Abu Dhabi’s Masdar is one of the biggest and most ambitious clean energy investors in the world. Established by sovereign wealth fund Mubadala in 2006, it has injected more than $30bn into projects across 44 countries. It wants to grow its current 20 gigawatt (GW) power portfolio five-fold by 2030, and produce one million tonnes of green hydrogen per year.

Its chief operating officer, Abdulaziz Alobaidli, speaks with fDi about choosing where to invest, the UK’s appeal and why partnerships are in its DNA.

Q: Masdar invests in countries as diverse as Mauritania and the US. What do you look for in an investment destination?

A: We evaluate each opportunity on a case-by-case basis. Do the economics meet our threshold in the form of cost of debt and equity? Does the country have a policy and regulatory ecosystem that allows for a safe and profitable investment? How mature is the supply chain — subcontractors, material and equipment — and port infrastructure? With wind investments, you need to make sure the roads are capable of transporting those very long blades to the site, or if you need to ask the host country to invest in the infrastructure. Sometimes we just develop a project, build it, flip it and leave. So, it is different from country to country. 

Q: Why did Masdar recently acquire a 49% stake in the world’s biggest offshore wind project, the UK’s £11bn Dogger Bank South?

A: Masdar has always prioritised offshore wind and the UK is one of the prime markets. The UK has, on several occasions, boosted the offshore wind contract-for-difference [the guaranteed price at which it buys electricity]. Moves like this will incentivise investors like us to expand their capacity. It’s a market every serious developer wanting to grow its offshore business will think about.  

Q: Masdar is developing Dogger Bank in partnership with RWE and often invests alongside other firms. Is this preferred to developing projects alone?

A: To the question: ‘Are we capable of investing on a standalone basis?’ The answer is yes; we’ve done it before.

However, like any investor, we would like to de-risk our investment by sharing it with partners. Masdar started on the basis of partnerships from day one, and regardless of our size and capabilities today, partnerships should continue to be core to our operating model. Partners add value, sometimes by allowing us to deal with local rules, sometimes by complementing our capabilities in a specific technology, and sometimes just for pure financial merits.

Q: Masdar is bullish on green hydrogen, but with no commercial operations and costs still high, the technology has many sceptics. What’s your reply to them? 

A: There will always be questions around green hydrogen and that’s the nature of new technology. It’s not related to green hydrogen.

Masdar has not just started speaking about green hydrogen — starting in 2008, we did studies and analysis on green hydrogen production, but the market wasn’t ready for it or for paying a premium.

However since then, and especially now with us creating a new business line dedicated to green hydrogen in 2022, we’re working to accelerate investment right across the value chain.

Q: What are three of Masdar’s recent groundbreaking projects?

A: Last year we inaugurated the UAE’s first wind farm, and in a country where people thought it wasn’t feasible due to low wind speeds.

Abu Dhabi’s 2GW Al Dhafra Solar project, which we co-developed, also started operating last year. It is the world’s largest single-site solar project and averaged 10 megawatts (MW) of panels installed every day. In 2009 it took us one year to build the UAE’s first 10MW solar project, which shows how construction capabilities and technology have developed.

Also last year, the Cirata floating solar project in Indonesia commenced operations, which is the biggest floating PV project in south-east Asia — a region where land is very scarce.

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This article first appeared in the April/May 2024 print edition of fDi Intelligence.