Masdar Capital confident despite investment struggle

Masdar Capital says it having trouble finding opportunities on its home turf two days after the UAE showcased a US$100 billion opening for alternative energy investment in the next decade.

Abu Dhabi's clean tech fund is having trouble finding companies it can invest in on its home turf.

Masdar Capital, the investment arm of the Government's clean energy initiative, has found only one UAE company in which to invest, said Alex O'Cinneide, the investment arm's director.

The comments come two days after the Ministry of Economy predicted a US$100 billion (Dh367.3bn) opening for alternative energy investments in the UAE in the coming decade.

"We're looking for investment opportunities in the region, absolutely," said Mr O'Cinneide. "But that said we're focused on best-in-class or specific types of renewables, whether that is in Silicon Valley or Shanghai."

Masdar Capital manages more than $540 million, which it uses to invest in companies in recycling, solar power, waste-to-energy and other technologies. It has deployed a little under half of that on 15 companies, mostly in the US and Europe, and is expected to announce its next investment soon.

But in the region the outlook is less promising, with fewer proposals coming in from local businesses and fewer policies in place to encourage alternative energy growth, such as the subsidies for solar power that have allowed renewable energy in Spain and Germany to bloom.

"We want to be in places where we feel there is some government incentive to put through these technologies," said Mr O'Cinneide.

The only UAE company in which it has invested is Enviromena, a solar developer the most prominent work of which is a 10-megawatt solar park in Masdar City, Masdar's planned carbon-neutral development on the outskirts of the capital.

Mr O'Cinneide said Masdar Capital held a "significant position" in the company but would not specify how much.

Masdar put down $150m of the $540m raised by Masdar Capital.

The company has a "full pipeline of deals" for the more than $200m that it has not yet committed, and is open to the possibility of launching a third fund.

"Masdar Capital has proven it can raise capital in one of the harshest environments," said Mr O'Cinneide. "We think we have the ability to raise capital in whatever economic climate we are faced with."

Published: July 14, 2011 04:00 AM


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