Sunday, August 31, 2008

Alf Yad Taking Majority Stake in EmBio

Original Article

DUBAI - Venture capital management firm Alf Yad Limited LLC is taking a majority stake in a company that assures a steady supply of commercial-grade biodiesel in the UAE to help reduce greenhouse gas emissions without compromising food security.

Shehab Gargash, the chief executive of Daman Investments PSC that channels the investment through its venture capital fund Alf Yad and acts as the fund manager, said the fund is expected to generate an annual growth of 30 per cent. He added that his company is looking for other venture opportunities as well. “We support young companies to be on their own,” he said following Sunday’s launch of a partnership between Alf Yad and Emirates Biodiesel LLC (EmBio), a firm created this year and is poised to supply the Gulf region its first commercial high-grade biodiesel.

Gargash said Alf Yad was launched last year to invest in 10 different funds, each totalling Dh100 million. The investment in EmBio is part of the investment in one of these funds. Another investment fund will be announced by the end of the year, he added. Karim Aly, the managing partner at Ecobility Energy Solutions LLC, whose founders created EmBio, said a new plant would be built in the UAE’s fourth-largest city of Al Ain to produce biodiesel from inedible oils starting the first-half of 2009.

He said this move is in line with the UAE policy on sustainable development, or promoting progress without hurting the environment. He added that “The company does not believe in compromising food security by diverting edible crops towards industrial use,” EmBio said in a fact sheet released to the media. “The company will therefore highlight the true environmental and economic benefits of biodiesel.” Biodiesel, which can also be produced from vegetable oils and other biomass, has the same properties as that of petroleum diesel but is cleaner and renewable. It has various applications but is mainly used as an additive to petroleum diesel fuel in order to improve lubricity and reduce carbon monoxide emissions by up to 75 per cent in a full lifecycle assessment.

Aly and Wadah Abusin, also a managing partner at Ecobility, described EmBio’s launch as a “significant step” in the UAE’s quest for a cleaner environment amid its rapid economic growth and infrastructure development. “For the first time in the UAE, a renewable fuel additive will be within the reach of the private sector allowing companies to operate in a more eco-friendly and sustainable fashion,” EmBio said. The country’s construction, transportation and logistics sectors are at the centre of this growth, thus requiring tremendous amounts of diesel fuel to power their operations.

The UAE is also leading the way in reducing carbon emissions putting in place various initiatives such as green-building codes in Dubai and Abu Dhabi. Contracting companies, for instance, may reduce their ecological footprint by using biodiesel blends to power their diesel-fuelled equipment while logistics firms may use it to fuel their fleets. Biodiesel blends of up to 20 per cent can be used in any diesel engine without modifications. Gulf Arab countries are investing heavily in renewable energy sources despite holding over 50 per cent of the world’s proven oil reserves in preparation for their perceived depletion. The Abu Dhabi Future Energy Company (Masdar) broke ground early this year on its Dh80.81-billion ($22 billion) Masdar City project, zero-carbon and -waste, car-free city in the capital.

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