Qatar’s plans to launch an Energy Bank is credit positive for the Islamic finance sector because it supports its growth and development in the Gulf Cooperation Council (GCC), Moody’s said yesterday.
On 19 March, Qatar announced the launch of Energy Bank, an Islamic bank that will focus on funding projects related to oil and gas, petrochemicals and renewable energy. The establishment of this bank, which plans to be operational by fourth-quarter 2019, is credit positive for the Islamic finance sector, the global rating agency said in a report.
Energy bank will be based in the Qatar Financial Center, and has a target capital base of $10bn to fund hydro-carbon projects across the world. “We expect the Energy Bank will also support the GCC’s energy sectors regionally and internationally. The bank’s establishment follows the end of Qatar’s self-imposed moratorium on the development of new natural gas projects” Moody’s expect Qatar to increase its liquefied natural gas (LNG) production by around 30 percent in the next five to seven years. Likewise, Kuwait Petroleum Corporation committed to increasing production capacity by up to 4.75 mbpd by 2040 from around 3.2 mbpd at end-2018. The GCC and Malaysia (A3 stable) have led growth in Islamic finance over the past decade. In the GCC, Islamic finance penetration increased to 44 percent as of September 2018 from 32 percent in December 2009.
Source from: The Peninsula