JBIC navigates the energy transition with key stakeholders to jointly create a valuable future

As a long-term strategic partner of ADNOC and United Arab Emirates, Japan Bank for International Cooperation (JBIC) has been supporting economic development/integration of UAE and the region through its financings, especially in energy and infrastructure sector.

Over the past few years, boundaries between energy and infrastructure have been getting lower, as driven by a sincere desire and effort to solve the energy trilemma; energy security, energy affordability and energy sustainability. UAE has been spearheading this move, highlighted by the UAE Consensus adopted at COP28. The UAE Consensus brought the energy sector as a critical part of the solution for the climate challenge. JBIC has also been leading this move through its contribution to AZEC (Asia Zero Emission Community, the platform of Asia’s various pathways to Net Zero co-created by Japan) as well as financing innovative projects in UAE and the rest of the world. Building on these achievements, I believe this is the right moment to add Finance & Investment as one of the core pillars of ADIPEC to further accelerate energy transition by mobilising more finance and investment to address the energy trilemma.

In July 2024, we concluded a US$3 billion Green Credit Facility with ADNOC. This loan aims to support decarbonisation efforts by ADNOC and its subsidiary within and beyond UAE while promoting further joint business development between UAE and Japan. As ADNOC and its subsidiaries, such as Masdar, is active globally, the facility also serves as a bridge to provide energy solutions that meet the needs of developing countries and regions, such as Africa and Central Asia. The facility was not the first transaction in our green journey with ADNOC. In 2022, JBIC financed the inaugural subsea electricity transmission project in UAE: Project Lightning. Project Lightning connects offshore oil and gas facilities with onshore clean energy, significantly contributing to the decarbonisation of ADNOC’s operation. Our finance worked as an anchor to secure investment by Kyuden International (subsidiary of Kyushu Electric Power, a Japanese utility company) and financing from various financial institutions to this landmark US$3.2 billion project finance deal.

JBIC also supports development of new energy, namely hydrogen and ammonia. In June 2024, JBIC co-financed a US$27 million loan to Mitsui & Co., for its ammonia production and sales business in UAE. This is a small but important step forward to create a resilient supply chain and global market for hydrogen and ammonia that are essential for decarbonising the economy, including the hard-to-abate sector. I think the Middle East, along with the United States and Australia, would be one of the primary supply sources of hydrogen and ammonia.

This means the energy sector of the Middle East could be a solution provider for climate change. We must note, however, that competition in this new global market would be fierce. I am currently working with governments and key players in the region on how our finance can make these projects more competitive and bankable. I encourage all parties, including financial institutions, investors and governments, to join this journey at an early stage and offer their solutions to make these pioneer projects competitive in the global markets, not only for the several initial years of operation but, more importantly, for decades to come. Now that some projects are moving from simple “ambition” to tangible “business plan”, I believe financial sectors can contribute to structure an economically robust scheme.

Another important point is how AI/digital can contribute to the energy sector. This is reflected in the fact that ADIPEC 2024 has added AI/digital solutions to its discussion theme. Significant efficiencies could be achieved through AI/digital solutions but there are challenges for meeting huge electricity demand from AI and data centres. It is also important to note that AI/digital solutions should be used in compliance with appropriate standards and guidelines, such as the Hiroshima AI Process adopted during the G7 Hiroshima summit
in 2023.

Finance and investment were important keys for civilisation and industrialisation, thereby contributing to the evolution of human beings and society. I believe this should be applied for our tireless efforts to tackle climate change as well as realistic, affordable, and sustainable energy transition. Realising a sustainable future in cooperation with various stakeholders is one of the key focus areas of JBIC. We are committed to contributing to sustainable economic development by our financing.