In a significant move towards sustainable energy, the Abu Dhabi National Oil Company (ADNOC) and the Japan Bank for International Cooperation (JBIC) have signed a $3 billion green financing agreement. This deal, worth approximately 11 billion UAE dirhams, aims to support ADNOC’s decarbonization and energy transition initiatives.
Strategic Green Financing Partnership
The agreement, which follows a Heads of Agreement (HOA) signed in January, is part of JBIC’s Global action for Reconciling Economic growth and Environmental preservation (GREEN) lending program. Supported by Japanese commercial banks, this facility represents ADNOC’s first green funding effort, signifying a notable shift towards sustainable practices.
ADNOC’s Decarbonization Goals
Khaled Al Zaabi, ADNOC Group Chief Financial Officer, emphasized that the credit facility will advance the company’s strategy for a fair global energy transition. ADNOC has committed to reducing its carbon intensity by 25% by 2030. This is part of a broader investment plan, where ADNOC has allocated $23 billion (AED 84.4 billion) to decarbonize its operations and accelerate the development of future energy sources, including hydrogen, geothermal, renewables, and carbon capture technologies.
Implications for the Energy Sector
This partnership sets a precedent for how traditional energy companies can adopt greener practices. The financing facility will back various projects under ADNOC’s decarbonization efforts, reinforcing the company’s role in the global energy transition.
Strengthening UAE-Japan Ties
The agreement highlights the strengthening economic and environmental cooperation between the UAE and Japan. It demonstrates how international partnerships can drive progress in balancing economic growth with environmental preservation. The JBIC’s GREEN lending program plays a crucial role in this collaboration, reflecting a shared vision for sustainable energy.
Looking Ahead
The ADNOC-JBIC green financing agreement is a promising step towards a sustainable energy future. By utilizing financial tools to support decarbonization and renewable energy development, both organizations contribute to the global climate goals. This initiative underscores ADNOC’s dedication to sustainability and its strategic move towards a greener energy landscape.
Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
5th July, 2024
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