Dubai-based Yellow Door Energy, which is supported by multiple investors including the International Finance Corporation, is contemplating borrowing $100 million (Dh367 million) in debt to invest in renewable projects.
The firm, which already has a presence in Jordan, Bahrain, Saudi Arabia and Egypt, is expected to take an 18 percent blow to its earnings for 2020 as a result of the COVID-19 pandemic but anticipates requirement for renewables to remain strong irrespective of the general market situation.
“Our 2020 targets haven’t changed. We’re going to have about $110m of projects operating by the end of this year. There are some slight delays there but on an annual basis, it remains the same.” – Jeremy-Crane
CEO – Yellow Door Energy
The organization plans to achieve 100MW of capacity by year-end and is considering borrowing “approximately $100m in debt” for multiple projects from different banks, Mr Crane replied.
Yellow Door Energy, which was a spin-off venture by the Middle East centric solar energy investor Adenium Energy Capital in 2015 has International Finance Corporation, Mitsui & Co, Norway’s Equinor Energy Ventures and Dammam-based Arab Petroleum Investments Corporation (Apicorp) as its investors.
The firm, which has 55MW of projects under development, suffered unusual setbacks due to supply chain interruptions as most of its materials are sourced from China. Projects in Jordan, one of its key markets, were also influenced by the country’s severe lockdown measures, which limited staff from entering the sites.
However, most projects are now back on track, and although timelines have been shifted back, none are facing completion risks, Mr. Crane said.
According to the International Renewable Energy Agency, Decarbonization of the global energy system away from fossil fuels to renewables could generate $98 trillion (Dh360tn) in cumulative growth between now and 2050, adding an extra 2.4 percent to the gross domestic product.
Mr. Crane admits that while short-term support may favor other sectors through a “shock transition period”, governments are destined to swivel to renewables both for economic and environmental reasons.
“Renewables are cheaper, less expensive than oil or any other form of generation. If people are motivated to save money, they’re motivated more than ever to make the change to renewables. In many ways this shift, the desire to reduce their cost of energy, is going to mean an increased demand for renewables,” he said.
Organizations such as the World Economic Forum, meanwhile, have issued cautionary reports, suggesting that the pandemic could derail progress in clean energy growth as countries pause economic expansion to focus on immediate health risks to populations.
The company has three projects underway in the South Asian country, largely to serve commercial and industrial clients.
“We’re working with many businesses now to help them reduce their cost of energy and provide them with a greener footprint, which is certainly extremely important for the exporters, who want to provide reassurance to … whether it’s Walmart in the US or somebody in Europe that they’re following the greenest standards possible in manufacturing,” Mr. Crane said.