Gulf sovereign wealth funds commit to climate pledge

Saudi Acwa Power-generating windmills are pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco. (Reuters)
Updated 06 July 2018

Gulf sovereign wealth funds commit to climate pledge

  • Saudi Arabia's PIF among sovereign funds backing charter
  • Move follows Trump rejection of 2015 Paris climate accord

LONDON: Four Gulf states, including Saudi Arabia, are among the six major oil-producing countries to put their names to a climate charter designed to promote green investment and drive low-carbon economic growth.

The sovereign wealth funds of Saudi Arabia, the UAE, Kuwait, Qatar, Norway and New Zealand, which together are worth more than $3 trillion, have established a joint framework designed to encourage companies they invest in to address climate challenges and incorporate environmental policies into their future business plans.

The heads of the funds met with French President Emmanuel Macron and Norwegian Prime Minister Erna Solberg at the Elysee Palace in Paris on Friday to put their names to the pledge.

The signatories say in the charter that the transition to a low-carbon economy will help to create new investment opportunities and could help finance the shift toward clean energy sources down the line.

These countries “see a great commercial interest along the way, because they are saying that they think low-carbon economy is the future,” said Lawrence Yanovitch, who is the coordinator of the working group of the six sovereign funds

The development builds on discussions during a climate summit in Paris last year, when world leaders, investment funds and energy magnates promised to channel more resources toward tackling climate change.

The summit followed the rejection by US President Donald Trump of the 2015 Paris climate accord, which achieved a consensus among almost 200 countries on cutting greenhouse gas emissions and curbing global warming.

In the framework, the funds said they aim to “promote better informed decisions, thereby contributing to a smooth transition to a more low-emissions economy.”

Gulf states are already taking steps to mitigate climate change and transition toward low-carbon economies. Saudi Arabia’s Vision 2030 lays out the country’s renewable energy targets as it seeks to phase-out fossil fuels and reduce its annual emissions by up to 130 million tons of carbon dioxide emissions by 2030.

The Kingdom’s sovereign wealth fund, known as the Public Investment Fund (PIF) — worth $230 billion — is key to plans to diversify the Saudi economy.

Regional funds have been boosting their investments in the renewables sector as solar projects, in particular, gather pace across the Middle East.

The PIF last week upped its stake in utility ACWA Power which has rapidly grown to become a major developer of solar power projects.

It recently achieved the lowest contracted solar tariff in the world for the 300MW Sakaka PV project, the first ever utility scale solar power project in Saudi Arabia.

UK ‘to decide on Huawei 5G next week’

Tensions have been rising between the UK and US over Huawei. (AFP)
Updated 19 min 37 sec ago

UK ‘to decide on Huawei 5G next week’

  • Chinese tech giant expected to be permitted to develop country’s 5G network

LONDON: The UK is expected to announce next week whether to allow China’s Huawei to develop its 5G network, an official said on Friday, setting out reasons for agreeing despite opposition from the White House.

The official said the decision had not yet been taken but that it was likely to be next week.
There had been speculation that the UK would allow Huawei into “non-core” elements of the next-generation 5G mobile networks, such as antennae and base stations attached to masts and roofs.
The US has banned Huawei from the rollout of its 5G network because of concerns — strongly denied — that the firm could be under the control of Beijing.
Washington has been lobbying London to do the same, even threatening to limit intelligence sharing between the two allies if Downing Street goes its own way.
The UK Business Secretary Andrea Leadsom said this week that a decision would be made “soon,” adding that many factors were being considered.
These included “the availability of other providers” and “the work that Huawei has already done in the UK,” she said.
The senior official said that London — unlike Washington — had been using Huawei technology across national systems for the past 15 years.
Security agencies believe they have managed the risk so far and will be able to do so with the 5G network, the official said.
Banning Huawei entirely could also cost “billions” of pounds and delay the rollout of 5G and full-fiber broadband, the official said.
There is also a problem in that few other firms have the technology that Huawei does.
The company provides the least expensive and most advanced alternative for super-fast data transfers behind technologies such as self-driving cars and remotely operated factory robots.
“There is a market failure here,” the official said, adding that while this could be addressed in the future, for now “we are where we are.”
The UK’s debate about Huawei has dragged on for more than a year, amid intense political turmoil over its exit from the EU.
Brexit day is now set for Jan. 31.