4 December 2023

The U.S.-U.A.E. Business Council hosted a panel discussion on financing the energy transition at the U.A.E. National Pavilion in the COP28 Blue Zone on 4 December 2023. Conversation focused on ways that governments and private sector institutions can jointly mobilize green finance and de-risk clean energy projects. 
 
H.E. Sharif Al Olama, Under Secretary for Petroleum and Energy Affairs at the U.A.E. Ministry of Energy and Infrastructure, discussed the U.A.E.’s 2050 Energy Strategy, which aims to triple the U.A.E.’s renewable energy capacity and improve energy efficiency through 150-200 billion AED ($41-54 billion) in investments by 2030. He credited the private sector for developing technologies that support such initiatives as well as for financing solutions because they see the economic benefit of doing so. The challenge is to reduce the risk for financiers of investing in the developing world, where over 700 million people still do not have access to electricity.  He called for the private sector to provide technological solutions and funding to make it economically viable to use fossil fuels in a more sustainable way through carbon capture technology. 
 
Jay Collins, Vice Chairman of Corporate and Investment Bank at Citi, affirmed Citi’s commitment to achieve net-zero emissions associated with its financing activities by 2050. He outlined the challenges to achieving this, particularly the dearth of viable projects, and he described Citi’s strategy to operationalize this commitment through sector-specific approaches. He spoke of the importance of countries truly realizing their NDCs and the need for policy signals – carrots and sticks – to accelerate private sector activity to support NDCs. He also stressed the need for more viable green projects, as well as appropriately synchronizing supply and demand during the energy transition.
 
Jay Horine, Managing Director and Global Co-Head of Energy Investment Banking at JP Morgan, said he is very encouraged by the “innovation, excitement, and community” he has seen at this COP. He stressed that JPMorgan is committed to finance and facilitate providing more than $2.5 trillion in financing through 2030 to advance long-term solutions that address climate change and contribute to sustainable development. He also spoke about the interdependence of rare earth minerals and energy. 
 
Conversation turned to overcoming the obstacles to financing hydrogen projects. H.E. Al Olama reported that the U.A.E. has over 7 hydrogen projects underway and anticipates that it will produce 1.4 billion tons of hydrogen annually by 2031. It is creating a hydrogen oasis to cut down on costs by minimizing transportation. However, H.E. Al Olama noted the challenge to scaling global hydrogen production without assurances of demand; only 10% of clean hydrogen production capacity planned by 2030 has identified off takers, and only 10% of that has binding contracts. He added that a carbon pricing mechanism and improving the technology for transporting hydrogen are both critical to make hydrogen a reality. He concluded by praising the Inflation Reduction Act, which he thinks will eventually get hydrogen to competitive prices, and reviewing various approaches around the globe to make hydrogen a feasible energy solution.
 
For more information on this event or the Business Council’s COP28 programming, please contact Graham Reitman at greitman@usuaebusiness.org or click here.