(MENAFN- The Peninsula) Lani Rose R Dizon | the Peninsula
Qatar, which occupies a unique position globally with its great potential for renewable energy, will play a big role in the growth of the global sustainable finance market, according to an official.
Addressing the webinar ‘Fast Forward: Sustainable Finance and the Green Eonomy' organised by the Qatar Financial Centre (QFC) in partnership with Credit Agricole CIB yesterday, Nibras Hadi, Vice President of Sustainable Banking Middle East & Africa at Credit Agricole CIB, said the global sustainable finance market, which has doubled its size in the past few years, is no longer a niche market and will quickly move into the mainstream as a leading finance tool in the next two years.
Highlighting the importance of sustainable finance and green investments in recovering from the COVID-19 pandemic, Hadi also reiterated that ‘building back greener' is the vaccine for the planet against climate change.
'Over the past year, we've seen lots of social bond transactions due to the pandemic. The size of the sustainable bonds market has doubled in the past few years, and has now grown to 20 percent of all bonds issued globally. We can expect it to increase up to about 50 percent over the next couple of years. Investors are now very interested in investing in environmental, social, and governance (ESG) products."
"The sustainable finance market is quickly moving into the mainstream to become a leading finance tool in the next two years. And Qatar will definitely play a big part in the story.
Qatar has a very unique position globally and has a very good potential for renewable energy. We've seen the right investments being made.
As Qatar invests more in ESG, sustainable finance will be a key source of funding for Qatar, added Hadi. Speaking about Qatar's potential as a major player in the global renewable energy market, Hadi said: 'Qatar has a much smaller energy demand and is also a very big investor in technology; I think more than its neighbours. Qatar will be able to scale up a lot faster. The country also has a lot of offshore winds.
A real advantage for Qatar is the bioenergy. There has been a very big push to explore bioenergy. And one of the largest waste management centres in the world is actually in Qatar.
Hadi added that Qatar already has the infrastructures needed to export green hydrogen, which is also seeing a growing demand globally. He said: 'Green hydrogen is produced by renewable energy.
And because Qatar has a lot of potential when it comes to renewable energy, and it can already produce it at very low tariffs, it would by default mean that it could also produce green hydrogen very cheaply as well.
Another advantage for Qatar with hydrogen is that when it comes to transporting hydrogen, it's important to mention that hydrogen is transported in the same way as gas.
It can be shipped and it can be sent through pipes. Qatar's advantage is it already has gas pipelines and infrastructure in place. If they modify it slightly, it can handle all of the hydrogen.
To date, the European Union is the largest issuer of social bonds ($90bn), compared to the US and Middle East issuers, said Hadi. He added that the Middle East is still fairly new in the market, but is also starting to pick up.
He highlighted the Qatar National Bank's (QNB) $600m green bond issuance in September, which was also Qatar's first ever green bond issuance, and the largest green issuance by a financial institution in the Mena region. QNB's green bond issuance was oversubscribed to about $1.8bn.
Speaking about the GCC sustainable finance market, Hadi said: 'The GCC market also has a big advantage, with its resources of solar power and wind power. I see some places in Qatar and in the neighbouring countries where they have started to tap into these resources. Sustainable finance will follow once these projects are laid out. There is a lot of room for green financing. The only way that it could really start is by having investments from governments towards these kinds of projects. And it is happening. Over the next few years, there can be a big growth in the region, he added.
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