The Abu Dhabi Department of Economic Development (ADDED) has teamed up with UK-based private equity fund HYCAP to produce, store and transport green hydrogen, according to Abu Dhabi’s press agency.
The agreement lays the groundwork for an industrial complex built by ADDED’s Industrial Development Bureau (IDB) in partnership with HYCAP. The complex will include an electrolysis plant, a hydrogen storage facility and hydrogen tankers for transportation, contributing to the “advancement of renewable energy sources”.
IDB’s executive director Arafat Al Yafei said: “We are delighted to have signed this agreement with HYCAP, which is an important step along the road to make AD the most competitive industrial hub in the region.
“This is part of the partnerships we are building with leading global powerhouses to enable our manufacturing sector to achieve the Abu Dhabi Industrial Strategy’s (ADIS) goals.”
Emirati officials are looking to turn the UAE into a top ten producer of green hydrogen by 2031, with an annual output capacity of 1.4 million tonnes. Green hydrogen is a renewable energy source widely seen as a method to reduce greenhouse gas emissions.
At the World Investment Forum in October 2023, Richard Bolwijn, director of investment research at UNCTAD – the UN’s investment arm – said that public-private partnerships (PPPs) consisting of governments and companies are increasingly crucial towards advancing green energy goals.
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Bolwijn commented: “You can lower it by joining forces to de-risk investment. In renewable energy projects in developing countries, if you bring in an international investor, you can reduce the cost of debt by about 10%. If you bring in an international investor, a multilateral development bank, and work in partnership with the government, you can reduce it by 40%.”
The newly proposed industrial complex is not the first one to produce and store green hydrogen in the UAE. In May 2021, German energy company Siemens Energy proposed building a green hydrogen plant in Dubai. The project, previously called the “first industrial scale, solar-driven green hydrogen facility in the Middle East and North Africa”, uses solar and wind power to produce green hydrogen, marking a stride away from the country’s heavy reliance on fossil fuels.
Speaking about the green hydrogen project in Abu Dhabi, HYCAP Group chairman and founding partner Jo Bamford said: “We opened our offices in the UAE to place HYCAP Group at the centre of the world’s emerging green hydrogen hubs. The UAE is leading the transition to clean, renewable energy and this agreement with the Abu Dhabi Department of Economic Development is a demonstrable example of the commitment in the region to grasp the opportunity this presents.”