According to MUFG, the energy sector of Saudi Arabia will transition into a more balanced and sustainable industry due to the growth of the country’s economy. As per the Kingdom’s Vision 2030, the country will have sustainable energy with its Energy Strategy 2050 and will become a net-zero economy by 2060.
Hiroaki Fujisawa, head of MUFG’s Riyadh branch, said, “Saudi Arabia’s net-zero pledge is central to its efforts for an orderly transition through energy market stability. The Kingdom’s comprehensive transformation strategy has a strong focus on carbon neutrality and ESG, which are aligned with MUFG’s own purpose of ‘Committed to empowering a brighter future.’ Today, we see increased demand from our clients in Saudi Arabia for green finance, which is set to shape the Saudi energy sector. In addition to our own ‘green’ commitments, we aim to extend an even broader range of financing to customers covering innovations and initiatives that promote carbon neutrality.”
Ehsan Khoman, head of MUFG’s EMEA Emerging Markets Research team, said, “We expect investment to gain pace as the Kingdom steps up delivery on its capital spending program in line with Vision 2030 objectives, with ESG management anchoring transformational plans. At 7.8 percent, the growth rate we now anticipate for 2022 will be the fastest pace of expansion in more than a decade and will run at more than double the rate of 3.3 percent recorded in 2021, when the economy bounced back from its pandemic-driven contraction.”
The Kingdom also plans to become the largest exporter of green hydrogen in the world by 2030. Saudi Arabia is building a hydrogen plant (the world’s largest) powered by a 4 GW capacity of solar and wind energy with an investment of $5 billion.
MUFG is also involved in Jubail 3B which includes a water plant of 570,000 m3/d capacity powered with solar energy to decrease the consumption of electricity from the grid.
“We are committed to supporting growth in Saudi Arabia, especially in the energy transition and green financing. We are steadfast about equipping stakeholders with bold, innovative financing solutions that will help them deal effectively with drastic shifts in economic, social, and lifestyle norms. MUFG provides strong support not only for renewable energy but also for the implementation of innovative technologies such as hydrogen/next-generation energy. The Saudi government has drawn its roadmap to the future, and MUFG is well equipped to assist clients in the Kingdom in addressing their financing requirements to achieve their goals safely, securely, and consistently. Our deep insights, strong presence, and long-term partnerships in Saudi Arabia and the region, where we have had a footprint that goes back to more than 100 years, give us an additional advantage,” added Fujisawa.