YELLOW DOOR AIMS TO RAISE $100m FOR RENEWABLES
▶ The Dubai company will have projects worth $110m by end of 2020
Dubai-based Yellow Door Energy, which is backed by multilateral lenders including the International Finance Corporation, is looking to raise $100 million (Dh367m) in debt to finance renewable projects as it remains bullish on the sector’s prospects.
The company, which already has a presence in Jordan, Bahrain, Saudi Arabia and Egypt, is likely to take a hit to its revenues for 2020 as a result of the Covid-19 pandemic, chief executive Jeremy Crane told The
National. However, it expects demand for renewables to remain resilient.
“We expect an 18 per cent decline in revenues for this year. I think we’re past the worst,” Mr Crane said.
“Our 2020 targets haven’t changed,” he added. “We’re going to have about $110m of projects operating by the end of this year. There are some slight delays there but on an annual basis, it remains the same,” he added.
The firm plans to reach 100MW of capacity by year end and is looking to raise “approximately $100m in debt” for various projects from different banks, Mr Crane said.
Yellow Door Energy, which was spun-off from Middle East-focused solar energy investor Adenium Energy Capital in 2015, counts the International Finance Corporation, Mitsui & Co, Norway’s Equinor Energy Ventures and Arab Petroleum Investments Corporation (Apicorp), based in Dammam, among its investors.
The company, which has 55 megawatts of projects under construction, faced some delays owing to supply chain disruptions as most of its materials are sourced from China. Projects in Jordan, one of its key markets, were also affected by the country’s strict lockdown measures, which prevented staff from accessing sites.
However, most projects are now back on track, and although timelines have been pushed back, none are facing completion risks, Mr Crane said.
Decarbonisation of the global energy system away from fossil fuels to renewables could generate $98 trillion in cumulative growth between now and 2050, adding an extra 2.4 per cent to gross domestic product, according to the International Renewable Energy Agency.
The agency, based in Abu Dhabi, last month called for stimulus and recovery packages to be made available to the clean energy sector to prepare for a more sustainable, post-pandemic future.
Mr Crane agrees that while short-term subsidies may favour other sectors through a “shock transition period”, governments are likely to shift to renewables both for economic and environmental reasons.
“Renewables are cheaper, less expensive than oil or any other form of generation,” he said. “If people are motivated to save money, they’re motivated more than ever to make the change to renewables. In many ways this shift, the desire to reduce their cost of energy, is going to mean an increased demand for renewables.”.
Organisations such as the World Economic Forum, meanwhile, have issued cautionary reports, suggesting that the pandemic could derail progress in clean energy growth as countries pause economic expansion to focus on immediate health risks to populations.
However, Mr Crane says renewable companies such as his continue to focus on existing markets, even if new business development has become more difficult with the grounding of airlines.
“Our growth is now more focused in the countries where we have already set up operations,” he said.
As far as acquisitions are concerned, the company is “actively looking for new investments”.