Masdar in Mauritania solar project



Alternative energy has become part of the UAE's international aid efforts, after Masdar yesterday launched a solar plant in Mauritania.

The 15-megawatt solar array, constructed by Masdar and funded by the UAE Government, will increase the country's power generation capacity by 10 per cent during sunlight hours, Masdar said.

It is the largest photovoltaic (PV) solar plant in Africa, according to Masdar.

"Electrification, through sustainable sources of energy, is critical in ensuring our people have access to basic services and is a step toward improving our infrastructure and long-term economic development," Mauritania's president, Mohamed Ould Abdel Aziz, said at the launch.

The Sheikh Zayed plant in the country's capital, Nouakchott, provides electricity to 10,000 homes.

Developing new sources of power is crucial for the country, as demand is growing at 12 per cent per annum in Mauritania, a Maghreb state in West Africa with a population of about 3.5 million.

"Renewable energy has the potential to be a major contributor to the energy mix in developing countries where access to conventional energy is limited," said Sultan Al Jaber, Masdar's chief executive.

"With energy demand expected to nearly double by 2030, renewable energy will play an increasingly important role." The solar plant is operated by the Société Mauritanienne D'electricité, Mauritania's government utility.

The country's conventional power generation capacity lies at 144MW, most of which is produced by costly and polluting diesel generators.

Masdar, Mubadala's clean energy subsidiary, last month launched the 100MW Shams-1 concentrated solar power (CSP) plant in Abu Dhabi, the largest of its kind in the Middle East and North Africa (Mena) region.

The company is tasked with building a renewable energy portfolio that will provide the emirate with 7 per cent of its electricity by 2020. It is also looking for business abroad, and Masdar has identified Africa as a growth market. After a slow start, Mena has woken up to the potential of solar power and major programmes have been initiated in Saudi Arabia and North African countries.

Masdar is keen to use its expertise to capitalise on regional solar ambitions. It can now boast experience in launching both CSP and PV solar technologies in desert conditions.

Over the past 35 years, the UAE has handed out US$35 billion (Dh128.55bn) in loans, grants and assistance in development projects, according to the Ministry of Foreign Affairs.

Last year, the UAE was the 16th largest foreign aid donor, according to a report by the Organisation for Economic Co-operation and Development, which calculated the percentage of gross national income given as aid.

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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.”

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May 20, final