“Green” (Islamic) finance for the green economy: The case of hydrogen

Vladimir Malenko
3 min readNov 23, 2022


NEOM, Saudi Arabia — the future Hydrogen city

When will hydrogen replace oil as a source of prosperity for the Gulf? The key word here is “when”, not “whether” or “can it”. In 2021 seven countries in the Gulf region (GCC + Iran + Iraq) produced about 30% of total world crude oil, and they held about 48% of world’s proven crude oil reserves.

Green hydrogen is hydrogen generated by renewable energy by the electrolysis of water. Its opposite is grey hydrogen which is produced by steam reforming of natural gas. Green hydrogen is the key ingredient in the declared energy transition.

Cleanest H2 will be produced in Saudi Arabia

The International Renewable Energy Agency predicts that hydrogen and its derivatives will account for 12% of global energy consumption by 2050. And the leadership in this market will be clearly taken by the key Gulf countries: Saudi Arabia plans to become the largest global supplier of hydrogen, and the UAE intends to stay close second with 25% of the global market share. Along with other hopefuls, namely Oman and Egypt, the Muslim-dominated Middle East will rule the market of fuel of the future.

Clean energy may become for Islamic private equity what railroads had been for the first conventional private equity funds — a “raison d’etre” — a reason for being, and a trigger for development.

Forty-six green hydrogen projects are already on the way in the MENA; 40 more with a price tag of over US$20 billion are on the drawing boards. And by the benevolent will of the regional leaders, Shariah compliant funds will foster the development of the future energy, as it is already done by major hydrogen developers such as Masdar (UAE), OQ (Oman) and NEOM (Saudi Arabia).

Masdar is making the UAE a real H2 contender

Thus, in 2021 Apicorp (Arab Petroleum Investments Corporation from Saudi Arabia) signed a US$125 million Shariah compliant facility for Saudi utilities developer Acwa Power, which had previously raised over US$700 in its maiden Sukuk.

The world’s leading Islamic finance institutions, including Shariah compliant private equity funds are preparing for the GCC investment bonanza. But as it usually happens, the biggest “Xs” will be made by venture capitalists, the ones that selected the right technologies to be developed and later bought out by their colleagues farther along the “money food chain” — the private equity investors.

Europe with its numerous “hydrogen valleys” in Spain, France, Germany, the Netherlands and Estonia have become the centers of attraction for venture capital, including from Shariah compliant sources. With the help of Shariah advisor Yassar Capital, Al Waseelah platform is offering Orestes, an actively managed portfolio of young private companies that operate in the Green and Turquoise hydrogen markets.

Al Waseelah platform — the leader in Islamic investing

Turquoise hydrogen is hydrogen made using a process called methane pyrolysis to produce hydrogen and solid carbon.

The new generation of Islamic investors is no longer limited to a few plain vanilla sovereign Sukuk. Sharing risks and rewards is one of the most fundamental principles of Islamic finance.

From Islamic VCs to the stock exchange