The recent announcement by the Abu Dhabi Future Energy Company, Masdar, of plans for the building of a walled township in Abu Dhabi that has zero carbon emissions and complete recycling of waste, has received widespread international attention. To be designed by British architects Foster and Partners, this car-free zone will be home to Masdar's headquarters and a new university, while the land around the township will be home to wind and photovoltaic farms as well as research fields and plantations so that it is completely self-sustaining. The development is set to open in late 2009.

Below, Sultan Al Jaber, CEO of the Masdar Initiative, provides an insight into Masdar's plans, intended to reinforce the UAE as a leader in the sustainable energy industry. This article first appeared in the Spring 2007 issue of BP Outlook, and is reproduced, with the permission of BP.

In April last year, the government of Abu Dhabi launched a landmark programme to establish an entirely new economic sector dedicated to alternative and sustainable energy.

Named Masdar - which means 'the source' in Arabic - this initiative offers a proactive response to today's energy and environmental challenges. It is driven by the Abu Dhabi Future Energy Company (ADFEC), which is wholly-owned by the government of Abu Dhabi through the Mubadala Development Company.

This highly strategic initiative has three main goals. The first is to help drive the economic diversification of the Abu Dhabi economy. The second is to maintain - and hopefully expand - Abu Dhabi's position in the evolving global energy markets. The third is to begin positioning Abu Dhabi as a developer of technology, and not simply a pure importer of technology, which is largely the case today.

Now, one may wonder why a Middle Eastern oil-producing country would take the lead in developing alternative and sustainable energy. The answer lies in the fact that the world's energy demand is growing much faster than conventional energy supplies. Most experts also agree that a transition to cleaner, sustainable, and renewable forms of energy will increasingly gather speed. So we don't view these new energy solutions as a threat to our traditional hydrocarbon businesses, but rather as an additional and complementary activity.

As a major energy producer, there is no reason why Abu Dhabi shouldn't leverage its deep energy expertise and substantial financial resources in developing these new clean energy technologies. Indeed, our specific environmental conditions provide us with excellent opportunities to develop and apply advanced technologies in clean and sustainable energy. Abu Dhabi's abundant sunshine, water requirements, and large-scale CO2 sequestration options in the local and regional oil and gas industries, all provide world-scale opportunities in solar, water, carbon management and hydrogen power.

I sincerely believe, however, that the optimal path to success is through open engagement with partners who have the vision, resources and commitment necessary for progress in this new era of cleaner energy and more sustainable use of natural resources.

This is why we are engaging the best international partners in every aspect of the Masdar Initiative. On the academic and research front, we are cooperating with the Massachusetts Institute of Technology (MIT) and six other leading research institutions to create a graduate-level educational and R&D hub unique in this region. We are making significant investments in new technologies, research and specialist education to assist Abu Dhabi's expansion into more knowledge-based industries.

Financially, we're investing globally in promising energy and sustainabletechnology companies through our US $ 250 million Masdar Clean Tech Fund, together with Credit Suisse and CBG of the UK.

We believe that key strategic factors - such as high-energy prices and climate change - are converging with maturing technologies. This situation provides exceptional investment opportunities for the fund, particularly as it can leverage the resources of the institute and research network.

Through a special projects unit, Masdar is actively developing a number of largescale projects to kick-start sizeable new businesses in alternative energy, through a combination of Abu Dhabi-based production ventures and international acquisitions.

By applying scale and leveraging Abu Dhabi's low cost manufacturing base, we believe that these businesses - including polysilicon, photovoltaics, energy storage, and hydrogen - will enjoy competitive advantages, allowing them to compete globally and to provide a significant diversification of the Abu Dhabi economy.

Our carbon management unit is a regional pioneer in developing carbonrelated projects under the Kyoto Protocol's Clean Development Mechanism. We are building a broad portfolio of assets involved in carbon capture, sequestration and carbon credit trading. By doing so, we are establishing a leadership position in this exciting and new high-growth area, in addition to further enhancing Abu Dhabi's record of environmental stewardship. The tie-in to our oil and gas assets provides uniquely economical applications that should allow Abu Dhabi to become a world leader in carbon capture and sequestration.

The last component of Masdar is a special economic zone, which provides an integrated, synergistic community housing the Institute campus, research labs, commercial offices and support facilities in an iconic 'green' science park. We are providing a package to attract up to 1,500 clean-tech companies, including commercial incentives, tax-free status, high-tech infrastructure, modern lifestyle, and direct access to local financing. Combined with an associated manufacturing area, the zone provides a clear value proposition: access to talent, technology, financing and markets.

We believe a historic and global technological shift to additional energy sources and sustainable resource utilisation is now under way. Through the Masdar Initiative, Abu Dhabi intends to be a significant participant - and, wherever possible, a leader - in this exciting process shaping our future.