Thursday, February 2

Qatar Eyes Debut Green Bond in Latest Gulf Move to Tap ESG Funds


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(Bloomberg) — Qatar’s government is planning to issue its first green bond as one of the world’s largest liquefied natural gas exporters seeks to tap into a booming global market for sustainable debt, people with knowledge of the matter said.

Officials at the Ministry of Finance are in early talks with international banks to potentially raise billions through green bonds, the people said, asking not to be named because they’re not authorized to speak publicly.

The sale is likely to be controversial with investors in environmental, social and governance assets, given Qatar’s gas exports mean it’s among the world’s top carbon emitters on a per capita basis. Borrowers can often cut costs through green bonds, used to fund projects to reduce emissions, though natural gas is frowned upon.

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It’s not clear what the money would be spent on. Qatar is yet to hire banks for the plans and a deal could potentially be done via state-owned gas firm Qatar Energy, the people said. Representatives at the Ministry of Finance did not respond to requests for comments.

Qatar’s neighbor Saudi Arabia is also readying its first-ever green bond through the government and the kingdom’s sovereign wealth fund. The Persian Gulf’s petrostates, highly exposed to the impact of global warming, are investing billions into clean energy in an effort to transition from being among the world’s top polluters.

While Saudi Arabia and the UAE have pledged to cut carbon emissions to almost nothing by 2050, Qatar plans to only reduce greenhouse gas emissions by 25% by 2030.

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The country’s energy minister, Saad Al-Kaabi, said in October that it would be wrong to commit to eliminating emissions without having a proper plan in place. Kaabi said the gas shortage in Europe and parts of Asia, which has sent global prices soaring, is caused in part by a lack of investment in fossil fuels.

Qatar expects gas, a cleaner fuel than oil or coal, to remain crucial to the global economy for decades. The country is spending almost $30 billion to boost its LNG production capacity by around 50% in the next six years.

Green bond sales from the Middle East gained traction last year with investors piling into notes sold by Egypt, Islamic Development Bank and regional state-run buildings Saudi Electricity Co. and Qatar National Bank, who raised funds for projects including more sustainable, smart meters and renewable power infrastructure. Global green bond sales hit a record of over $500 billion in 2021.

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