Dubai: If you have Dh500 or Dh1,000 lying around or saved in the bank, why not grow it two-fold by getting higher returns for the next 20 years while investing in the preservation of the environment for generations to come?
This is the newest way for UAE residents to pool their resources together as in crowdfunding in order to accelerate the adoption of solar energy in Dubai and the rest of the country, officials announced on the sidelines of the second Dubai Solar Show on Monday, which is part of the Water, Energy, Technology and Environment Exhibition (WETEX).
Dubai Carbon Centre of Excellence (DCCE) and global trade enabler DP World on Monday signed an agreement to use crowdfunding to power the retrofitting of warehouses in Mina Rashid.
Through crowdfunding, UAE residents will be able to fund a total of 3,000 kilowatts of solar energy where they can get a return through the kilowatt hours generated from the project, at an estimated return rate of 40 per cent across a ten-year period.
Dubai Carbon is currently working with Innogy International Middle East on developing a blockchain technology for this application that is based on smart contracts that are completely automated and where returns are automatically drawn up when the project goes live.
“What we’re creating is essentially a platform where everybody can participate in the solar revolution,” Ivano Ianelli, Dubai Carbon CEO, told Gulf News.
“So say if we have a larger commercial project where we’re retrofitting warehouses as an example, rather than me going to banks as institutional investors, I can share the benefits of the project with the entire community. And given how lucrative solar power plants are at the moment using Shams Dubai and the very positive environment, it will be an opportunity for everyone to keep some profit currently at 7 to 8 per cent a year out of their investments,” he added.
Nabil Battal, global HSE director of DP World, said the project is part of DP World’s next evolution in their progression in adopting solar.
“Some of the projects that we have now selected are going to be used and developed under this type of model to allow the local population or anyone else to have an opportunity to invest in solar (energy) and, hopefully, raise awareness on what’s available and that should help try to accelerate the adoption of that market,” Battal told Gulf News.
This model essentially democratises investments and energy, Pierre Samaties, managing partner and CEO of Innogy, said. Other projects in the future will include solar leasing and many more not only in the UAE but in other parts of the world.
Also, beating returns banks offer for savings accounts, this programme gives not only monetary benefits but also meaningful contributions to society, to the environment and the world as a whole in the long run.
“In a practical example, instead of setting up a little savings account for my children, I would probably look at some form of investment like this to get the next generation involved in it. We’re planting the seeds, we’re preparing the next generation for these sort of projects and the more we can get people engaged, the faster the acceleration of these projects will become,” Battal said.
How the programme works
Crowdfunding is the practice of funding a project or venture by pooling money from a large number of people who each can contribute any amount, even small figures.
So imagine the rooftop of a warehouse. It will be divided into small squares, each equivalent to 1 kilowatt. With this programme, everyone can buy a kilowatt of that power. One person can buy as much as he can and the pooled funds will be used to fund the project. So if you invest Dh1,000, you will get revenue from that Dh1,000 for the next 20 years based on a contract that is automated and managed transparently.
