How to make the UAE a hub for green technology pioneers

by MMC
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Yassin Nasri, is the founder and CEO of ImpactGulf

With a focus on renewable energy, encouraging startups and fostering a culture of social innovation, the UAE is undoubtedly a regional leader in the transition to a low-carbon economy. While this momentum is undeniable, there are missing some elements necessary to build a comprehensive and powerful sustainability ecosystem.

The crux of this transformation begins at the crucial intersection of startups and venture capital. It is at this stage that pioneering green technology solutions are designed and implemented, and the foundations are laid to drive impactful investments that advance sustainable development.

Potential of green technologies to promote prosperity

The importance of green technology goes far beyond our collective mission to combat climate change and conserve our planet’s resources. Sustainability has significant economic weight, because it represents an engine of growth and prosperity for society as a whole. According to Statista, the global green technology and sustainability market is expected to reach $62 billion by 2030. The strong growth of this market reflects the growing momentum for environmentally friendly solutions.

Adopt green technologies

The UAE’s fervent embrace of green technologies has propelled it to the forefront of global sustainable development efforts. Examples include the Green Hydrogen project at the Mohammed bin Rashid Al Maktoum Solar Park, which is the first of its kind in the Middle East and North Africa (Mena) region to use solar energy to produce electricity. hydrogen; as well as ADNOC’s Habshan Carbon Capture, Utilization and Storage (CCUS) project, one of the largest integrated carbon capture projects in the Mena region. With ambitious targets to produce 75% of its energy from clean sources by 2050, the UAE continues to prioritize the development and implementation of sustainable technologies, ensuring a greener and more respectful of the environment.

Nourishing the startup ecosystem

Recognizing the potential of startups to shape a sustainable economy, the UAE has fostered a favorable environment for social entrepreneurs. Initiatives such as Hub71 and the Dubai Future Accelerators program have provided invaluable mentorship and financial support to startups, propelling innovative ideas towards successful implementation. The creation of specialized free zones, such as Masdar City, Dubai Silicon Oasis and Abu Dhabi Global Market, has also facilitated the creation of an ecosystem in which startups can thrive, providing them with the infrastructure and resources needed to grow and prosper.

Impact management and investment

The UAE offers inventors and investors an exceptional business environment with remarkable infrastructure, low taxes, a safe environment and a mentoring ecosystem. However, startups with advanced technology need an environment for project testing and venture capital. In this context, it is essential to understand the crucial link between financing and the emergence of unicorns in the startup landscape. According to Statista, the value of venture capital deals in 2020 presents a stark contrast: the United States obtained a significant amount of $133 billion, the EU obtained $33 billion, and the Mena region obtained a significant amount relatively modest $0.66 billion. As a result, the unicorn landscape in the startup ecosystem is indicative of this trend: the US has a staggering 697 unicorns in 2023, while the EU has only recorded 65 and the Mena region only has a handful of unicorns.

The pilot involves the creation of a realistic testing ground in the UAE to evaluate real-world green technology solutions (Technology Readiness Level 5+), with support mechanisms that facilitate collaboration with leaders industry and academic institutions.

The impact investing field, while gaining ground, requires a more concerted effort to develop a robust financial ecosystem that encourages and incentivizes sustainable investment practices.

Creating an enabling environment for impact investors to channel their resources into sustainable businesses is essential to foster a vibrant and self-sustaining green economy. Some of the concrete measures that can be suggested include facilitating impact investment events, providing seed funding, and assuming partial risk of loss for bank loans and venture capital.

Lessons from Germany

As a German national with strong ties to the startup and green tech ecosystem in Germany, I have witnessed the rise of bodies such as the German Federal Agency for Disruptive Innovation (SPRIND ). SPRIND bridges the gap between research and entrepreneurship, organizes Founder Challenges on different innovation topics, invests in selected companies and is involved in management and commercial development. A more conservative example is Mittelständische Beteiligungsgesellschaften (MBG), private equity firms that support SMEs with equity or by assuming part of the risk of loss on bank loans.

Towards a more comprehensive sustainability framework

To consolidate its pioneering position in sustainability, key stakeholders in the UAE should join forces and proactively address gaps in its sustainability ecosystem. This requires the formulation of concepts and strategies to involve universities and industry leaders in the process of testing and implementing innovative solutions, as well as incentives encouraging responsible investments. Fostering stronger collaborations between public and private entities, as well as investment in research and development, will be key to strengthening the country’s efforts to achieve a fully self-sufficient and thriving green economy.

Green consumers

By implementing the above measures, we are laying the foundation for the emergence of cutting-edge green technologies, made in the UAE. However, we still need to work to create a regulatory framework, develop incentives and invest in education and awareness programs to raise public awareness of climate and sustainability issues and, therefore, create a strong local customer base for green products and services. Ultimately, green businesses will not succeed globally without first succeeding in their local market.

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