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A Silicon Valley for Climate Tech? It Could Well Be the UAE As the UAE transitions to a more diversified economy, it is starting to build financial and other infrastructure for startups and innovators.

By Danny Kennedy

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If one were to look at the track record of the annually staged Conference of the Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCC), one could -arguably- say that COPs are not known for their technology showcases nor startup support efforts, so much as their policy brawls and political commitmentsor lack therein. Anyone who is surprised by side deals and compromises in the UNFCCC process hasn't been paying attention since 1992.

But looking at the most recent edition of COP staged in the UAE in 2023, this COP may be a little different in that there's an emphasis on entrepreneurs and how innovation is a lever we need to use in our quest for climate solutions. Exponential energy tech growth has in sight the 2°C target for limiting global warming, if not 1.5°C, all the while; however, we have to be wary of the authenticity of these solutions.

Driving entrepreneurial solutions may seem contrary to some peoples' preconception of the host nation of COP28, the United Arab Emirates (UAE), as an oil-rich and relatively small economy. While it is still not doing enough per London-based think tank Carbon Tracker, it is punching above its weight in the energy transition in the region. For example, earlier this year, the UAE updated its energy strategy to triple the share of renewables by 2030, a position it had taken into the COP, which many others are now endorsing. In fact, the UAE expects that 55% of Abu Dhabi's electricity will come from clean sources in 2025.

The UAE is changing. At the crossroads of Africa, Asia, and Europe, it is also a global investment hub, home to lots of big and small companies across a range of industries - and it also has a lot of money. That's how the UAE was able to go to Africa Climate Week in September last year, and commit over US$4 billion of finance on the continent for clean energy. Western countries didn't do that. As someone who had never worked in the Gulf states before, I'm finding similarities to the can-do culture of Silicon Valley, where I have run the California Clean Energy Fund for nearly a decade.

Related: Sustainable Finance: Here's How Startups Can Excel In The Emerging Green Economy Of The UAE And The GCC Region

A shot of the Mohammed Bin Rashid Al Maktoum Solar Park, the largest single-site solar plant in the world.

It is interesting to think of California at the turn of the last century: like the UAE, it was a giant of oil production in the world. If I'd asked someone there in 1923 whether they thought it would be a champion of a 100% renewable future, including an electrification disruption in internal combustion engine-run cars, I doubt they would. But by fostering a culture of innovation and collaboration, California has led the world in multiple new industries over the decades. The UAE seems to understand this playbook, with the current leaders acknowledging that one day soon –how soon is the big question we're all fighting over- the last barrel of oil will be shipped.

Given the US' recent investment surge in oil and gas production and export, it is in American multinationals' interest to delay renewables more than Middle East national oil companies. International Energy Agency scenarios suggest that if the world moves beyond "announced policy scenarios" to "net zero emissions" by 2050, North America's share of export sales goes from 20% of a big number, to 20% of a much smaller one. Whereas the national oil companies of the Middle East gain market share from around 40% to 60%, but from a much smaller base. So, in the future, it is unclear who the real champions of quitting oil will be. The fact is, no one is doing enough yet.

The proof will be in the pudding of course, but there is lots going on now even amongst some of the UAE's big businesses. Earlier this year, Emirates Global Aluminium (EGA) launched a green supply chain program, and also purchased clean energy certificates for 1.1 million megawatt hours of electricity- to produce 80,000 tons of solar aluminum. It's not reducing the greenhouse emitted from aluminum production enough, but this is one of those "hard to abate" sectors we have to iterate. Innovation along complex supply chains like this –EGA has 3,000 vendors– is a lot of the work of the energy transition that we still need to do.

Related: What Are The Climate Solutions That We're Leaving On The Table? Ask Women Entrepreneurs.

Danny Kennedy is the CEO of New Energy Nexus (NEX), the world's leading ecosystem of funds and accelerators supporting clean energy entrepreneurs

What is clear is that as the UAE transitions to a more diversified economy, it has built financial and other infrastructure for startups and innovators. I spent some time prior to COP at the Abu Dhabi Finance Week, an annual gathering of investors, family offices, and trustees from across the Gulf that seemed to be high on environmental, social, and governance (ESG) principles, for what it is worth. It convinced me this country has fertile ground for new technologies and businesses to grow. That is why at New Energy Nexus, we brought 50 climate tech founders to the UAE during COP28 as part of the program we have been running this year with the COP28 Secretariat and the Abu Dhabi Investment Office (ADIO).

We have known some of these climate tech startups for years, like AltoTech, which is bringing smart controls to aircon loads in Thailand. Others are part of a new wave of two-wheeled e-mobility sweeping Africa, such as ZED Motors and Mobility for Africa. With our COP28 partners, we were able to showcase these startups to all kinds of regulators, decision-makers, and investors, connecting them to more resources, partners, and potential customers. There will be plenty of other connections to opportunity, starting with close to a thousand university-aged engineers and others in Abu Dhabi at the Student Energy Summit, who represent key talent for innovative companies.

Out of this one-off program we aim to build an ongoing engine of support for climate startups in the UAE with Hub71, which is the nation's leading tech startup support organization. We are unapologetically leveraging the fact that the UAE is a good place for startups to land, and to find capital, as well as mentors, partners, and customers, which they need to succeed. If half of the companies we bring here can tap into the regional market and open channels for distribution to countries in the region, the world will be better for it.

ADIO has also been playing an active role in supporting the UAE's sustainability commitments where it has also signed a trilateral agreement with the Abu Dhabi Department of Energy (DoE) and Abu Dhabi Future Energy Company PJSC – Masdar, to accelerate the hydrogen economy in Abu Dhabi, and position the UAE as a global leader for the production and export of low-carbon hydrogen. This follows Abu Dhabi's recently launched Low-Carbon Hydrogen Policy, which creates a framework to accelerate production on a much larger scale.

One thing we've learnt from building entrepreneur support ecosystems in 12 countries for 20 years is that good ideas and talk are not enough. We need capital, talent, and demand to combine in a virtuous spiral around the ideas. The UAE has all these– and it has put them out there through last year's COP. Let's see what happens. No doubt it will never be enough in the face of the climate crises, but we are seeding the field to see a small crop of the solutions we will need to harvest in years to come.

Related: Transformative Action: The Crucial Role Creative Industries Can Play In Realizing The GCC's Climate Agenda

Danny Kennedy

CEO, New Energy Nexus

Danny Kennedy is the CEO of New Energy Nexus (NEX), the world’s leading ecosystem of funds and accelerators supporting clean energy entrepreneurs. NEX started in Silicon Valley, and it now runs programs in Australia, China, India, Indonesia, Nigeria, the Philippines, Singapore, Thailand, Vietnam, Uganda, and the USA. Since 2004, it has accelerated over 900 clean energy startups, supported over 5000 entrepreneurs, and mobilized over US$1.5 billion in investment. Danny is also an advisor to clean energy companies in Australia, China, Kenya, the Philippines, the USA, and elsewhere. Besides co-founding Sungevity, a solar pioneer in 2007, he was the first backer of a now $6 billion-worth solar
loan provider Mosaic in 2011, and he was also the author of a book on rooftop solar. He speaks regularly to media and at major conferences and is co-host of the Audible podcast, Climate of Change, with Cate Blanchett.
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