Japan’s role in financing sustainable energy in the Middle East

November 15, 2022

President of Mizuho Bank, Masahiko Kato recently spoke at ‘Davos in the Desert’ event, the Future Investment Initiative (FII). We spoke with him after the event about Mizuho’s commitment to the region and Japan’s role in financing sustainable energy.

 “Mizuho Bank made a deep commitment to business in Saudi Arabia over 60 years ago, and we were the first Japanese bank to establish a presence there” says Kato san. “It is important that we contribute to Saudi Vision 2030, and we want to promote financial support and other solutions toward the realization of sustainability strategies, starting with decarbonisation.

When asked about the importance of collaboration, Kato san summarises, “by bringing in people from Saudi Arabia government agencies and related entities, we want to work toward the development of human resources, making additional contributions to investing in the future.”

 “Mizuho Bank has been a financial partner since the creation of Arabian Oil Company, LTD. in 1958”. Commenting on Mizuho’s longstanding relationship with the region, Kato san adds, “we have continued to develop our business there ever since. Our clients include government agencies such as the Ministry of Finance, PIF, and SAMA (Saudi Arabian Monetary Authority), while also encompassing government affiliated companies such as Aramco, SABIC, SEC, and ACWA Power. In addition to providing capital support to these companies, Mizuho Bank has also brought in funds from Asian investors via syndication and has worked hard to forge a strong connection between Asia and Saudi Arabia.”

“Mizuho Bank has also acted as an advisor to Saudi Arabia infrastructure enterprises such as the privatization of water and sewage control via NWC. We are also active in financing and advisory roles to decarbonisation related enterprises in Saudi Arabia, providing both financial and non-financial support. Furthermore, we feel that it is important for us to continue to contribute to future development in Saudi Arabia, and we are working hard to support the development of human resources by creating internship opportunities via the MiSK Foundation among other initiatives.”

“Mizuho Bank has a memorandum of understanding with the Ministry of Investment, and we are working hard to make investing between Japan and Saudi Arabia more attractive. We have acted as the Japanese chair of the Japan-Saudi Business Council for many years, and Mizuho is the only bank which sends colleagues to the Japan-Saudi Vision Office to support Saudi Vision 2030. These are just some of the ways in which we have worked to help create a bridge between Saudi Arabia and Japan.”

When asked about the creation of Saudi Vision 2030 and initiatives to reach net zero by 2060, Kato san summarises, “As a partner working in tandem with Saudi Arabia, even more will be asked of financial institutions moving forward. For our clients in Saudi Arabia, Mizuho Bank is providing support for divestment with an eye toward the realization of sustainability strategies, starting with decarbonisation. Some of our other successes include financing of renewable energies and advisory roles to assist with the implementation of Sustainability Transformation (SX). It is expected that there will be continued development in Asia of Middle Eastern technologies, and Mizuho Bank wants to use its position as a Japanese affiliated financial institution to forge a stronger connection between both sides.

“Especially, through SX we can work together to create a sustainable future, and continuing to provide our clients and society with a ‘healthy harvest’ is a role that Mizuho Bank takes very seriously. The strength of Mizuho Bank lies in our ability to provide customers with a wide range of both financial and non-financial support services for SX, making us a one stop shop for all of their needs.”

“Not just the business for large corporations, Mizuho Bank has helped Japanese small and medium sized companies from fundraising to providing incentives to deal with environmental and societal problems. With the goal of reducing CO2 emissions across the entire supply chain and promoting other environmental and social initiatives, we are the first overseas Japanese bank to create an initiative to handle sustainable supply chain finance. Also, working toward technological development and the creation of plans for business models related to creating an environment that supports carbon neutral implementations for our clients, we have reestablished our stock investment framework based on our own calculations, with operations underway that are expected to lead to an investment amount exceeding 50 billion yen.”

“Mizuho Bank is not working alone, as we have signed the ‘cooperation agreement for revitalization of sustainable finance’ with the city of Tokyo. Mizuho Bank is making use of our own specialized know-how and network to promote initiatives such as those that support small and medium sized companies, working hard to improve coordination between the public and private sector.

“Moving forward, we will make constructive dialogue (engagement) a starting point, and we want to continue to work hard to fundamentally understand potential issues and needs so that we can develop and propose optimal solutions.”

“What do we want the future to look like when the people born this year turn 30 years old? In order to reach those goals, what can I do? What can we all do together? As a strong partner for Saudi Arabia, we are making great progress toward a glorious future.”

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