Masdar Capital, the investment arm of Abu Dhabi's clean-energy company, is eyeing its first investments in waste-heat projects.
Until now, its investments have been in renewable electricity production, such as wind or solar energy companies.
By moving into projects that burn waste to treat water or heat a building, Masdar Capital would be tapping into a trend that investors from around the globe have cited as key to growth this year.
"The core opportunities we see for investment right now are actually less in power generation, more on solving environmental issues about waste," said Alex O'Cinneide, the fund's general manager, at an energy conference in Abu Dhabi. "How do we get energy from those waste streams?"
The government-owned company's five-year-old Masdar Clean Technology Fund recently closed on a US$285 million (Dh1.04 billion) round of funding, adding to an already deployed $250m. Masdar Capital also jointly operates a $265m fund with Deutsche Bank.
Last year, Masdar Capital chose a single venture, a $50m investment in a Chinese wind company, with 150 megawatts of wind turbines under construction.
This year's investments are likely to remain in East Asia, where Mr O'Cinneide and other investors expect a solid policy and growth in demand to back investment.
Over the next 25 years, China is expected to add 85 gigawatts of solar photovoltaic capacity, 335 gigawatts of wind, and 105 of nuclear, said an IEA economist at the conference.
"We believe we have a strong pipeline of deals," Mr O'Cinneide said. "2011 will get the right amount of capital."
China's latest five-year plan has made its renewables market especially attractive to clean-energy investors such as Masdar Capital.
"The market has just been structurally changed," Mr O'Cinneide said. "Those companies in China have been given free capital, in essence."
In other parts of the world, stronger clean-energy policy frameworks need to come into place before Chinese renewables growth can be matched.
"What we find hard to handle is not understanding how risk and return will be balanced," Mr O'Cinneide said. "People see the opportunities. The capital's available."
