Chinese interest in Dubai Green Fund

MARRAKECH// Dubai is in discussions with international fin­anciers, including a Chinese government bank, to help provide financing for its US$27 billion green fund, the only such government initiative in the Arabian Gulf region.

Saeed Al Tayer, the managing director and chief executive of the Dubai Electricity and Water Authority (Dewa), today told The National in Morocco at the climate change conference (Cop22) that different financiers spanning from Asia to Europe were interested in joining the Dubai Green Fund.

“We have in China a government bank, and I think this is good because we will promote the green economy locally and internationally,” he said.

The fund, led by Dewa, the Dubai Supreme Council of Energy and Dubai Carbon, was launched last year to support green initiatives, for example through loans, but there has been little information released as to the plan of implementation including types of ­qualifying projects and companies.

The Dubai Green Fund is one of the central planks in Dubai’s Clean Energy Strategy 2050, unveiled last year, which sets a target for the provision of 7 per cent of Dubai’s energy from clean energy sources by 2020, increasing to 25 per cent by 2030 and 75 per cent by 2050.

The amount of funding from international banks is still unclear. “The bonds will come from the international market, but it’s difficult and premature to give a figure right now because our study isn’t complete,” Mr Al Tayer said.

The International Renewable Energy Agency (Irena), which is based in Abu Dhabi, today said that financial and industry players around the world are being lured into the UAE as the sector grows more profitable. “There will be new entrants to the financing of sustainability because they see it as a commercially viable outcome,” said Adnan Amin, Irena’s director general, in Marrakech.

He said that the ground will swell with different types of innovation taking place in policy, finance and technology with Dubai being at the “heart of the transition”.

“The Green Fund is going to drive securitisation at much higher rates than we’ve seen,” Mr Amin said.

Mr Al Tayer said that the reasoning behind the fund was to initially make it easier for individuals to secure low-interest loans for green projects, but that has expanded to include companies as long as the projects fall in line with energy efficiency and renewable energy guidelines.

Those working on the mechanism said that it would serve as a similar tool to that of financing from the International Finance Corporation (IFC), the lending arm of the World Bank, which gives investors of a particular project or company some reassurance.

Mr Al Tayer said that he hoped within six months that there would be a clear picture as to how this would move forward.

Follow The National's Business section on Twitter