MUFG gives a brighter future to the energy transition in Saudi Arabia
According to MUFG, Saudi Arabia’s energy sector is poised to transition to a more sustainable and balanced industry, driven by the country’s rapidly rebalancing economy and strengthening its growth pace. Propelled by the Kingdom’s 2030 Vision, Saudi Arabia will continue to implement its declared structural reform, which will have a strong pivot towards sustainable energy based on its 2050 Energy Strategy, in which the country is committed to a net zero economy by 2060.
Hiroaki Fujisawa, Head of MUFG Riyadh Branch, said, “Saudi Arabia’s net zero commitment is central to its efforts for an orderly transition through energy market stability. The Kingdom’s overall transformation strategy places a strong emphasis on carbon neutrality and ESG, which are aligned with MUFG’s goal of “committing to creating a better future”. Today, we are seeing increased demand from our clients in Saudi Arabia for green finance, which is expected to shape the Saudi energy sector. In addition to our own “green” commitments, we aim to extend an even broader range of customer financing covering innovations and initiatives that promote carbon neutrality.
Ehsan Khoman, Head of MUFG’s EMEA Emerging Markets Research Team, said: “We expect investment to accelerate as the Kingdom accelerates the delivery of its investment program in line with targets. of Vision 2030, with ESG management anchoring the transformation plans. At 7.8%, the growth rate we now anticipate for 2022 will be the fastest pace of expansion in more than a decade and more than double the rate of 3.3% recorded in 2021, when the economy rebounded from its pandemic. contraction.”
As the Kingdom’s commitment to embrace energy transformation increases, so does the pace of this transition. With the intention of becoming the world’s largest exporter of hydrogen by 2030, the country is building the world’s largest hydrogen plant, powered exclusively by 4 GW of solar and wind energy for an investment of 5 billion dollars. The Saudi Green Initiative is another project that is expected to reduce carbon emissions by more than 270 million tons per year; NEOM will feature integrated renewable energy systems that rely on 100% renewable energy sources; and “The Line” project, a mega-development that brings a 170 km long city to life, will have a zero car community that preserves 95% of the natural environment and will be powered entirely by clean energy.
Another strategic project in the eastern province of Saudi Arabia in which MUFG is involved and which will be commissioned in 2024, Jubail 3B, includes an independent reverse osmosis water plant with a capacity of 570,000 m3/d. , and includes solar power units to reduce grid electricity consumption.
“We are committed to supporting growth in Saudi Arabia, particularly in the energy transition and green finance. We are committed to providing stakeholders with bold and innovative financing solutions that will help them deal effectively with drastic changes in economic, social and lifestyle norms. MUFG provides strong support not only for renewable energy, but also for the implementation of innovative technologies such as hydrogen/next generation energy. The Saudi government has laid out its roadmap for the future, and MUFG is well equipped to help clients in the Kingdom meet their financing needs to achieve their goals safely, securely and consistently. Our deep knowledge, strong presence and long-term partnerships in Saudi Arabia and the region, where we have a footprint that dates back over 100 years, gives us an added advantage,” added Fujisawa.