Etihad Credit Insurance, the UAE’s federal export credit agency, plans to provide about $3 billion in guarantees to back renewable energy projects in the country and its developers operating abroad, following the Emirates’ pledge to become climate neutral.
“The total sector will attract approximately $3bn of investment in the UAE for renewable energies. This is what I see in the next couple of years,” Massimo Falcioni, chief executive of Etihad Credit Insurance, told The National in an interview.
The $3bn being pledged over the coming years will support developments undertaken by Masdar, as well as those by SkyPower, Mr Falcioni said.
ECI signed a preliminary agreement with utility-scale solar developer SkyPower to provide trade credit insurance, export and project finance guarantees, as well as investment protection solutions to help hasten the installation of renewable power capacity.
Earlier this year, the credit agency also committed to backing renewable energy investments being developed by Abu Dhabi’s Masdar.
“We are assisting Masdar now. It is a wind farm project in the region. The size is $100 million per ticket. The project is in Uzbekistan, in [Zarafshan]. They announced already and we are supporting that. It would be one of the largest wind farm parks in the world,” Mr Falcioni said.
The wind power capacity of the Uzbek project has been expanded to 1.5 gigawatts, with commercial operations expected to begin by the end of 2024.
Uzbekistan has become a hotspot for renewable energy investment from key Middle East players. The country aims to install 5 gigawatts of solar and 3 gigawatts of wind power capacity by 2030, as it focuses on meeting 25 per cent of electricity needs from renewable sources by that year.
The ECI issued Dh3.4bn ($925m) worth of revolving credit guarantees as of September 2021. The volume is three times higher than the guarantees issued last year for the same period, the company said.
“We are supporting projects. So, we are offering our guarantees to lenders, in order to develop, to sustain developers of projects in sustainable energy,” Mr Falcioni said.
“We are here to support any foreign company based in the UAE, which gives a minimum 20 per cent local content of the UAE. So, our goal is to attract project developers in renewable energy to use UAE manufactured goods or services or engineering.”
The ECI is also considering becoming carbon neutral in line with the UAE’s vision to reach net-zero emissions by 2050.
The company no longer invests in coal or oil but will continue to invest in gas as a transitional fuel.
“We will support anything [that] helps with decarbonisation. So, we know that this will not happen in one day. It has to be a smooth transition and we are here there to support anything which enhances and reduces emissions. Any project … so, sometimes it could be still in petrochemicals, as long as it is low carbon,” Mr Falcioni said.
The company is also backing efforts to upgrade utility infrastructure, as well as the energy transition efforts of large oil producers such as Iraq.
The ECI signed an agreement earlier this year to provide debt reinsurance for US multinational GE and the Iraqi Ministry of Finance for the rehabilitation of seven power plants in Iraq.Internet Explorer Channel Network