demand than ever. Through our work we are creating opportunities for financial institutions to become part of the green financing agenda and to really put sustainable investments at the core of everything they do,” said Niall Hannigan, chief financial officer at Masdar.
“Every dollar of debt capital we raise will be deployed into developing green projects across the globe to the highest ESG standards, and a substantial proportion of that deployment will be in developing countries.”
In December, Masdar announced its new shareholding structure as part of a deal with the Abu Dhabi National Energy Company, better known as Taqa, Mubadala Investment Company and Adnoc, along with the creation of a green hydrogen business unit.
Masdar plans to produce one million tonnes of green hydrogen every year by the end of the decade.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Gender pay parity on track in the UAE
The UAE has a good record on gender pay parity, according to Mercer's Total Remuneration Study.
"In some of the lower levels of jobs women tend to be paid more than men, primarily because men are employed in blue collar jobs and women tend to be employed in white collar jobs which pay better," said Ted Raffoul, career products leader, Mena at Mercer. "I am yet to see a company in the UAE – particularly when you are looking at a blue chip multinationals or some of the bigger local companies – that actively discriminates when it comes to gender on pay."
Mr Raffoul said most gender issues are actually due to the cultural class, as the population is dominated by Asian and Arab cultures where men are generally expected to work and earn whereas women are meant to start a family.
"For that reason, we see a different gender gap. There are less women in senior roles because women tend to focus less on this but that’s not due to any companies having a policy penalising women for any reasons – it’s a cultural thing," he said.
As a result, Mr Raffoul said many companies in the UAE are coming up with benefit package programmes to help working mothers and the career development of women in general.
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