UAE financial sector ready to increase sustainable finance in sync with net zero goals

The UAE’s financial sector is aligned with the country’s net-zero emissions goals and boosting the availability of green finance for local businesses to accelerate sustainable economic development in sync with the Emirates’ carbon neutral ambitions, according to reports. government officials.

Forty financial institutions are already pursuing sustainable finance initiatives, setting an example and helping to develop and diversify the country’s economy, Mohammed Al Shorafa, chairman of Abu Dhabi’s Department of Economic Development, said on Wednesday.

“The UAE’s financial sector is committed to helping the country achieve its national climate goals and agenda, including the Net Zero by 2050 strategic initiative,” he said at the fourth edition. of the Abu Dhabi Sustainable Finance Forum, which is part of Abu Dhabi. Dhabi Sustainability Week.

“I believe we have made steady progress and demonstrated the breadth of our sustainable finance and economic diversification initiative.”

However, much more needs to be done, including spurring innovation, broadening the sustainable economic base and boosting public-private partnerships before the UAE achieves its goal of carbon neutrality by mid-century, said said Mr. Al Shorafa.

The department is already “facilitating and encouraging” the provision of smarter and greener finance to local businesses, reflecting the emirate’s approach to the future of finance and sustainable development.

The Abu Dhabi IPO fund worth 5 billion dirhams ($1.36 billion), which will soon be managed by Added, is a step in this direction.

The IPO fund was launched by the Abu Dhabi government last year as part of a broader package of incentives and reforms aimed at boosting the emirate’s capital market and helping local businesses to raise funds by listing on the Abu Dhabi Stock Exchange.

“Our mandate is to identify and invest in seven to ten private companies, including family businesses and SMEs. [small and medium size enterprises]and support up to 20 enrollments per year with advisory services,” he said.

Added will select private sector entities for investments and listings based on various eligibility criteria, including sustainability and prospects for their long-term contribution to the economy, as well as their potential to further deepen capital markets. of the emirate.

“Applicant companies will have a sustainable financial model, with a clear growth trajectory and a solid capital history,” he said. This will help bring components of the national economy globally in a “sustainable way”, he said.

The United Arab Emirates is pursuing aggressive targets to reduce its carbon footprint and last year became the first country in the Middle East to set a net zero target. The country aims to achieve carbon neutrality by 2050 and plans to invest $160 billion in clean, renewable energy sources alone over the next three decades.

Abu Dhabi Global Market, the emirate’s international financial center and one of the fastest growing financial centers in the world, is also committed to helping the UAE meet its sustainability commitments.

ADGM, which hosts the annual forum on sustainable finance, has strengthened its “regulatory framework, policies and services” as an international financial hub to promote sustainable investments.

“ADGM’s mandate is to provide a progressive financial platform and a holistic ecosystem that supports the long-term economic development and sustainable growth of Abu Dhabi and the United Arab Emirates,” said the Chairman of the ADGM. ADGM, Ahmed Al-Zaabi.

The financial hub also announced on Wednesday a cohort of 18 financial firms that have joined the Abu Dhabi Declaration on Sustainable Finance, bringing the total to 59. Launched in 2019, the voluntary membership-based initiative aims to foster activities sustainable financing and responsible investments in UNITED ARAB EMIRATES.

New signatories include the Gulf Bond & Sukuk Association, Franklin Templeton, Deloitte, AirCarbon Exchange, Natixis, Libra Project, Think HQ, Apex Group, Carbon Credit Xchange, and Ernst & Young Middle East, among others.

Our mandate is to identify and invest in seven to 10 private businesses, including family businesses and SMEs, and support up to 20 listings annually with advisory services

Mohammed Al Shorafa, Chairman, Department of Economic Development Abu Dhabi

The UAE, which has a long-standing commitment to protecting its environment and embracing clean energy, began funding clean energy projects over 15 years ago and has so far invested more than 40 billions of dollars in the sector.

The country is still pursuing the goal of increasing its sustainable power generation capacity to decarbonize its grid and sustainable finance will play a major role in achieving this goal, said Mohammed Al Hammadi, Managing Director and Managing Director of Emirates Nuclear Energy Corporation at the forum.

“The economy of the UAE continues to grow rapidly, which means that our demand for energy is also growing, especially the demand for electricity,” he said.

“The UAE government has made clean electricity a strategic priority” and has invested heavily in nuclear and solar power generation capacity to meet its sustainability goals.

In 2017, the UAE launched the Energy Strategy 2050, which aims to increase the contribution of clean energy in the total energy mix to 50% by 2050, from 25%. The country plans to reduce its carbon footprint from power generation by 70% and seeks to increase consumer and business efficiency by 40% by mid-century.

The country is the only Arab country to have a full-sized operational nuclear power plant. The Emirates recently completed the construction of Unit 3 of the Barakah nuclear power plant. Unit 1 is fully operational and Unit 2 was recently connected to the main network and continues to be tested.

Updated: January 20, 2022, 3:30 a.m.

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