For many British businesses, oil remains central to their commercial relations with the Middle East. BP, for example, is keen to be part of the new concession for Abu Dhabi's main onshore oilfields that will be awarded as early as next year.
As such, the British government would have been keen to build on the charm offensive in support of business during the President Sheikh Khalifa's state visit to the UK this week. Earlier, there had been other initiatives that included a trip to the UAE by the prime minister David Cameron, and the creation of two task forces to promote trade ties with the Arabian Gulf.
But the President's visit also highlighted a new but growing element to business ties between the region and the West. Yesterday, Abu Dhabi's Masdar signed a memorandum of understanding (MoU) with the UK Green Investment Bank to jointly invest in British clean energy projects.
It builds on Masdar's involvement in the London Array, the world's largest wind farm that lies in the Thames Estuary, and its stated intent to act as an investor in renewable energy projects abroad.
The investment dynamics swing both ways, however, as Masdar's example shows. The Mubadala subsidiary in March inaugurated the Middle East's largest solar power plant, the Shams 1 project in Madinat Zayed. The 100 megawatt plant is a joint venture between Masdar, France's Total and Spain's Abengoa, and it is the first time that western companies have committed significant resources to renewable energy in the Middle East.
It will not be the last time. Abu Dhabi has a target to produce 7 per cent of its electricity from renewables projects by 2020, and Dubai wants to create a 1,000MW solar park on the outskirts on the city.
Devoid of the oil and gas resources enjoyed by many of its neighbours, Morocco wants to generate 2 gigawatts, or 42 per cent of its electricity, from renewable sources. First tenders for a capacity of 160MW have been awarded, and more deals are imminent, providing investment opportunities for western and regional players alike.
"Despite relatively low levels of installed capacity to date across the wind and solar sectors, the country's strong project pipeline, and activity in late 2012 in particular, indicates that this is about to change," said the consultancy Ernst & Young in a recent report on renewable energy.
But the biggest prize lies in Saudi Arabia, a country that is like no other identified with hydrocarbon production.
The kingdom urgently needs to diversify its sources of electricity to reduce the amount of hydrocarbons it burns to generate power. In 2010, 35 per cent of its oil and gas output went into the country's power plants, according to the consultancy Apricum. This figure will rise by 42 per cent by 2020 if the trend goes unchecked.
The solar industry is keenly awaiting the release of the first tenders in Saudi Arabia, expected to be for 500 to 800MW of power generation capacity. About six individual tenders are expected.
Investing in solar projects in the kingdom is not without pitfalls, and companies have to navigate a market without the benefit of past experience.
"The biggest risk is likely to come from unfulfilled promises by joint venture partners," Martin Mock, the Saudi Arabia country head at Belectric,said at the Emirates Solar Industry Association event in Dubai on Tuesday.
Foreign players keen to take part in Saudi Arabia's solar boom have to comply with government directives that call for local content in all projects. Apart from solving the country's energy conundrum, the renewable push has the direct aim of creating jobs for Saudis.
This puts solar panel manufacturers into a difficult position. Photovoltaic panel production capacity far exceeds global demand, pushing down prices and making solar power increasingly cost-competitive with other forms of power generation.
But the global oversupply also leaves many companies struggling, and several have already fallen by the wayside. Only players with a solid financial footing will be able to further expand their production base to accommodate Saudi Arabia's local content requirement, which reduces the scope of potential entrees.
Saudi Arabia is also an exercise in patience for solar companies. Many industry insiders expected the first tenders to be announced during a recent symposium organised by the King Abdullah City for Atomic and Renewable Energy, the government body behind the solar drive.
But these hopes were left unfulfilled, as the country's decisionmakers prefer to move cautiously.
Yet Saudi Arabia has attracted strong interest from the industry, and the kingdom's renewables drive will focus its bid to strengthen business ties with the Middle East in an area that few had anticipated a few years ago.
