With Egypt set to host COP27 and the UAE set to host COP28, all eyes have turned to the Middle East – especially countries such as Saudi Arabia and the UAE, which have set ambitious net-zero targets and have successfully begun implementing carbon capture, solar, wind, and green hydrogen projects, among others. Yet, experts have stated that the discourse around energy transition in the region needs shift into more inclusive and balanced territory.
Speaking to Arabian Business on the latest episode of AB Talks, Dr Ahmed Ali Attiga, the chief executive officer of the Arab Petroleum Investments Corporation (APICORP), said: “An energy transition that is balanced, pro-active, and inclusive, requires the dialogue to be much wider between all the stakeholders than what has taken place. For example, at COP26, the oil producers were not even invited.
“The region in particular, sits at the intersection of both sides of the transition. It’s one of the largest hydrocarbon producers, but at the same time, it has embraced and started the implementation of serious measures to diversify the energy mix. This is how the energy transition needs to be looked at. It’s not a zero-sum game where one side wins and the other side loses. The objectives of the energy transition should not be mutually exclusive, but rather an integrated process of diversifying the energy mix and making all elements of the mix greener and cleaner.”
Another part of making energy diversification more inclusive will revolve around enhancing private sector partnership in energy transition. Earlier this year, APICORP and Saudi-based Islamic Development Bank (IsDB) started the ‘Infra Initiative’ – a $1bn private sector-focused financing initiative.
Commenting on the need for more such initiatives, Attiga added: “Partnerships between multilateral financing institutions can help in accelerating the energy transition in a balanced direction, while mobilising additional funding for projects and transactions that are required to move in this direction.
“Over the past few years, the participation of the private sector in executive energy and infrastructure projects have grown by 20-25 percent. By using different vehicles and schemes such as private-public-partnerships, private equity, and project financing such initiatives can help countries that are coming out of a conflict or are in the middle of a transition.”
Meanwhile, the Russia-Ukraine conflict has caused volatility in commodity prices, while oil prices have lingered above $100 per barrel for more than a month.
“The uncertainties in the world have taken a very dangerous turn globally, with the Russia-Ukraine war that unfortunately started a few weeks ago,” Attiga said.
“The early warning signs in terms of supply chain disruptions, inflation, and other macro- and micro-economic effects are very worrying. We hope that matters don’t escalate and that containment limits the damage that this crisis has caused. Given that Russia is a key member of the OPEC+ alignment it is hard to predict what will happen in the oil markets going forward. The fact that the OPEC+ remains resilient, and has kept to its framework agreements through this crisis is what has kept the market from severe fluctuations.”
Catch more insights from Dr Ahmed Ali Attiga in the AB Talks video above, where he details the challenges facing the energy sector, and the untapped opportunities that lie ahead in 2022.
(Source: ArabianBusiness YouTube channel)
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