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Abu Dhabi Sovereign Wealth Fund Strikes Balance

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Abu Dhabi's sovereign wealth fund is changing its investment plans to advance low-carbon technologies, including hydrogen and innovative uses of solar. Mubadala Investment Co. is eyeing the twin goals of "responsible energy production and energy diversification," explains Bakheet al-Khateeri, head of UAE industries at Mubadala, in an interview with Energy Intelligence. Mubadala also sees itself as aligned with the UAE's energy transition plans. The country's National Energy Strategy 2050 aims to increase the contribution of clean energy in the total energy mix to 50% by 2050 and reduce the carbon footprint of power generation by 70%. As the owner of local renewables firm Masdar, established in 2006, Mubadala has naturally been ahead of most regional peers that started transitioning their business strategies later. “At the time, there were doubts about renewable energy," al-Khateeri says. He feels that Mubadala's "forward-looking investment philosophy" has resulted in "one of the world’s fastest-growing renewable energy companies in the world" with 11 gigawatts of clean energy projects worth $19.9 billion. Hydrogen and More Regional players in the past year have taken a number of steps to become producers and sellers of green and blue hydrogen -- and Mubadala is no exception. “For now, our pipeline of initiatives is focused on green hydrogen,” al-Khateeri says. Earlier this year, Abu Dhabi National Oil Co. (Adnoc) partnered with Mubadala and local group ADQ to establish the Abu Dhabi Hydrogen Alliance, which aims to develop the emirate’s role in the hydrogen economy (NE Jan.21'21). Through Masdar, Mubadala is already involved in several hydrogen projects. “Masdar is developing a hydrogen demonstrator in partnership with Siemens Energy and other important local and international players. The demonstrator will explore the development of green hydrogen, sustainable fuels and e-kerosene production for transport, shipping and aviation," al-Khateeri explains. The project is the first concrete step under the Abu Dhabi Hydrogen Alliance, he emphasizes. Adnoc is also set to play a central role in Abu Dhabi’s commitment to developing and selling hydrogen. “Adnoc is already a major producer of blue hydrogen and ammonia, with more than 300,000 tons per year of hydrogen produced at the Ruwais Industrial Complex," al-Khateeri says. “Abu Dhabi has therefore established a strong foundation for the production and sale of hydrogen, which proves a strong business case and can help attract further investments for the development of new facilities." Mubadala is involved in other pioneering renewable projects. These include a solar-produced aluminum plant -- the first of its kind in the world. It is a partnership with Emirates Global Aluminium (EGA), which it co-owns with state Dubai Holding and state utility Dubai Electricity and Water Authority (Dewa). Going forward, the venture plans to supply global partners with the aluminum. Cleaning Up Hydrocarbons With energy demand set to rise through 2050, players in the region are aware of the need to decarbonize hydrocarbon. Low-cost fossil fuel producers such as the UAE and Saudi Arabia aim to maintain volumes and even expand production capacity. Mubadala believes that “all forms of energy will be required to meet future challenges and all sectors have a role in tackling these challenges," al-Khateeri says. Through its Mubadala Petroleum unit, the company is committed to decarbonize energy production and prioritize lower-carbon natural gas while continuing to invest in fossil fuels. The unit has identified gas and LNG as bridge fuels to the energy transition, and is eyeing a 70% gas weightage in its portfolio while "cutting emissions through operational efficiencies," al-Khateeri explains. “Globally, our strategy is to unlock material investments in gas production with a secondary focus on low-cost, opportunistic oil plays." Mubadala has its eyes on high-growth sectors for its current and future investments. “Looking to the future, what is clear is that we have a strong business and a clear strategy ahead -- we are focused on doubling the portfolio size by 2030.” Yousra Samaha, Dubai

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