APAC may struggle to find funding for oil and gas sector
This comes as more financial institutions commit less funding for fossil fuels.
The Asia Pacific region may struggle to find funding for oil and gas projects, particularly new ones, as more financial institutions commit less funding for fossil fuels, the Institute for Energy Economics and Financial Analysis (IEEFA) said.
“Lenders, bond investors, and other finance facilitators need to change their policies significantly to fulfill net-zero commitments, at the same time aligning with the national net-zero targets of their home countries,” Christina Ng, report co-author and IEEFA’s Research and Stakeholder Engagement Leader, Debt Markets, said.
“Capital support to the O&G sector in the coming years, particularly on expansion plans, could thus become more elusive.”
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Citing the case of Glasgow Financial Alliance for Net Zero (GFANZ), Ng said capital raising for new oil and gas production is becoming harder as the GFANZ membership grows.
The Asia Pacific, meanwhile, is behind its peers as the region continues to rely on fossil fuel revenue.
“Despite net-zero commitments, the top 20 regional O&G producers generate an average of 96% of their revenue directly from O&G production and related activities, and many still adopt a wait-and-see approach to new energy investments, lagging global peers,” Ng said.