National Bank of Abu Dhabi (NBAD) has announced it will commit $10 billion over the next decade to finance clean energy projects.
It claims the pledge is a first for a GCC bank, and it forms part of an NBAD strategy to support projects with an environmentally sustainable focus in Africa, Asia and the Middle East.
The bank’s Financing the Future of Energy report, published last March, claimed that $48 trillion was required over the next 20 years to meet global energy demand, and renewables would play a critical role in future.
Of the total $48 trillion funding gap, said the report, $640 billion of investment is needed for renewable energy projects across the West-East Corridor – the region that stretches from Africa through the Middle East to Asia.
The NBAD-commissioned research was conducted by the University of Cambridge and PWC, in collaboration with Masdar. It was presented at the Global Financial Markets Forum 2015 in Abu Dhabi.
NBAD set up a dedicated Sustainable Business team in August 2015 to evaluate and create new financing products to support the development of renewable energy and sustainable businesses.
Following this week’s funding pledge, the team will embark on an engagement programme with key regulators, policy makers and environmentally sustainable businesses.
Alex Thursby, group CEO of NBAD, said: “The world is heading towards a very significant funding gap for energy globally. This is particularly true across the rapidly growing super-region the West-East Corridor, and filling it is going to be a big task.
“As the leading bank in the Middle East, we want to make a real contribution to the region’s ability to rise to the energy challenge. We believe that even in the current climate of low oil prices, the transition towards more renewable sources in the energy mix will continue because the underlying drivers are long term and strong.
“It is for this reason that we have made this commitment of $10bn today. Through our Sustainable Business team, we hope to become a positive force in the banking sector in the region.”
Nathan Weatherstone, head of sustainable business banking at NBAD, added: “Our research has identified that there is approximately $640 billion of investment required for renewable energy projects across the West-East Corridor.
“But sustainable business is broader than just renewables and includes activities like clean transportation, sustainable water, waste management and energy efficient real estate. The scale of the opportunity is significant.”
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