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.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
'The Sky is Everywhere'
Director:Josephine Decker
Stars:Grace Kaufman, Pico Alexander, Jacques Colimon
Rating:2/5
NBA Finals so far
(Toronto lead 3-1 in best-of-seven series_
Game 1 Raptors 118 Warriors 109
Game 2 Raptors 104 Warriors 109
Game 3 Warriors 109 Raptors 123
Game 4 Warriors 92 Raptors 105
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Yuval Noah Harari, Jonathan Cape
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The specs
Engine: 1.5-litre turbo
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Torque: 230Nm
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Starting price: Dh79,000
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
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Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.