Finance Monthly September 2021 Edition

9 www.finance-monthly.com NEWS - MONTHLY ROUND-UP Saudi Arabia’s PIF Buys 30% Stake in Luxury Carmaker Pagani Saudi Arabia's sover- eign wealth fund has bought a 30% stake in Italian luxury car manufacturer Pa- gani, which produces some of the world’s most expensive su- percars. Upon completion of the deal, the Public Investment Fund (PIF) will become a minority shareholder in the luxury carmak- er. The deal remains subject to customary conditions and the financial details of the deal remain un- disclosed. The company has said that the PIF will become a stakehold- er alongside existing minority sharehold- ers Emilio Petrone and Nicola Volpi as part of an extended strategic partnership that will help Pagani thrive in the next steps of its growth plan. The company was founded in 1992 by the Pagani fam- ily, who will remain a majority sharehold- er. Horacio Pagani, Pagani’s founder, chief design officer, and chief executive will retain his leader- ship position within the company. Under its Vision 2030 plan, Saudi Arabia plans to diversify the Arab world’s larg- est economy while reducing its reliance on oil. At the end of the second quarter of this year, the sov- ereign wealth fund’s investments in US publicly listed com- panies were valued at $15.94 billion. The fund aims to more than double the value of its assets under management and commit $40 bil- lion each year to the development of the kingdom’s economy. Finance Firms Push to Close Coal Power Plants in Asia Some of the larg- est financial institu- tions in the world are pushing for the speedy closure of coal-fired power plants in Asia. The initiative, de- veloped by British insurance company Prudential, is being driven by the Asian Development Bank (ADB) which is aim- ing to have the plan ready for the COP26 climate conference in November this year. The initiative will also involve ma- jor banks Citi and HSBC. Amid the rising pres- sures of the climate crisis, the plan aims to tackle the largest man-made source of carbon emissions with public-private partnerships buy- ing coal-fired plants to close them down far sooner than they otherwise would be. ADB’s Vice President for East Asia, South- east Asia and the Pacific said that 35 years of carbon emis- sions could be saved through the plan. The ADB aims to prepare for Novem- ber’s COP26 event by launching a pilot programme in a de- veloping Southeast Asian nation, such as Vietnam, the Philip- pines, or Indonesia. The initiative will also aim to raise the funds for the pur- chases of the coal- fired power plants at significantly below the normal cost by offering lower than usual returns to in- vestors. However, some aspects of the initiative still need to be finalised, includ- ing how the group can convince the owners to sell their power plants, what will be done with the power plants once they have been closed down, and what role carbon credits could poten- tially play in the plan. The initiative comes as major investors and commercial and development banks have come to favour green energy over fossil fuels amid ef- forts to meet climate targets. A fifth of the world’s greenhouse gas emissions come from coal-fired elec- tricity generation. The International Energy Agency has predicted that global demand for coal will grow by 4.5%, with 80% of that increase stemming from countries in Asia.