Abu Dhabi Funds More Clean Energy Projects in Developing Countries

The United Arab Emirates is home to the world’s eight largest oil and gas reserves, which has allowed for the transformation of Abu Dhabi and Dubai into ultramodern cities boasting some of the world’s most bombastic architecture and infrastructure projects. All that money from oil—and Abu Dhabi hosts 94 percent of the country’s lucrative commodity—has also allowed the country to fund a bevy of foreign assistance programs that creates global impact far outsizing its population of 1.4 million locals (the other 6.8 million people living in the UAE are foreign nationals).

One key organization providing development assistance worldwide is Abu Dhabi Fund for Development (ADFD), which was founded around the same time the UAE gained independence in 1971. This foreign aid agency has distributed US$7.3 billion in loans and US11.5 billion in grants over the past 45 years. Long focused on the funding of projects that aim to reduce poverty worldwide, in recent years ADFD has added clean energy projects to its portfolio. In a partnership with the International Renewable Energy Agency (IRENA), ADFD is now financing solar and wind power projects worldwide. At a press conference the day before the annual Abu Dhabi Sustainability Week launched, ADFD and IRENA announced four new projects in the Caribbean and Africa.

These projects in Antigua and Barbuda, Burkina Faso, Cabo Verde and Senegal together will receive low-interest loans totaling US$46 million. These four new programs are part of a wider US$350 million, seven-year initiative to fund clean energy installations in developing nations. The largest project this funding cycle is in Antigua, where a 4 megawatts of wind and solar installations will provide power that will in part desalinate water.

Within Africa, a total of US$41 will finance various solar and wind power projects. In Burkina Faso, what IRENA describes as a 3.6MW photovoltaic mini project will provide electricity to over 12,000 families. A hybrid PV and wind project will allow the Cabo Verde island of Brava, home to 6,000 people, become powered completely by renewables. Finally, two megawatts of solar installations spread across Senegal will help to electrify rural villages.

At a press conference held during IRENA’s annual assembly, the agency’s Director-General, Adnan Amin, said, “While renewable energy resources are abundant in many development countries, adequate finance can still be a barrier to deployment.” The alliance between these two agencies is one way to boost renewables in developing nations, many of which are importing expensive and dirty diesel to create electricity when, in fact, they have plenty of wind and sun that could be harnessed instead. IRENA receives proposals for such projects and vets them in order to select the ones showing the most potential; ADFD then provides the loans, which have an interest rate between one and two percent.

Abu Dhabi has been the focal point of similar clean power development projects the past several years. Masdar, for example, has also partnered with ADFD to install wind and solar projects in the South Pacific and Seychelles. Over time all of these projects, while small at an individual scale, add value by helping organizations such as IRENA and Masdar to develop best practices so that future projects can become better constructed, more efficient and most importantly, expand clean energy access in regions that can benefit from renewables the most.

Indeed, these projects, and Abu Dhabi’s commitment to IRENA and its goals, show the Emirate is serious about playing a role in sustainable development. Even more importantly for the broader picture, these solar and wind projects demonstrate that renewables are a business opportunity, even in the most remote rural regions. And the multiplier effect energy access has will engender even more open doors for small business, social enterprise and lifting people out of poverty.

Image credit: Ingo Wolbern

Disclosure: Leon Kaye’s trip to Abu Dhabi was paid for by Masdar