Irena recognises UAE's advancement

It's now official: the United Arab Emirates (UAE) will host the headquarters of the International Renewable Energy Agency (Irena).

For the UAE, the Arab world and developing countries, the decision taken at the Second Preparatory Commission in Sharm Al Shaikh on Monday was an exciting one. Late into the night, after three long rounds of voting, the French candidate, Hélene Pelosse, was elected as the agency's first director-general.

Appropriately, the Irena headquarters will be hosted in Masdar City, which is to be the first zero carbon waste city in the world, comprising some 40,000 inhabitants as well as the Masdar Institute for Technology - an Arab MIT, which will receive guidance in terms of administration, research, and training from the Massachusetts Institute of Technology in the US.

Masdar City is a clean-technology cluster in a special economic zone - meaning that businesses there will pay no taxes while enjoying a free flow of capital and 100 per cent company ownership.

It is located 100 kilometres from Dubai, near a new Formula 1 track, 30 minutes from the Abu Dhabi airport and not far from Abu Dhabi itself.

The UAE will cover all relocation costs to incubate Irena in Masdar City, as well as offering abundant research funds and scholarships.

Crucially for developing countries, $50 million (Dh183.9 million) a year will be made available to fund renewable energy projects in emerging economies to spur sustainable development.

The UAE is definitely looking beyond the age of petroleum. This can be seen from the fact that the country is developing nuclear energy for civilian use.

As such, the government has signed a nuclear development pact with the US and a deal with the French national energy company Areva for the construction of nuclear plants. It was therefore not surprising that Masdar City won the right to host the Irena headquarters.

The other candidate cities were Bonn, Vienna, Copenhagen and Prague. The last two dropped out of the bidding, so the final three contenders were the UAE, Germany and Austria. Of course the politics behind the scenes was between countries, but this was really about the future of cities.

Countries will continue to play politics, but cities also compete against each other so that some - like Masdar City - emerge as potentially ideal places to live.

According to the UAE presentation given by Masdar CEO Dr Sultan Ahmad Al Jaber, Masdar City is a "living laboratory" of a "revolution already under way" in renewable energy.

Germany and Austria sold their cities as international hubs, each already hosting a plethora of international institutions. Germany also highlighted its experience in renewable energy and technological expertise.

But the opening Austrian presentation was eye-closing, and while the Germans tried to be livelier, it was the UAE who dazzled the audience with an interactive presentation put together by the same creative media company that worked closely on US President Barack Obama's electoral campaign.

Then closed-door politics took over. Germany and Austria withdrew their candidacies and the UAE won the right to host the headquarters.

As a compromise, a technical office will be situated in Bonn and a liaison office in Vienna. Besides creating a logistical nightmare, this last minute decision was received with annoyance by South Korea, Japan and Kenya, who felt that all of the countries involved should have been consulted.

The Egyptian chairman said these comments would be included in the final report of the Preparatory Commission and held out the possibility that regional offices could be hosted in Asia, Africa and the Americas.

Although the UAE won the right to host the headquarters, Germany will try to make the most of its technical office. Germany has considerable experience and technological prowess, and it will not want to give up its advantage in this area.

his could lead to a problematic situation in the future and the development of a sort of tug-of-war between the offices in Bonn and Masdar City.

But for now, the decision to host the headquarters in the UAE will have positive knock-on effects for investment, travel, tourism and trade in the Middle East.

The importance of Irena can be seen from the fact that the United States, Japan, Angola and Fiji have recently signed on, pushing membership up to 136 countries.

The US joined the agency on Monday, the decision coming shortly after the House of Representatives passed Obama's energy bill, which stipulates that countries should be punished for failing to abide by international emissions regulations.

Of course, the US, as a major polluter, faces a considerable challenge in reducing its emissions.

The UAE signed a deal with the US for the development of nuclear energy for civilian purposes under the Bush administration.

Now that the US has joined Irena, cooperation between the two countries will continue under the Obama administration.

The decision to host the Irena headquarters in Masdar City shows that not everyone thinks the UAE is built only on sand.

Stuart Reigeluth is a Middle East specialist based in Madrid.