The countries of the Middle East and North Africa region have always played a pivotal role in the oil and gas markets, but this role will not stop or end if the world decides to move to low-emission sources of energy.
Opinions unanimously agree that the countries of the Middle East and North Africa will have a leading role in the transition to renewable energy. It is expected that renewable energy investments will account for 34 percent of electricity investments in the Middle East and North Africa, in the period from 2022 to 2026, according to “APRICORP”. .
The reason for this is due to the presence of a preferential advantage in this region. According to “McKinsey & Company”, the Middle East and North Africa receives from 22 to 26 percent of the solar radiation energy on Earth, due to its geographical location.
And solar energy is not the only thing that distinguishes the region, as countries in this region are expected to be a source of 10 to 20 percent of the global hydrogen market by 2050, according to Roland Berger.
It is likely that hydrogen will achieve annual revenues for the Gulf countries ranging from 120 to 200 billion dollars by 2050. Indeed, many countries in the region have begun to establish projects to transport and export hydrogen to energy-consuming countries.
The region has about 10 percent of the global carbon capture and storage capacity.
Despite the many challenges that the countries of the region must face in this context, the Middle East and North region has the capabilities that allow it to play a pivotal role in the energy transition process that the world is currently witnessing.
Sustainable Finance Growth in the Middle East and North Africa in 2022
The most prominent question about green financing comes in this promising area.
Senior manager in the financial services sector at Arthur D. Little, Nael Amin, said in this week’s episode of the “Energy World” program for “Sky News Arabia”, that green financing in the countries of the Middle East and North Africa, including green bonds, In 2020, it amounted to about $3.8 billion.
This amount, according to Amin, has grown significantly during the year 2022, specifically in 4 countries, Turkey, the United Arab Emirates, Egypt and Saudi Arabia, due to the development in the region and the increase in investments in this sector, in addition to providing some important requirements in this sector.
Amin explained that, in addition to financing, the region is witnessing progress in many areas with regard to dealing with environmental factors, which represents an attractive factor for investors.
He added that during the past two years, banks have significantly increased their legislation in this field, as each Gulf country is now applying the necessary standards and requirements in order to support the business environment in the field of green energy.
There are challenges, according to Amin, the most prominent of which is the challenge of data, as he indicated that banks are getting closer to the activities of customers in order to know the necessary data about the funded projects. For example, in the case of financing the construction of a building, it is necessary to know the amount of energy that this building will consume.
The Gulf countries work and cooperate with each other with the aim of understanding the framework that should be adopted to develop infrastructure in the field of renewable energy and promote sustainability, which will positively affect and support green investment in general in the region.
Arthur D. Little: Growing sustainability is not just about financing
