Abu Dhabi's "Masdar Clean Tech Fund" Closes First Fund At $265 Million

A new fund based in Abu Dhabi to accelerate clean tech has just closed its first round of financing. Masdar City is expected to get a big boost.

Abu Dhabi’s “Masdar Clean Tech Fund” just completed its first closure, and was successful in raising an impressive $265 million. The fund is co-managed by Masdar Venture Capital and DB Climate Change Advisors, and is looking to build a diversified venture capital and private equity portfolio that will include some of the world’s most promising and pioneering clean tech and renewable energy companies. The Fund is made up of commitments from the Abu Dhabi Future Energy Company, the Consensus Business Group, Credit Suisse and Siemens AG.

Beyond investing in technology, the fund will support projects in environmental resource management, such as water and waste management, both important issues in a part of the world where water resources are becoming scarcer and inadequate waste management programs are resulting in increasing problems for people living on the Arabian Peninsula.

The importance of reaching this financial milestone was heralded by Dr. Sultan Ahmed Al Jaber, Masdar’s CE0, who said:

Completing first close on the DB Masdar Clean Tech Fund is a clear statement of intent. We understand both the financial and social value of companies that are tackling global environmental challenges; we are committed to supporting them by providing capital investment and management expertise.

Masdar’s successful fund will undoubtedly be very helpful in financing what may be one of Masdar’s largest projects (if not the largest), Masdar City, which will depend on renewable energy sources to provide needed electricity for air conditioning systems, as well as providing fresh water for personal use and irrigation.

The German banking giant, Deutsch Bank is one of the main banking vehicles in this project, and the German industrial firm Siemens is the lead investor.  As noted by Joachim Kundt, CEO of Siemens in the Lower Gulf region:

Siemens is very happy to be the lead investor in the DB Masdar Clean Tech Fund. Our active involvement for the second time in a fund associated with Masdar demonstrates our ongoing commitment to clean technology, and we look forward to continuing our work with the Masdar Initiative and building on our already strong relationship with Deutsche Bank.

Among the portfolio companies already in the fund are the “clean” oil processing company DuraTherm, sewage sludge energy company enertech, waste treatment company EUROPLASMA from France, and thin-film PV company HelioVolt. Looking at the list, it appears that none of the fund’s portfolio companies are actually based in the Middle East, or started by Middle East nationals; but we would like to see that change.

With the fund’s emphasis being on clean tech and environmental issues like water conservation, a number of clean technology and other green projects in the region should benefit from this fund as well as the Masdar City project. If we could make a wish list, some of these may include desalination plants powered by solar and wind energy As well as financing new “green belts” in countries like Saudi Arabia.

“In these challenging economic times, the size of this first close and quality of participants demonstrates a profound confidence in climate change investing and in the joint DBCCA and Masdar investment team,” said Kevin Parker, Global Head of Deutsche Asset Management (DeAM) and member of Deutsche Bank’s Group Executive Committee.

::Masdar City website
::Links to press release

More on clean tech investing:
Saudi Arabia to Replace Oil With Sun Power for Desalination Plants
Private Equity Firm Buys Up Waste Management Firms in Egypt
Cukierman & Co. Investment House Talks Green Investment Shop for Middle East