UAE's financial sector commits to sustainable development

Institutions will help companies with green finance to develop a new economy based on sustainability and committed to the goal of zero carbon emissions

REUTERS/CHRISTOPHER PIKE  -   General view of the Dubai International Financial Centre (DIFC)

The UAE continues to strive to accelerate sustainable economic development and, at the same time, achieve a zero carbon future. To this end, the country's financial sector is committed to the same goal as the nation and has already begun to implement initiatives to green the system

According to government officials, 40 financial institutions have already begun planning how to invest in sustainable finance. Mohamed al-Shorafa, chairman of the Abu Dhabi Department of Economic Development (ADDED), said that the financiers of the future would take a cue from these partnerships to contribute to better development in the country.  

"The UAE's financial sector is committed to helping the country meet its national climate goals and programmes, in particular, the net-zero by 2050 strategic initiative," said the department chairman. 

Bolsa de Dubái. AFP/KARIM SAHIB
AFP/KARIM SAHIB - Dubai Stock Exchange.

For his part, he added that there are still many achievements to be made, including boosting sector innovation and expanding more sustainable economic bases for the country's businesses to reach the goal of carbon neutrality. To take action, Al-Shorafa says that his office is already starting to encourage and facilitate smart and greener financing for local businesses. Abu Dhabi has started by offering 5 billion dirhams for ADDED to administer to develop this project.

"The candidate companies will have a sustainable financial model, with a clear growth trajectory and a strong capital history. This will help bring the components of the national economy to the global stage in a sustainable manner," he said. 

The UAE remains committed to implementing projects that seek to reduce its carbon footprint. Last year it was the only country in the Middle East to establish a plan to realise this goal and according to the nation's executive it aims to be carbon neutral by 2050 with zero emissions. Plans have begun by investing 160 billion dirhams in renewable energy sources to produce clean energy over the next 30 years.  

For more than 15 years, the UAE has invested more than 40 billion dirhams in clean energy projects in the green sector. The Gulf nation has an important role to play in sustainable energy development because of the oil companies it owns, so decarbonisation of these and sustainable financing will be a plus point in achieving the main goal.

"The UAE government has made clean electricity a strategic priority and has invested heavily in nuclear and solar power generation capabilities to achieve its sustainability goals," said Mohamed al-Hammadi, managing director and chief executive officer of Emirates Nuclear Energy Corporation. 

Notably, Emirates is the only country in the world with a nuclear power plant, the fully operational and sizeable Barakah Nuclear Power Plant, after building a new unit for its expansion. It is connected to the main grid and provides clean energy to a large part of the nation.  

Una vista general del edificio The Gate en el Centro Financiero Internacional de Dubái (DIFC). REUTERS/CHRISTOPHER PIKE
REUTERS/CHRISTOPHER PIKE - A general view of The Gate building at the Dubai International Financial Centre (DIFC).

Many centres have already started to develop the project. One of them is Abu Dhabi Global Market (ADGM), an Emirati-based finance company that is committed to the country's goal and has long organised annual sustainable finance forums promoting sustainable investments. Along with other institutions, it has joined the Abu Dhabi Sustainable Finance Declaration, which now has 59 centres seeking to promote sustainability in the country.  

"ADGM's mandate is to provide a progressive financial platform and holistic ecosystem that supports the long-term economic development and sustainable growth of Abu Dhabi and the UAE," said ADGM chairman Ahmed al-Zaabi. 

In addition, Emirates has several programmes operating across the country and internationally as well, such as the recent 'Etihad 7' scheme that seeks to finance projects that bring clean energy in Africa to more than 100 million people.