Masdar City Free Zone
Masdar City is a unique economic zone in Abu Dhabi that is approved under Law No. 22 of 2007, issued by His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, in his capacity as Ruler of the Emirate of Abu Dhabi. This law establishes Masdar and authorises it to set up unique economic zones in the emirate.
As such, the city is one of five units within Masdar. The other four units are the Masdar Institute of Science and Technology, Masdar Power, Masdar Carbon and Masdar Venture Capital.
With Masdar, Abu Dhabi is making investments at each step of the development lifecycle within the renewable energy and sustainable technology sector. Masdar is engaging the entire world – from political leaders and policy-makers to scientists and engineers – in a focused search for solutions to the problems that challenge humankind’s very survival: security, climate change and innovation in sustainable technology.
There are four essential reasons the Abu Dhabi leadership has created Masdar.
Firstly, Abu Dhabi has launched into a two-decade programme to transform its economy from one based on natural resources to one based on knowledge and innovation, and the export of cutting-edge technologies. Masdar will ensure that the renewable energy and sustainable technologies sector plays a big part in this knowledge-based economic diversification and becomes a major supply of high-value-added exports.
Secondly, the Emirate’s leadership has well learned the lessons of traditional desert living, where sustainable practices and resource safeguarding are not just slogans, but are essential to survival within the harsh environment. Because of that, the leadership of Abu Dhabi understands the tremendous challenges of global warming, environmental degradation as well as the need to find sustainable energy sources that face humanity.
Thirdly, Abu Dhabi has traditionally played a leading role in global energy markets as a considerable hydrocarbon producer. With Masdar, it seeks to leverage its substantial resources and experience in this sector to maintain its leadership position in an evolving world energy market that is ever increasingly looking to renewable energy. Through Masdar, Abu Dhabi aspires to become an international hub for renewable energy and innovative energy technologies, thereby balancing its already strong hydrocarbon position.
Fourthly, by chasing investments, partnerships, activities and operations across the entire clean technology lifecycle, Masdar seeks to aid the development, commercialisation and adoption of renewable energy and sustainable technologies – both in Abu Dhabi and the UAE, and internationally. As a result, Masdar will contribute to a sustainable future for Abu Dhabi and for the global community as a whole.
The other components of Masdar are:
Masdar Institute of Science and Technology
The Masdar Institute of Science and Technology is a private, not-for-profit, independent, research-driven institute produced with the support and cooperation of the Massachusetts Institute of Technology (MIT). Focused on the science and engineering of advanced alternative energy, environmental technologies and sustainability, the Masdar Institute will be at the heart of the home-grown research and development society at Masdar City and will ultimately host up to 600- 800 Master’s and PhD students and more than 100-150 faculty by 2015.
The graduate programmes combine education, research and scholarly activities to prepare graduate students to be innovators, creative scientists and researchers, and critical thinkers in the areas of technology development, systems integration and policy.
Being a crucial source of research and development, the institute is at the heart of the whole Masdar initiative, essential to its core objectives of improving Abu Dhabi’s knowledge economy and finding solutions to humanity’s toughest challenges. The university aims to be one of the world’s leading academic institutions in the fields of alternative energy and sustainable technology. The high quality of its students and faculty, as well as its unique location within Masdar City, will enable it to achieve these objectives.
As a renewable energy power project developer, Masdar Power adds renewable energy to the power generation mix on a world wide scale. The unit makes direct investments in individual utility scale projects in all areas of renewable energy and sustainability, with a focus on concentrated solar power (CSP), photovoltaic solar energy and offshore wind energy.
Masdar Power is producing a 100MW CSP plant in the Western Region of Abu Dhabi called SHAMS 1. International projects include the 1GW London Array offshore wind farm and a wind farm in the Seychelles that will supply 25% of the island’s energy requirements. The unit is also developing a 500MW low carbon power plant in Abu Dhabi that uses advanced technologies to make hydrogen power economically viable today by feeding the CO2 into the CCS network to be developed by Masdar Carbon.
Global warming is largely a result of CO2 emissions, and Masdar Carbon seeks to reduce these as well as other greenhouse gases within the atmosphere through investments in Clean Development Mechanism (CDM) projects and large-scale car- bon-abatement schemes, especially carbon capture and storage (CCS).
Masdar Carbon provides benefit to industrial asset owners by monetising carbon emission reductions under the provisions of the United Nations led CDM framework of the Kyoto Protocol. Masdar offers an end-to-end solution which includes carbon finance, project identification and management, technology sourcing project analysis and registration at the United Nations.
Masdar Carbon’s geographic focus under the CDM will be the Middle East, Africa and Asia. Sector focus is on oil, gas and power, with certain emphasis on energy efficiency. Masdar’s CDM project portfolio features a diversified range of projects that focuses on gas flaring reduction, gas leakage reduction, combined heat and power, industrial CO2 recovery and solar power.
Masdar Carbon is also developing one of the world’s most ambitious large-scale CCS projects. CO2 emitted from power plants and heavy industry will be captured, brought in via a highly advanced national pipeline network and injected into Abu Dhabi’s reservoirs for advanced oil recovery (EOR).
CCS Phase 1, currently at the front-end engineering and design stage, is predicted to catch around 5 million tons of CO2 per year and begin its operations by 2015. Phase 1 includes four carbon capture facilities covering various applications in power generation and industry.
Masdar Venture Capital
Growing global awareness of the potentially critical impact of climate change on the Earth’s natural environment is helping drive strong growth in the multi-hundred-billion-dollar cleantech and renewables marketplace. Masdar Venture Capital seeks to build a portfolio of top-tier investments across this diverse sector.
A number of the major factors stimulating the clean-tech industry include regulatory actions in favour of cleantech businesses, improved cost efficiencies of once non-competitive clean technologies and heightened public awareness of climate change. Masdar Venture Capital will focus on investments in the following sectors:
- Clean energy: including power generation and storage technologies, transportation technologies, cleantech/clean energy innovation, and sustainable biofuels.
- Environmental resources: including water and waste management, and sustainable agriculture technologies.
- Energy and material efficiency: including developments in advanced materials, building and power-grid efficiency, and the enabling technologies.
- Environmental services: including environmental preservation and business services.
Investment in these markets is made via two funds: the Masdar Clean Technology Fund (MCTF), created in 2006, and the DB Masdar Clean Tech Fund (DBMCTF), launched in 2009. MCTF, a fully deployed $250 million fund invested $45 million in three cleantech funds and the remaining $205 million in 12 direct investments in companies, as lead or co-lead investor. It was launched in conjunction with partners Consensus Business Group, Credit Suisse and Siemens AG.
DBMCTF, which raised US$265 million in its first close, has an initial investor group led by Siemens and including the Japan Bank for International Cooperation, Japan Oil Development Co. Ltd., Nippon Oil Corporation, Development Bank of Japan and GE.
Both funds follow an active management investment strategy that seeks to catalyse portfolio companies’ growth and scale-up by providing capital and management expertise. The preferred investment amount is between US$5-25 million and seeks to realise strong market standard return per the risk. Through these funds, Masdar Venture Capital also seeks to demonstrate, commercialise and advertise renewable technologies in the UAE, and to identify opportunities in which synergies may exist between its investments and other Masdar activities, as well as the long- term energy and development programme of the UAE.