Portugal supports IRENA base at Masdar

Manuel Pinho, the Portugese minister of economy, has pledged his country's support for the UAE's bid to host the Renewable Energy Agency's headquarters.

Portugal will support the UAE's bid to host an international agency dedicated to renewable energy at a vote later this month, a top official said yesterday, adding an influential voice to a growing bloc of support. Since becoming a founding member of the International Renewable Energy Agency (IRENA) in January, the UAE has mounted a high-profile campaign to bring the group's headquarters to Masdar City, the carbon-neutral development at the edge of the capital. IRENA's 83 member-states will vote on June 30 to establish the headquarters. The UAE, Denmark, Germany and Austria have all expressed an interest.

Placing the headquarters in Abu Dhabi, a major oil producer and emerging economy, "makes total sense", said Manuel Pinho, the Portuguese minister for economy and innovation. "It sends an incredible message to the world because this means that oil producers are concerned about creating a sustainable future," he said on a visit to Masdar City. IRENA is modelled on the Paris-based International Energy Agency, and was created to provide information and help co-ordinate energy policy among member states.

Hosting the agency at Masdar City would give a big boost to the Government's investments in renewable energy, and to Masdar's own efforts to attract the world's pre-eminent green energy experts to the Masdar Institute of Science and Technology (MIST) at the city. Although Portugal is one of Europe's smaller economies, it has established itself as an important player in the renewable energy industry through investments in wind and hydropower. Renewables now generate 43 per cent of the country's electricity, placing it fifth in the world, and the government has set a goal of generating 60 per cent of power from green sources by 2020.

Portugal's support was announced a day after Tony Blair, the former prime minister of Britain, said he backed the UAE, and a week after Ban Ki-moon, the UN secretary general, said the UAE had a "strong argument" to host the headquarters. "Locating IRENA in the developing world would send a powerful signal that all nations must participate in the transition to a sustainable future, and that we are committed to not leave developing nations behind," Mr Blair told WAM, the state news agency.

Over the past month, envoys from a large group of developing countries have expressed support for the UAE in interviews with local media, including Armenia, Vietnam, Pakistan, Bangladesh and Kenya. Sheikh Abdullah bin Zayed, the Minister of Foreign Affairs, has been on a tour of IRENA members to garner support for the UAE. In its formal bid, the Government has offered the headquarters rent-free in Masdar City, 20 IRENA scholarships at MIST, and up to US$50 million (Dh183.6m) annually in "soft" loans for renewable projects in emerging economies.

The total level of support would come to $22m a year for the first seven years, the Government said, and $15m annually after that. Mr Pinho threw his support behind the bid while on a visit to promote business ties with his country. Portugal would welcome UAE investment in its hotels, he said, while Portuguese energy companies could be interested in establishing a presence at Masdar City. Early last year, the International Petroleum Investment Company (IPIC), a government investment fund, bought a 2 per cent stake in Energias de Portugal (EDP), the main utility in the country.

Mr Pinho said the investment could open up opportunities for IPIC to invest in wind projects with EDP in the US, or invest jointly with other Portuguese firms in developing more sophisticated electricity grids. "Our goal is to gain your trust and feel that it makes sense, that you like what we're doing on the energy side, on the technology side," he said. [e-mail]