More GCC green energy projects may tap into capital markets: S&P

More GCC green energy projects may tap into capital markets: S&P

ABU DHABI: More renewable energy projects, including solar plants, in the GCC are expected to tap into capital markets for financing, S&P Global Ratings has said. The UAE and Saudi Arabia – the Arab world’s two largest economies – have already set up public-private partnership frameworks, making project financing an “obvious choice” for funding, the rating agency said in a report on Tuesday. Gulf countries including Bahrain, Kuwait and Saudi Arabia have also set up wind farms as part of efforts to diversify their energy mix.

“The governments of Saudi Arabia and the UAE have announced their intention to continue to invest in this space. We believe plans to establish a renewables sector could help them in their efforts to achieve their climate goals,” S&P said. The issuance of green bonds to finance climate-related projects grew by 38 per cent in the Middle East during the five-year period to the end of 2020, according to a Boston Consulting Group report. Middle Eastern governments accounted for about 97 per cent of green bond issuances in 2020 alone, compared with 13 per cent four years earlier, the report said.

The global sustainable finance market, which was valued at $3.65 trillion in 2021, is set to