ADNOC secures first Korean-backed green financing to accelerate decarbonisation projects

ADNOC has secured a $2 billion (which is roughly AED 7.34 billion) green financing facility backed by the Korea Trade Insurance Corporation, also known as K-SURE, to fund projects aimed at lowering carbon emissions across its operations. The company made this announcement during His Excellency Dr. Sultan Al Jaber’s visit to South Korea, where he had the chance to meet Mr. Youngjin Jang, who is both President and Chairman of K-SURE, according to ADNOC’s official statement.

This facility is structured under ADNOC’s Sustainable Finance Framework. The company explains that the money will be directed toward projects that meet international standards set by the sustainable finance market. An independent Second Party Opinion was provided by Sustainable Fitch, which confirmed that ADNOC’s framework aligns well with global sustainable finance principles. In the transaction, First Abu Dhabi Bank served as the Green Loan Coordinator, while Santander acted as the Export Credit Agency coordinator, overseeing the process.

Khaled Al Zaabi, who’s the Chief Financial Officer of ADNOC Group, shared during the South Korea announcement that, “This facility really reflects ADNOC’s commitment to transforming energy systems, while, honestly, keeping a close eye on capital discipline. Thanks to our partnership with K-SURE, we’re expanding our access to green finance, building stronger economic ties with South Korea, and reinforcing ADNOC’s position as a leader in lower-carbon energy.”

Now, this deal with K‑SURE comes shortly after a series of transactions that ADNOC points to as building a solid track record in sustainable funding. Last year, the company struck a $3 billion agreement with the Japan Bank for International Cooperation, known as JBIC, which, according to ADNOC, means they’ve managed to secure around $5 billion in green funding over the last 18 months. JBIC’s own press releases clarify that its credit line was established under its GREEN operations program. Specifically, JBIC has reported a $1.8 billion credit line, with co-financing pushing the total to $3 billion. JBIC states their facilities are primarily meant to support ADNOC projects focused on decarbonization and energy transition, covering renewables, hydrogen, ammonia, and carbon capture and storage.

In the broader energy industry, these types of sovereign-backed export credit agencies are becoming increasingly active in financing energy transition projects, especially in the Gulf region. JBIC’s statements mention multiple project loans made from the July 2024 credit line, including co-financed loans for renewable energy and next-gen energy projects spread across Asia, Africa, and the UAE. Interestingly enough, JBIC also announced a memorandum of understanding with ADNOC to foster strategic collaboration along the entire energy value chain.

ADNOC claims it’s one of the least carbon-intensive oil and gas producers out there, adding that by 2030 they plan to cut their operational carbon emissions intensity by 25%. The company also intends to invest around $23 billion (AED 84.4 billion) into decarbonizing its operations and boosting investments in emerging energies like hydrogen, geothermal, and renewables. Notably, ADNOC is a founding member of the Oil and Gas Decarbonization Charter, which is basically a coalition of national and international oil firms committed to eliminating methane emissions by 2030 and achieving net-zero emissions by or before 2050.

External observers and industry players point out that there’s a clear distinction between funding aimed at cutting emissions within oil and gas operations and investments in non-fossil energy projects. Export credit agencies often support large-scale industrial shifts, like scaling up hydrogen, ammonia, or carbon capture, while still backing existing hydrocarbon activities. JBIC’s releases emphasize their support for projects that contribute both to energy stability and decarbonization efforts.

This is the first time ADNOC has secured a green facility supported by a Korean export credit agency. Over time, South Korea’s ECAs have become more willing to back energy transition projects as part of broader strategic industrial collaborations. For ADNOC, this kind of deal highlights a strategic effort to diversify sources of sustainable finance and to strengthen business connections with East Asian partners.

The deals also raise some questions for climate-tech stakeholders in the UAE. While tapping into green finance from ECAs can help reduce the cost of capital for big transition projects, experts warn that the actual climate benefits depend heavily on which projects get classified as “eligible” under these frameworks. Ensuring that financed activities deliver real decarbonization outcomes will be essential for technology developers, project financiers, and regulators working with ADNOC’s initiatives.

ADNOC didn’t specify exactly which projects will be financed through the K‑SURE facility. Instead, they described the funds as available for “eligible lower‑carbon investments,” giving themselves broad discretion, though that means the entire climate tech ecosystem will have to wait and see how it all actually plays out, relying on future disclosures at the project level to get a clearer picture of where the money ends up.

As international and local credit agencies ramp up green lending, transparency around the eligibility criteria and the real-world results will become increasingly important, especially for climate tech firms in the UAE. Clear, measurable outcomes like emissions reductions, along with independent verification and transparent reporting, will be key to turning these facilities into real catalysts for scaling up hydrogen, CCUS, geothermal, and renewable energy projects.

For now, ADNOC’s announcement about the K‑SURE deal, along with prior transactions with JBIC, paints a picture of growing international support for funding lower-carbon energy initiatives, a significant trend for Gulf energy producers. According to JBIC, these facilities are meant to back both decarbonization efforts and stable energy supplies for their partner markets. On ADNOC’s part, they see this new financing as a way to deepen their ties with South Korea and broaden their access to green finance, while also supporting their stated energy transition goals.

Source: Noah Wire Services