Energy security key to inclusive growth, says Saudi finance minister

Arab News

5 hours ago

RIYADH: Energy security is not a luxury but 'a fundamental pillar for achieving development and inclusive growth,' said Saudi Arabia's Finance Minister Mohammed Al-Jadaan.
Delivering the opening remarks at the OPEC Fund for International Development Forum 2025 in Vienna, Al-Jadaan warned that the absence of reliable energy access undermines critical sectors, including healthcare, education, productivity, and food and water systems.
'With rising geopolitical tensions, market volatility, and surging global energy demand, it has never been more urgent to achieve a more secure and diversified energy landscape,' Al-Jadaan said.
He added: 'This requires a strategic push to diversify energy sources, scale up investment in clean technologies, and adopt innovative financing solutions to accelerate energy access and strengthen long-term energy security.'
Four-point reform plan
Al-Jadaan outlined four policy recommendations for multilateral development banks aimed at boosting global energy resilience. He stressed the need to support all energy sources without bias and cautioned against emissions policies that exclude major energy contributors.
He said such policies risk destabilizing markets and disproportionately impact developing economies and vulnerable populations.
His second recommendation focused on expanding concessional financing to underserved regions. The minister praised the World Bank's 'Mission 300' initiative, which aims to provide energy access to 300 million people in Africa, and acknowledged the contributions of the Islamic Development Bank and the OPEC Fund.
Al-Jadaan also commended Saudi Arabia's Forward7 Clean Fuel Solutions for Food initiative under the Middle East Green Initiative, which promotes clean fuel deployment globally. The program has partnered with institutions including the OPEC Fund, the World Bank, the Islamic Development Bank, and the International Islamic Trade Finance Corp.
De-risking and innovation
Al-Jadaan's third point emphasized the need to de-risk investments in the energy sector to encourage private sector involvement.
He cited mechanisms such as partial risk guarantees, political risk insurance, and blended finance structures as essential tools to mitigate risks and enhance the feasibility of energy projects, particularly in low-income and high-risk countries.
'These tools help mitigate expected risks and enhance the bankability of energy projects, especially in low-income and high-risk countries,' the minister said.
In his final point, Al-Jadaan called for stronger investment in technologies such as carbon capture and sustainable hydrocarbon applications to reduce emissions and maintain supply during the transition to net-zero.
He underscored the far-reaching consequences of energy poverty, including economic instability, forced migration, and increased humanitarian pressures.
Al-Jadaan reaffirmed the Kingdom's aim to generate 50 percent of electricity from renewables by 2030 and achieve net-zero emissions by 2060. These goals are being pursued under the Circular Carbon Economy framework.
'In the Kingdom of Saudi Arabia, we are working with everyone to enhance energy security and eliminate energy poverty, while continuing efforts to combat climate change,' he said.
Development crisis warning
OPEC Fund President Abdulhamid Al-Khalifa also addressed the forum, warning of a worsening global development gap.
He said the world is facing what the UN secretary-general has described as a 'development emergency,' pointing out that only 18 percent of Sustainable Development Goals have made measurable progress since their inception in 2015.
'Developing countries face a $4 trillion annual funding gap, worsened by rising debt servicing costs that are draining resources from essential services,' Al-Khalifa said.
To address this, he said the OPEC Fund is ramping up efforts and leveraging momentum from previous forums. Among its recent actions, the fund has joined the 'Mission 300' initiative to expand energy access.
It has also deployed $1 billion as part of its food security action plan, committed an additional $2 billion to support food supply chains in partner countries, and allocated $1 billion to combat desertification under the Arab Coordination Group's $10 billion Riyadh Global Drought Resilience Partnership.
New trade facility
Al-Khalifa also announced the launch of the OPEC Fund Trade Facility Initiative, a program designed to mobilize billions of dollars in support through 2030.
The facility aims to help countries secure strategic imports, address trade-related liquidity gaps, and strengthen resilience against external economic shocks.
'This is a direct response to an urgent need, and a reflection of our commitments to stand by our partners when it matters most,' he said.
Al-Khalifa emphasized the growing strain on trade as a development cornerstone, citing disrupted supply chains, rising costs, and foreign exchange volatility that are affecting the most vulnerable communities.
Project milestones
In 2024, the OPEC Fund committed $2.3 billion to 70 projects across the globe — a 35 percent increase compared to the previous year.
These projects connected 300,000 households to electricity, built over 500 km of roads, and supported 75,000 farmers and 35,000 women.
As the Arab Coordination Group marks its 50th anniversary this year, Al-Khalifa noted the significance of this milestone, saying the OPEC Fund is honored to stand alongside other member institutions in celebrating five decades of collaborative development efforts.
'We know from experience, when partners align their resources, expertise, and approaches, the results are transformative,' he said.
Both Al-Jadaan and Al-Khalifa stressed that global cooperation and innovation are critical to overcoming current challenges and advancing toward a future of inclusive and sustainable development.