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Abu Dhabi’s Masdar City project not affected by Dubai bailout

Alexander Richter 18 Dec 2009

Abu Dhabi says its bail out of its debt-laden neighbour Dubai would not affect its plans to invest $15bn in renewable energy ventures of Masdar.

According to local news, “Abu Dhabi’s state-owned green energy firm Masdar said the emirate’s decision to bail out its debt-laden neighbour Dubai would not affect its plans to invest $15bn in renewable energy ventures.

“All of our investments and projects have been carefully developed, carefully managed and carefully financed so we are really not exposed,” Masdar Chief Executive Sultan Al Jaber said.

“I can comfortably tell you that none of our announcements are being sidelined or put on hold.”

Abu Dhabi’s decision to throw its neighbour a $10bn lifeline has raised concerns that the emirate may have overextended itself.

Last year, Masdar unveiled ambitious plans to invest $15bn in renewable energy projects such as the world’s flagship carbon-free city in Abu Dhabi.

Masdar hopes the initiative will earn Abu Dhabi a reputation as the world’s main development hub for renewable energy, not wholly reliant on oil profits for its wealth.

Jaber said this project was advancing but there was a possible one-year delay to the city’s opening, pushing back the launch to 2019 or 2020.

“There could be a potential one-year delay, not because of financial constraints but because of the technology advancements we are trying to utilise,” he said, adding that geothermal power sourced from underground heat will form an important part of the green city’s electricity mix.

He said Masdar is also studying other geothermal projects and will announce further green energy initiatives in January.

On Monday, the firm signed a contract worth nearly €2bn with Germany’s E.ON and Denmark’s DONG Energy to develop the world’s largest offshore wind project in the Thames Estuary, near London.

The companies said in a statement work for first phase of the project, which would provide 630 megawatts, would start early in 2011 and complete by the end of 2012. In May, the consortium said it would invest €2.2bn ($3.23bn) for the first phase of the world’s largest offshore wind farm project, giving a boost to the UK plan to build up massive offshore wind farms to meet its carbon reduction target.

A firm commitment from the more than 190 countries at the Copenhagen climate change summit on emissions targets could lure more investors to companies like Masdar.

The company is still looking for partners for future projects and has not yet found full financing for the $15bn already pledged.

While Jaber expects the Copenhagen climate change summit to benefit the green energy industry, he was not hopeful of a binding agreement.

“I’m not in any way expecting that we will have a deal sealed in Copenhagen,” he said, adding that the ability of the summit to attract high-profile decision makers was an achievement in itself.

“But I’m very confident that by the time we have finished we will have a much clearer, more robust, transparent understanding of what is required for us to get to that point where a deal can be put in practice,” he said.

“I belive this is going to be a major stepping stone to a much larger discussion.”

Source: The Peninsula Qatar