DUBAI, July 2 (Reuters) - The UAE'S Masdar has formed a partnership with German solar power systems maker Conergy CGYG.DE that aims to provide up to 40 megawatts of solar power capacity within two years.
Masdar is an initiative set up by the Abu Dhabi government to develop sustainable energy and other clean technologies.
The UAE is the world's sixth-largest oil exporter, but like its Gulf Arab neighbours is looking to diversify its economy. One of Masdar's objectives is to ensure Abu Dhabi's role in the future energy industry.
The 40 MW of solar power will be enough to power 10,000 homes in the emirate of Abu Dhabi, Masdar said in a statement.
The partnership aims to make Masdar the top developer and installer of photovoltaic systems in the region.
"The agreement will allow the new partnership to capture the huge potential of the Middle East and North Africa," Masdar said in the statement.
Solar power could help reduce peak power demands on the electricity grid, Masdar Chief Executive Officer Sultan Al Jaber said.
UAE power demand peaks in midday in the summer when air conditioning needs are highest. Power demand in the UAE is growing rapidly as petrodollars fuel economic expansion.
The Masdar initiative is driven by the Abu Dhabi Future Energy Company (ADFEC), which is owned by the Mubadala Development Company. Mubadala is 100 percent owned by the government of Abu Dhabi.
On Wednesday, ADFEC awarded Canada's SNC Lavalin (SNC.TO) a contract for a feasibility study on a project to capture carbon emissions and boost oil output. The project is part of a wider plan in the United Arab Emirates to reduce emissions of greenhouse gases, blamed for global warming, by 40 percent.
Abu Dhabi is one of seven emirates in the UAE and the location of the country's capital.