DOHA: Doha Bank is committed to issuing a multi-billion dollar sukuk to finance investment in renewable energy, group chief executive officer, R Seetharaman has said.

He, however, admitted the bank would not be able to meet its original schedule for sukuk issuance because of “global economic turbulence”.

Last year, Doha Bank announced its intention to sell a $1bn sukuk to finance investment in renewable energy by mid-2008 and use the money, among others, for setting up the Gulf region’s first carbon credits exchange at Lusail.

Seetharaman said, “We are committed to the carbon trading scheme and in alignment with the national policy on renewable energy.

It is shaping up well. Our decision to hold on is a calculated one. Even if we leverage our strength and enter the global market it will be expensive to borrow money now due to the economic turbulence. It will not be competitive and we cannot make money out of it.”

When Doha Bank announced the project, the market conditions were quite different, he pointed out. “The situation has changed now. To borrow money now, I have to pay much more than I did last year. It does not make sense,” Seetharaman said.

Doha Bank is waiting for the completion of Energy City at Lusail for setting up the exchange for trading greenhouse gas emissions permits, he told Gulf Times yesterday.

“We have already purchased land at Lusail at a cost of QR35mn. Now we have to construct a purpose-built green building for an energy trading platform. We are at it,” Seetharaman said.

He said Doha Bank is going through regulatory approvals for the carbon trading scheme. Once the market settles down, the sukuk will be issued.

“I may scale up the sukuk size if the situation demands. I will align myself to the business plan,” he said.
Seetharaman said the bank was working with California-based Rain Trust Foundation on the carbon credit project though the focus areas are different.

“They are mostly into bio-fuels. But we are looking at solar energy and other renewable options,” he added.