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First Abu Dhabi Bank (FAB) and French energy company ENGIE signed a Memorandum of Understanding (MoU) on Tuesday to team up in finding financial decarbonization solutions.

ENGIE operates in low-carbon energy and services, including renewables, to ensure the world transitions toward environmentally friendly solutions when it comes to the consumption of energy.

FAB bank, on the other hand, has been dedicated FAB Carbon Desk that provides carbon trading and financing options to encourage the development of high-quality carbon credits and facilitates strategic carbon-related transactions.

The signing of the MoU took place at the ongoing COP28 summit in Dubai. As per the agreement, FAB and ENGIE will work on derivatives or financing solutions related to energy, carbon, renewables, battery energy storage systems and green products and credit risk management.

Both entities are also expected to do spot trading or have long-term forward purchase agreements for carbon credits, renewable energy certificates and other environmental products.

Varun Gujral, CEO of ENGIE, said it is a proud moment for the French energy company to partner with FAB and work on decarbonization solutions, adding that the agreement marks a significant milestone for ENGIE and FAB, as it will help strengthen capabilities in driving the energy transition across the Middle East and beyond.

"Through the synergy of our institutions, we are committed to supporting our clients on their decarbonization journey, exemplifying our shared dedication to a greener and more resilient future," he added, WAM reported.

Sameh Al Qubaisi, group head of global markets at FAB, said market-led solutions like trading in high-quality carbon credits will play a vital role in the Middle Eastern country since it will provide practical tools for achieving decarbonization goals.

"FAB is pioneering the use of innovative financial instruments to support decarbonization within our region, building on our leadership in green finance. Our partnership with ENGIE accelerates the growth of the FAB Carbon Desk as part of our Global Markets offering, contributing to our clients' net zero ambitions," Al Qubaisi added.

Proposed in 2021, the FAB Carbon Desk was launched in May to provide tailored carbon solutions within the GCC region and throughout FAB's global network.

The agreement between FAB and ENGIE was signed two days after UAE's Masdar, also known as the Abu Dhabi Future Energy Company, formalized their partnership with Kyrgyzstan's Ministry of Energy and France's Electricité de France (EDF) to develop hydropower and renewable projects.