Partnering with Africa

Matar Al Neyadi (PhD), Undersecretary of the United Arab Emirates Ministry of Energy, holds a doctoral degree in international law from the University of Edinburgh (1997). He has professional experience in leadership, international cooperation, international maritime law, management of international negotiations, climate change, rationalization of energy and water consumption, impact of the prices of unconventional sources on oil and gas prices. He is Chairperson of the Board of Directors of the Gulf Cooperation Council Interconnection Authority (GCCIA), the UAE’s Executive Member in the Gas Exporting Countries Forum (GECF), member of the Executive Office of the Organization of Arab Petroleum Exporting Countries (OAPEC) and member of the National Emergency Crisis and Disaster Management Authority (NCEMA). He has authored a number of legal books which notably include ‘Maritime Zones of the UAE’, the ‘Rules of International Treaties in Public International Law’ and ‘Documents in Public International Law’.

This week, Matar was is Addis Ababa to attend the World Energy Congress which was held from October 25-30 at the UNECA and Sheraton Addis. A huge UAE delegation led by the undersecretary of  the Ministry of Energy and vice chairman of  the UAE National Committee to the World Energy Congress, participated at the conference. Kaleyesus Bekele of The Reporter sat down with Al Neyadi to discuss UAE ‘s energy policy and possible investment ventures in the renewable energy sector in Ethiopia. Excerpts:

The Reporter: What is the government of UAE doing to address energy demand in that country?

Matar Al Neyadi (PhD): First of all I would like to mention that this is my first visit to Addis Ababa and I am really impressed by what I saw here, the hospitality of the people, and the efforts being exerted by the government to develop the energy sector. This is my first visit to Ethiopia but I am sure that it will not be the last.

Ethiopia is a country with historical connections with the Middle East and there is a lot of commonality and trade going on with United Arab Emirates. More importantly, there is an opportunity to strengthen the existing trade and diplomatic relationships through joint collaboration between Ethiopia and the UAE.

Regarding, your question on what the UAE is doing presently in the energy sector and energy policymaking, we believe that demand management is an important pillar in the energy sector. The country is now working on a national energy policy for 2035. A central pillar to this policy is demand management and energy efficiency.

In the electricity sector, we are working now on three different initiatives: first, we are drafting a federal law for electricity and water efficiency. As you know, the UAE a water scarce country; we do not have abundant water resources as Ethiopia. Water is a very important resource for the UAE, therefore, enforcing policies in water efficiency is a priority and we are working on a federal law to encourage efficiency in water and electricity consumption.

We think this law will enable us to encourage water and electricity consumers to make a more efficient use of resources.

Another element we are working on at the moment is electricity utilization in government buildings. The ministry is charged by the cabinet to look into the government buildings and try to retrofit the electricity and make them more efficient in consumption. The ultimate goal is to reduce consumption in government buildings. By taking this steps, the Government is leading by example to encourage private sector and individual consumers to take similar steps.

We also encourage commercial buildings to increase their efficiency and reduce electric and water consumption. We believe that that will reduce the demand for electricity in the country. The other element that we are working on at the moment for the electricity is the introduction of green codes for building. Municipalities across the country are introducing green code building that will be crucial to new construction, ensuring that each new building is energy efficient and more sustainable.

Together, these three elements will help us reduce energy consumption significantly. It will fit in the energy policy that the government is forming. As I said earlier, demand management is a main pillar in the energy policy.

Another priority for the UAE is the transport sector and the introduction of energy policies that encourage efficiency. Last July, the UAE government deregulated the price of gasoline and diesel. This is a significant step for an energy-producing nation and the UAE is leading the region in the elimination of fuel subsidies. Today, in the UAE the price of gasoline and diesel is now linked to the international price. We believe this step will help reduce the demand. It will also introduce a new specification for cars that are imported  to our country to be more efficient. This will help us reduce our fuel consumption significantly.

The second element in the transport sector is that we are working on a project to enhance the public transportation. We have introduced ambitious projects to introduce public railways, trams and marine transportation. We also have a modern and efficient bus transportation linking all the major local and national routes. There are initiatives being taken to encourage the public to use public transportation. For example, we have designated lanes for buses to avoid traffic in the road that will help people to use buses. By doing so, we hope to reduce our gasoline and diesel consumption.

Can you tell us about your electricity demand and generation capacity? And how it is growing?

Our economy is growing year to year. Our GDP is growing at a rate of four percent. This translates to a continued growth of electricity demand. One of the objectives of the UAE is to try to break the linkage between economic growth and electricity demand. As I said, all these measures are taken to break the relation between economic growth and energy demand. We are witnessing some success in this area. We are targeting to at least reduce the demand of electricity not to be in par with the economic growth. in 2014 the UAE electricity generation capacity was 29GW  whereas the demand for electricity was 27GW. In 2021 the country will increase its generation capacity to 40GW .

Is that from thermal energy?

By 2021, seventy percent will be coming from gas. And 30 percent will be coming from sustainable energy in the form of solar energy and nuclear energy. We are building four nuclear reactors under the highest standards of safety and quality. They are under construction at the moment and are evolving safely, with the goal to operate four nuclear energy units by 2020 with a total generation capacity of 5600MW.

This investment in sustainable energy that the UAE is making is part of an ambitious energy policy to increase energy diversification, improve energy security and sustainability. So our portfolio of energy generation for the future will be composed of natural gas, nuclear and solar energy. 

What about wind energy?

We are not lucky like Ethiopia to have much enough wind to run wind farms. We only have suitable conditions in the east coast, in a very small geographic area, so it would not be commercially feasible. Therefore, for us solar is the best solution.

You are currently in Addis Ababa participating in the World Energy Conference. What do you expect to achieve during the conference?

The World Energy Congress is an important platform. We are sharing experience and global best practice across all key areas of the energy sector. We are debating the challenges. We are trying to identify any collaboration between member countries.

Last year, I attended a conference in Johannesburg, South Africa organized by the World Energy Council. This year we are participating in the Executive Assembly that is being held here in Addis Ababa. We believe that Africa is important to us. We are always looking at further enhancing our cooperation.

In 2019, Abu Dhabi will host the World Energy Congress, which is one of the leading international energy conferences in the world. It will be the first time to be held in OPEC member country and we have committed that the UAE will work with our colleagues in Africa in drafting the agendas for the congress, to ensure that the 2019 congress in Abu Dhabi will be an inclusive and be a globally influential congress. Together, we will be identifying the challenges that we will include in the agenda.

Two years ago the World Energy Congress was held in South Korea. Next year it will be held in Istanbul, Turkey. By bringing it to Abu Dhabi we hope to reflect on the challenges we have in the Middle East and Africa and to present it to the world. It will be a golden opportunity to present our challenges and opportunities we have. We will discuss how the world could cooperate with us and benefit by working together.

As you may know many UAE companies are investing in various sectors in Ethiopia. Is there any plan by UAE companies to invest in the energy sector in Ethiopia?

Two years ago during the Abu Dhabi Future Summit, we had the honor to receive His Excellency Prime Minister Hailemariam Dessalegn. He is one of the three heads of state to participate in a panel discussion in the prospect of investment in the energy sector in Africa. From the discussion, we agreed on the existing investment opportunities. I know many UAE companies are working in Ethiopia in different sectors.

Are there companies which have already shown interest to invest in the energy sector in Ethiopia?

At the moment I do not have the information if there is any company which has an investment in the energy sector in Ethiopia. But we are going to inform the UAE companies of the investment opportunity in the renewable energy sector in Ethiopia. I am sure interested companies would contact the Ethiopian authorities. In general, Africa is an important investment destination to the UAE.

Did you meet Ethiopian government officials to discuss the investment opportunity in the energy sector?

There is a plan to meet with the Energy Minister.

Did UAE companies make any investment in other African countries in the energy sector?

Masdar has an investment in cooperation with the Abu Dhabi Fund in Mauritania. They built a solar energy station with the capacity to generate 15WM. The project was inaugurated in 2013 and currently it is operational. Masdar is a UAE company engaged in the development of renewable energy. As I said, Africa is an important partner to our region. There is an immense potential in the continent

If UAE companies show interest to come and invest in the renewable energy sector will your government assist them in providing financing?

I think investment companies usually have their own financing. All the UAE companies operate on a commercial basis. The UAE market is a free market economy. The government does not interfere in that market. We encourage investment. We have legislation to protect UAE investments. We have agreements with other governments to protect UAE investments. We also have agreements to avoid double taxation with many governments. There is a strong trade relation between UAE and Ethiopia. There is an opportunity to strengthen the trade and investment relation not only in the energy but also in other sectors.

Do you have any final statement?

As I said earlier this is my first visit to Ethiopia. I am enjoying my stay in Addis Ababa. I am very impressed by the progress the country is making. I am impressed by the on going construction projects in Addis Ababa. I am also impressed by the hospitality of the people. I understand that Ethiopia is not only an investment destination but it is also a tourist destination. So I am sure that I will come back to Ethiopia not only for business trip but I will also come as a tourist.

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