Dubai: Abu Dhabi National Oil Company (ADNOC) is considering a sale of green bonds for the first time, as companies and governments in the Gulf increasingly look to tap investors in sustainable assets.
The oil company is speaking to banks about a possible green issuance. The company may opt instead for sustainability-linked bonds, which provide more flexibility than green bonds because they’re not tied to specific projects.
The company declined to comment. ADNOC’s discussions are separate from its plans to raise about $3 billion to $5 billion from conventional bonds this year.
Net-zero goal
In October, the UAE became the first Gulf state to commit to neutralizing planet-warming emissions within its borders. It aims to do that by 2050.
ADNOC is a crucial part of the UAE’s net-zero target. The company is planning to spend billions of dollars on technology to capture carbon and manufacture hydrogen, a fuel which emits only water vapor when burned. It’s also involved in the UAE’s strategy to ramp up solar power through renewable-energy firm Masdar.
Middle East moves on green
Egypt sold the Middle East’s first sovereign green bond in late 2020. Saudi Arabia and Qatar’s governments are considering following suit, as is the Saudi sovereign wealth fund. Like those of other countries, the net-zero targets of the Gulf states such as the UAE, Saudi Arabia and Bahrain only apply to domestic emissions. That means they can in theory continue to export billions of dollars worth of oil and gas each year.
Sales of environmental, social and governance debt are soaring globally. In the Middle East and North Africa they jumped to $19 billion in 2021, more than 2.5 times the level a year earlier.
