Fancy doing a Masters with your course fees paid, accommodation provided and all in a climate with guaranteed sun, year round? Then why not apply to be in the second wave of students at the Masdar Institute of Science and Technology, a new postgraduate institution in Abu Dhabi, which specialises in renewable and sustainable technologies, sited in what's billed as the world's first sustainable city?

The first cohort of 92 students from 22 different countries, including the United Kingdom, began their two-year MSc programmes last week. They are spread around five different courses: engineering and systems management; information technology; materials science and engineering; mechanical engineering; and water and environment.

Over the next five years, the student body is expected to grow to around 800, with PhDs added to the mix from next year. The teaching strength, now standing at 20, and recruited from around the world, will eventually expand to more than 100.

The institute's unique selling point is that the students will be living in an environment, Masdar City, that uses and develops many of the cutting-edge sustainable practices that they'll be learning about in class.

Teaching is in English and more than 50 per cent of the time will be spent on research, including projects whose fruits will, at least potentially, feed into new technologies that will further enhance the city's sustainable credentials.

"The students doing mechanical engineering, for example, will be studying with an emphasis on clean and environmentally sound technologies," says Tariq Ali, the institute's vice-president for research and industrial relations.

A native of Newcastle, Ali arrived in Abu Dhabi, capital of the United Arab Emirates, in April, having been at London's Imperial College for 21 years, first as an astrophysics PhD student and latterly as director of the college's energy and environment office.

His CV is littered with references to work in the sustainability field: he helped write the sustainability chapters for London's successful bid to stage the 2012 Olympics, and is on the board that advises the British Government on renewable energy.

To the casual observer it might seem odd that an academic of Ali's pedigree would be attracted to this location, given that Abu Dhabi, like its Gulf neighbours, has a reputation that is far from green. The private car, for example, dominates a transport system where pedestrians are rarely given pavements to walk on, and recycling was, until recently, almost completely invisible.

Ali concedes that these factors initially made him pause before taking the job. But he says that what he's experienced since taking up the post has reassured him. "What I've seen is that they have mapped out a trajectory of how they are going to change their society," he explains.

This is firstly a reference to the credentials of Masdar City itself, now taking shape from a building site. When finished, it will cover an area of about 6sq km, where 40,000 people will live and a further 50,000 work. The city will be carbon neutral and car free, with all energy, water and other materials sustainably sourced and used. Waste production will be zero.

The Masdar Institute, designed by Foster + Partners, aims to blaze a trail for sustainable working, with, for example, at least 70 per cent less demand for water, energy and cooling than in comparable buildings. Students and teachers, initially housed in a building outside Masdar City, will occupy the institute during the course of this academic year.

Once in their permanent living accommodation, the students will also, in effect, be taking part in an experiment in energy efficiency.

"Instruments will monitor everything they do, as far as use of electricity and other resources is concerned," says Ali, "and what we learn from that will guide how we design student accommodation in the future."

The institute, including all student costs, is being paid for by the Abu Dhabi government. Joint capital and operational spending over the first five years is estimated at $1.2bn (£730m). The hope is that many of the postgraduate students will stay on and fill key jobs in the emirate's renewable energy sector, which, in time will become a world leader in the commercialisation of new sustainable technologies.

The institute has also been developed in collaboration with Massachusetts Institute of Technology, which, among other things, has overseen the recruitment of all teaching staff. The senior academic, Professor John Perkins, has moved from his post as vice-president and dean of the Faculty of Engineering and Physical Sciences at the University of Manchester.