The Abu Dhabi Department of Economic Development (Added) has teamed up with UK-based private equity fund Hycap Group for the production, storage and transport of green hydrogen in the emirate.
The Industrial Development Bureau (IDB), an Added unit, and Hycap will set up an industrial complex in Abu Dhabi to develop renewable energy sources, an electrolysis plant, a hydrogen storage facility and hydrogen tankers for transportation, the department said in a statement on Monday.
The project will support the Abu Dhabi Industrial Strategy, which involves an investment of Dh10 billion ($2.72 billion) to more than double the size of the emirate’s manufacturing sector to Dh172 billion by 2031.
“This is part of the partnerships we are building with leading global powerhouses to enable our manufacturing sector to achieve the Abu Dhabi Industrial Strategy’s goals,” said Arafat Al Yafei, executive director of the IDB.
The agreement is aimed at helping Abu Dhabi become “the most competitive industrial hub in the region”, he said.
The UAE, the Arab world’s second-largest economy, aims to reach hydrogen production of 1.4 million tonnes annually by 2031. The target is then to reach 15 million tonnes of annual production by 2050.
The country is planning to develop at least two hydrogen production plants – or oases – by 2031.
Last year, Hycap opened an office in Abu Dhabi Global Market to support its strategic expansion in the region.
The firm has also revealed plans for a UAE-based GCC fund that will invest in companies serving the net-zero energy transition and clean hydrogen supply chain.
“The UAE is leading the transition to clean, renewable energy and this agreement with [Added] is a demonstrable example of the commitment in the region to grasp the opportunity this presents,” said Jo Bamford, chairman and founding partner of Hycap.
Hydrogen, which can be produced from renewable energy and natural gas, is expected to become a critical fuel as economies and industries transition to a low-carbon world.
It comes in various forms, including blue, green and grey. Blue and grey hydrogen are produced from natural gas, while green is derived from splitting water molecules through electrolysis.
The global liquid hydrogen market is estimated to reach $66.3 billion by 2032, from $39 billion in 2022, according to Allied Market Research.