Green finance a key component of sustainable growth strategy

AGreen Economy for Sustainable Development initiative launched in 2012 and the Green Agenda 2015-2030 set the course for Dubai’s economic growth ambitions, social development priorities and environmental sustainability goals.

To meet the environmental challenges facing most countries in the world and to spread a culture of sustainability, Dubai must have a global movement towards a green economy. These principles are firmly embedded within the Dubai Clean Energy Strategy 2050 for clean energy to provide 7 per cent of Dubai’s total power output by 2020, rising to 25 per cent by 2030, and 75 per cent by 2050. The strategy consists of five main pillars: infrastructure, legislation, funding, building capacities and skills, and an environmentally friendly energy mix.

The strategy is underpinned by an investment of Dh14.2 billion in the Mohammad Bin Rashid Al Maktoum Solar Park, which is the largest single-site concentrated solar power park in the world, with a planned capacity of 5,000 megawatts by 2030. The World Green Economy Summit 2016 held in Dubai under the patronage of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, concluded with the announcement of the 3rd Dubai Declaration, which emphasised Dubai’s commitment to “create a smarter, greener, happier Dubai” — a global hub for the green economy.

In implementation of a decision issued by Shaikh Mohammad, and as part of the Dubai Strategic Plan 2015 for applying the specifications of green buildings to all buildings and premises in Dubai with the aim of keeping Dubai a healthy city with a clean and pollution free environment, the Dubai Electricity and Water Authority (Dewa), in cooperation with Dubai Municipality, has launched the Green Building Regulations & Specifications, a set of specifications and guidelines for regulating the criteria of the structure that allows adequacy in the consumption of electricity, water and renewed energy as part of the green buildings project in Dubai, which will make savings of around Dh10 billion until 2030.

The impact of these new regulations is likely to be significant; estimates suggest their application will result in 30 per cent energy savings for cooling and air-conditioning, 9 per cent for lighting and 6 per cent for heating water. At the same time, they will reduce water consumption in buildings by up to 30 per cent.

Since 2010, 1,433 green building projects have been completed across Dubai while the municipality has registered over 120 million square feet of real estate since the application of the green building code became compulsory for all new buildings in March 2014. The Building Department of Dubai Municipality licensed 17,438 buildings with a total area of 187,723,308 million square feet between March 1, 2014, and June 30, 2016.

Green Finance in UAE:

Green finance continues to grow in the UAE. According to the UAE’s State of Green Economy Report, of the country’s 79 financial institutions, 48 per cent already provide a green finance product or service, and at least 0.27 per cent of GDP has been invested in domestic green investment. Dubai has established a Dubai Green Fund worth Dh100 billion ($27.2 billion) to provide easy loans for investors in the clean energy sector at low interest rates, and plans a tax-free business zone to attract clean energy companies from around the world.

Environmental Tourism:

The Department of Tourism and Commerce Marketing last year launched the Dubai Green Tourism Awards to encourage and reward the most environmentally friendly hotels, with the aim of reducing their total carbon emissions by 20 per cent.

Dubai plans to build the largest waste-to-energy plant in the Middle East by the second quarter 2020 at a cost of Dh2 billion. This will help achieve a national target of reducing the number of landfills by 75 per cent by 2021, in turn freeing up land currently used to store waste and cutting harmful methane emissions.

Sustainable Energy:

In 2009, Dubai Chamber achieved the coveted LEED certification for Existing Buildings, while the Drainage and Irrigation Department of Dubai Municipality has a grey water treatment plant for use in irrigating local parks and trees.

In December 2011, the Dubai Supreme Council of Energy allocated Dh12 billion for producing electricity from solar energy. Abu Dhabi also aims to produce 7 per cent of its energy by 2020 through the project of Masdar City, which will be the first emission-free city in the world. Masdar began to annually host the World Future Energy Summit in Abu Dhabi in 2008 and was selected to host the headquarters of the International Renewable Energy Agency (Irena).

Mohammad Salama is the Country Head of Global Banking, Standard Chartered UAE.