Business

Dubai plans to go greener with 20% reduction in energy consumption

The efficiency programme, called the green building project, was started as an initiative in 2008 by the Supreme Council of Energy in collaboration with the Dubai Municipality and Dubai Electricity and Water Authority.

Shereen El Gazzar

February 11, 2014

Dubai aims to cut energy consumption by 20 per cent by 2020, as it enforces an energy-efficient building project, a government executive said yesterday.

“Buildings use 70 per cent of the energy that we produce,” said Abdulla Mohammed Rafia, the assistant director general for engineering and planning at Dubai Municipality.

“To get the city green, you might as well go to the biggest consumer – the buildings, whether residential or commercial.”

The efficiency programme, called the green building project, was started as an initiative in 2008 by the Supreme Council of Energy in collaboration with the Dubai Municipality and Dubai Electricity and Water Authority. In 2011, it became mandatory for all government buildings to adhere to the programme. However, this year it was extended, requiring all new buildings to be energy-efficient.

“On cost increase it’s only 5 per cent [to have a green building],” said Mr Rafia, adding that in addition to energy savings, 15 per cent could be cut from water consumption and 20 per cent from carbon dioxide output.

To get a green building certified in Dubai, it has to meet 79 energy-saving standards. The criteria include measures such as using thermal insulation, using energy-efficient equipment for air conditioning for instance, and using solar water heaters.

Separately, Mr Rafia said the numbers of green buildings accredited annually in Dubai during the past five years had fluctuated as the volatile international economic situation affected the emirate’s property sector.

However, Dubai Municipality forecasts the volume and number of green projects will increase in the future.

“Our forecast shows that in 2016 the permitted area [for green buildings] could reach to 90 million square feet,” he said.

Last year, about 54 million sq ft was earmarked for green buildings.

selgazzar@thenational.ae

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While you're here

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”