ABU DHABI - Abu Dhabi's $250m Clean Tech Fund.

The Masdar Clean Tech Fund was officially launched in London on Nov. 13 at a reception under the patronage of Abu Dhabi Crown Prince Shaikh Muhammad bin Zayed. The $250m fund is a partnership between the Abu Dhabi Future Energy Co. (ADFEC) wholly-owned by Mubadala Development Co. (MDC), Credit Suisse and Consensus Business Group (CBG) of the UK.

The fund will invest in firms with promising clean energy technologies and sustainability-related technologies. Sultan Ahmad al-Jaber, CEO of ADFEC, said: "Sustainable energy and climate change are the two great concerns of our age and the race is on to develop cleaner and sustainable fuel sources. This quest is reminiscent of the space age or the industrial revolution. Our fund's objective is for Abu Dhabi to lead the way in developing scalable, cost-efficient, clean energy solutions by channelling our deep energy expertise and considerable financial resources into innovative technologies on global basis".

Michael Philipp, CEO of Credit Suisse for Europe, the Middle East and Africa, said: "We are pleased to be partnering with both the Abu Dhabi Future Energy Company and CBG in the growth and development of alternative energy sector technologies. We believe that our extensive transaction experience, industry knowledge, strong relationships and access to top-tier investment capital will be a valuable asset to the Masdar Clean Tech Fund, its investors and portfolio companies".

Vincent Tchenguiz, head of CBG, said: "This is exactly the potent combination needed to address the global energy challenge. It is an exciting example of how government leadership can work with finance and business to bring the best scientific brains and intellectual property together with the necessary funds and institutional capacity to provide scaleable solutions".

The fund's initial seed capital of $100m was provided by the government of Abu Dhabi at the April 2006 inauguration of the wider Masdar Initiative, with additional commitments of $100m and $50m made by Credit Suisse and CBG.

ADFEC on Nov. 8 signed a deal with Shell to develop projects to reduce greenhouse-gas emissions and monetise resulting emission cut credits under the Clean Development Mechanism (CDM) of the Kyoto Protocol. They will target CDM projects focusing on energy and industry in the Middle East, North Africa and Central Asia, drawing on Abu Dhabi's energy legacy and Shell's knowledge and global networks.

The agreement marks an important milestone for ADFEC in advancing the Masdar initiative, launched the government of Abu Dhabi's development programme to promote clean energy and sustainability. It is a fulfillment of the broader strategic alliance created in 2005 between Mubadala and Shell. ADFEC CEO Jaber stressed the need to advance CDM and the leading role which Masdar is to play. Jaber added: "Carbon management is...becoming an established new industry globally, and we believe that the Gulf region can...play a leading role... Shell's proven track record in CDM complements our own capabilities quite well, and our joint efforts should provide a formidable alliance in CDM project development and deployment".

Jaber said: "In just five years, the global CDM market is projected to grow to more than $25 bn and 15% of that can be made in the Middle East. Oil-based economies such as Abu Dhabi are in an advantageous position to "fast-track" CDM projects because of the highly-beneficial integration of CO2 into their oil and gas industries", Jaber said.

Dr Muhammad Defrawi, CEO at Shell Abu Dhabi, said: "We are very happy with the progress of our broad co-operation with Mubadala. This new alliance in CDM...provides yet another opportunity for Shell to partner with Abu Dhabi in an exciting new industry. Promoting green house gas reduction is very much a part of Shell's overall drive to provide for a sustainable environment for the coming generations. We subscribe to Abu Dhabi's vision of promoting responsible growth in the region, and look forward to advancing CDM under a successful partnership with ADFEC".