Ireland’s Amarenco acquires 100% of Jordanian renewables developer Spectrum

Good morning, friends. The midweek slowdown continues — but the weekend is within reach. There aren’t many regional updates, although the Petersburg Climate Dialogue is grabbing headlines.

THE BIG CLIMATE STORY- Irish independent power producer Amarenco Group fully acquired Jordan-based renewables developer Spectrum gaining 100% ownership of the company’s solar energy projects in the kingdom.

^^ We have the details on this story and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- Over 40 state representatives landed in Berlin yesterday for the two-day Petersberg Climate Dialogue, and day one saw calls for the phase-out of fossil fuels from COP28 President-Designate Sultan Al Jaber, German Foreign Minister Annalena Baerbock, and UN Secretary-General Antonio Guterres, who urged the world to make a “quantum leap” in climate action.

Notable targets announced yesterday included Al Jaber’s call to triple global renewables generation capacity by 2030, before ultimately re-tripling the target again by the end of the following decade to tame global warming. Day one also brings welcome news for climate-vulnerable nations: Baerbock told 40 country representatives yesterday that rich nations will finally meet their long-delayed yearly USD 100 bn financing commitment to vulnerable nations after a three-year wait in 2023.

^^ We have the details on this story and more in the news well, below.

The story got widespread coverage in the press yesterday: The Washington Post | Deutsche Welle | Financial Times | Reuters | Bloomberg | France24

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WATCH THIS SPACE #1- World Bank board ready to vote on Banga: The World Bank Group’s executive board is set to vote for US Ajay Banga today after holding a four-hour interview with the candidate yesterday, Reuters reports, citing sources with knowledge of the matter. Banga has impressed shareholders as a “true change maker” who would push reforms at the bank, the sources said. The bank’s current chief David Malpass has informed the board his last day will be on 1 June. The World Bank board said in March that it would consider no other nominees for its top post since Banga was the only candidate nominated.

WATCH THIS SPACE #2- The global Islamic finance industry is projected to grow by 10% in 2023-2024 despite an economic slowdown, the National reports, citing S&P Global forecasts. S&P Global expects the growth momentum seen in 2022 to continue on the back of favorable dynamics in a few core markets in the Gulf Cooperation Council (GCC) — including Saudi Arabia and Kuwait — according to the report by the credit ratings agency. Sukuk issuance volumes are expected to continue to drop this year, albeit at a slower pace than last year, and some countries with high financing needs like Egypt and Turkey will likely tap the sukuk market in a bid to mobilize all available resources, S&P Global says.

What about green sukuk? While sustainability-linked sukuk issuance remains limited, S&P Global projects higher volumes of green sukuk under efforts by issuers to meet investor demand and core Islamic finance countries’ plans to slash carbon footprints and back energy transition globally. “We believe this indicates growth potential for green sukuk issuance and expect to see greater activity in this space as issuers tap global investor interest,” it said.

REMEMBER- Interest in green bonds and green sukuk has been on the rise in the region in recent months ahead of COP28 in the UAE. Last month, the UAE’s state-owned Abu Dhabi National Energy Company (Taqa) raised an aggregate USD 1.5 bn in a dual-tranche green bond issuance which was almost 10x oversubscribed at a final order under the company’s new Green Finance Framework.

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WATCH THIS SPACE #3- Oliver Stone posits nuclear energy as the ‘obvious’ solution to climate change: Academy Award-winning filmmaker Oliver Stone makes the case for nuclear energy as an essential power source in the transition to clean energy in his new documentary Nuclear Now, The New York Times writes. The film — narrated by Stone himself — argues people should be more concerned with the impacts of climate change than the potential hazards associated with nuclear power. Critics, however, worry the film overlooks barriers hindering the growth of nuclear energy, including high costs and the slow construction of nuclear projects, CNBC notes in its review of the documentary. The film premiered in the US earlier this week and there is no set date for release on streaming (watch trailer, runtime 1:55).

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COME TO OUR NEXT ENTERPRISE FORUM-

The Enterprise Exports & FDI Forum, our latest industry-specific conference, is taking place on Monday, 15 May. The Enterprise Exports & FDI Forum will give insiders and newcomers alike the chance to talk about how to develop an export-centered business and how their companies can help Egypt build an export-led economy that makes us a magnet for foreign direct investment (FDI).

Why exports & FDI? In the wake of successive floats of EGP, exports and FDI have never been more important to our economy — or our businesses. We’re gathering some of the CEOs, top execs from local companies and multinationals, investors, bankers and finance folks to speak on how businesses can adapt their strategies to be export-oriented and what Egypt as a country can do to draw foreign investment and much-needed FX. Expect it to be heavy on lessons learned in Egypt and other global growth markets — and lots of success stories. You can learn more on our conference website here.

And what better place to discuss moving our goods than Egypt’s original logistics zone — the Nile. That’s why we’re looking forward to holding the event by the river’s vistas at the Four Seasons, Nile Plaza.

Some of the biggest names in business and finance are on board — are you? The Enterprise Exports and FDI Forum is taking place with the generous support of our friends, including:

Banking partners: Banque Misr | Al Baraka Bank | Emirates NBD | HSBC

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CIRCLE YOUR CALENDAR-

Turkey is hosting the International 100% Renewable Energy Conference this Thursday, 4 May to Saturday, 6 May in Istanbul. The event will bring together experts to discuss the integration of renewables, renewable energy technologies and applications, and the Roadmap to 2050.

The UAE is hosting the Global Green Future Fuel conference from next Monday, 8 May to Wednesday, 10 May in Dubai. The green energy-focused business event brings together policymakers, renewable energy generators, project developers, and chemical and mobility industry representatives to define a new energy future shaped by hydrogen.

Egypt is hosting The Solar Show MENA next Tuesday, 9 May and Wednesday, 10 May in Cairo. The conference brings together policymakers, financiers, and others to develop and futureproof the region’s energy sector as one of the emerging players in developing clean energy solutions and energy infrastructure.

The UAE is hosting The Airport Show on Tuesday, 9 May to Thursday, 11 May in Dubai. The forum’s 22nd edition will bring together over 200 aviation companies and more than 100 buyers from 23 countries. It will shed light on leading innovations in airport sustainability, digitalization, and urban air mobility to facilitate the industry’s path towards sustainable and collaborative airport infrastructure development and operational transformations.

The UAE is hosting the UAE Climate Tech forum on Wednesday, 10 May and Thursday, 11 May in Abu Dhabi. The event will gather over 1k policymakers, CEOs, experts, and investors to discuss collaboration on innovative technologies and economic opportunities in advancing decarbonization across all sectors.

The first MENA Solar Conference is accepting applications from published researchers specialized in PV technology until next Sunday, 30 April. The Dubai Electricity and Water Authority will be hosting the conference from 15 to 18 November, in conjunction with the Water, Energy, Technology, and Environment Exhibition and the Dubai Solar Show 2023. Researchers can submit their papers here.

Check out our full calendar on the web for a comprehensive listing of upcoming news events and news triggers.

The world must be “laser-focused on phasing out fossil fuel emissions,” COP28 President-Designate Sultan Al Jaber said in a speech at the opening of the Petersberg Climate Dialogue in Berlin (watch, at minute 50:30). With a stress on the word emissions, Al Jaber said efforts must be made in tandem to scaling up viable, affordable renewable alternatives. The two-day dialogue — taking place behind closed doors between representatives of over 40 countries — is set to lay the groundwork for what discussions will be taking place at COP28 later this year when the UAE hosts the summit.

Setting a target on renewables could be a key debate: COP28 “should and can reach a target on renewables at the next climate conference,” German Foreign Minister Annalena Baerbock said (watch, at minute 12:43). While Baerbek affirmed that “our objective for COP28 has to be to usher in the end of the age of fossil energy,” there were no further details on what this would mean in terms of the level of investments being poured into fossil fuels (watch, at minute 15:22). Meanwhile, Al Jaber called on participants to triple their renewable energy production capacity by 2030, before re-tripling that number by 2040 in a bid to curb global warming levels (watch, at minute 00:53).

And hydrogen value chains are in the spotlight: Al Jaber also highlighted the importance of adopting government regulations aimed at supporting decarbonization. “We will encourage smart government regulations to jump-start the hydrogen value chain, and make carbon capture commercially viable,” Al Jaber said (watch, at minute 51:56).

REMEMBER- The language around phasing out fossil fuels has been the sticking point of contention in most climate negotiations so far, including the recent G7 meeting where the seven most developed nations could not agree on the wording for a commitment to phasing out coal.

Developed countries to “finally” adhere to climate financing commitment: Germany’s recent efforts to get donor countries to adhere to the USD 100 bn climate funding commitment to developing countries are ongoing — including upcoming talks with Canada on Sunday, Baerbok said, adding that “we are on a good track to finally make good on the USD 100 bn this year” (watch, at minute 17:30).

But some argue it’s too little: Although the 100 bn is “a genuine attempt to finally meet reality,” Barbados Prime Minister Mia Mottley said, developed countries should not “hold on to a notional USD 100 bn that was promised 14 years ago as if that could solve the problem today,” considering that the financing needed today is just over USD 2 tn a year (watch, at minute 1:13:10).

And Al Jaber and Egypt agree: The “real value” of the USD 100 bn commitment has “eroded over time” given that the pledge was first made at COP15 in 2009, Al Jaber said (watch, at minute 49:00) while Egypt’s Ambassador to Germany Khaled Galal Abdelhamid — speaking on behalf of Egyptian Foreign Minister and COP27 President Sameh Shoukry — said the climate finance situation is “dismal” (watch, at minute 34:50).

Mottley called for slashing excess risk imposed on developing countries: “A joint partnership between the IMF and the World Bank that will guarantee long run exchange rates without the excess risk premium that financial markets charge,” Mottley said, particularly for companies in the Global South. This will allow the facilitation of private savings into financing the green transformation, she added (watch, at minute 1:14:00).

Amarenco acquires Jordan’s Spectrum: Irish independent power producer Amarenco Group fully acquired Jordan-based renewables developer Spectrum gaining 100% ownership of the company’s solar energy projects in the kingdom, according to a statement. The investment tickets and timeline for the upcoming projects were not disclosed in the statement.

The details: The Cork-based renewables company will rebrand the Jordanian company to ‘Amarenco Jordan’ as part of its plans to position the firm as its main Amarenco hub in the country, targeting the deployment of 200 MW worth of clean energy projects through the newly acquired subsidiary, the statement tells us.

Not the first Amarenco acquisition in MENA: Amarenco Group — which allocates over EUR 1 bn to solar energy developments yearly according to the statement — snatched up a 74% stake in Egypt-based renewables company SolarizEgypt’s portfolio in 2022 with the aim of co-developing 300 MW of solar power through to 2026.

Big expansion plans in Egypt and beyond: SolarizEgypt is looking to invest USD 100 mn in Egypt over the next three years, as the company looks to increase business volume and build up FX stocks, we reported in January. The Egyptian company, which installs and operates solar power plants around the country, could also expand its presence in Africa. The company is interested in entering Kenya, Tanzania, and South Africa.

Schneider Electric posted group revenues of EUR 8.5 bn during 1Q 2023 — a record high for the first quarter of a year, according to its earnings release (pdf). Its revenues were up 15.8% y-o-y organic and 12.3% on a reported basis, with all four regions where it operates contributing to the robust results, it said.

The breakdown: Its products segment — which represents 56% of 1Q revenues — rose 11% organic in the quarter. Energy management revenues were up 14.3% y-o-y to c. EUR 6.5 bn, with an organic growth of 18%. Its industrial automation services grew by 6.1% y-o-y in 1Q to EUR 2 bn with an organic growth of 10%, with both affected by the slow start to the year in China. “Supply chain shortages, while remaining a factor, showed some progressive improvement as expected, allowing good execution against the backlog,” it said.

Sustainability progress: Schneider Electric’s 1Q results for its Schneider Sustainability Impact (SSI) program cited good progress in helping clients slash their carbon footprint through low carbon emissions solutions. It also made progress in the Zero Carbon Project, which falls under efforts to reach net-zero emissions across its value chain by 2040. The company’s consolidated SSI for 1Q was 5.25 out of 10 as its eyes a full-year target of 6, it added.

Looking ahead: The French electrical equipment group upgraded its 2023 target on the back of the strong results, adjusting its EBITA growth to between 16-21% organic from a previous 12-16% organic, its earnings release showed. Revenue growth was adjusted to 10%-13% organic from a previous growth of 9% and 11% organic. “The global supply chain environment continues to ease, supporting the execution of our order backlog, while demand remains at high levels with a record backlog at the end of 1Q, despite deceleration in consumer-linked segments,” it said on the adjusted growth for the year.

EU okays Dutch plan to buy out emission-spewing farms: The European Commission has approved two plans by the Netherlands to buy out livestock farmers in a bid to slash nitrogen emissions, Bloomberg reports. The Dutch government is allocating EUR 1.47 bn to buy out farmers who voluntarily shut down their farms in accordance with the country’s efforts to slash nitrogen emissions by 2030 in a bid to calm farmers who have been protesting.

An agricultural powerhouse no more? The Netherlands is one of the world’s largest exporters of agricultural products with estimated exports of EUR 122.3 bn, according to the business information service. However, mns of livestock in the country’s farms generate alarming levels of nitrogen emissions from their waste, contributing around 41% of the country’s nitrogen emissions, the Financial Times reported last year, citing Dutch public health agency studies.

Not the first to upset the cows: France’s Danone said earlier this year that it is taking steps to lower its methane emissions, with possible solutions including a face mask that could trap gas produced by burping cows — the latest in a series of unintentionally comical measures put forward to reduce methane emissions from livestock. It has also considered altering cow diets to include algae that can prevent methane from forming in the stomach.

Germany and Egypt discuss cooperation in carbon market for agriculture sector: Egyptian Agriculture Minister El Sayed El Quseir met with a delegation from the German Chamber of Commerce, headed by its Executive Director Jan Noter, to discuss cooperation in carbon certificate mechanisms currently in the works, according to a statement. El Quseir stressed the importance of calculating the carbon footprint of agricultural products and how it can be translated into tradable carbon credits to serve as an additional source of income for farmers and other stakeholders in the sector.

ALSO WORTH KNOWING THIS MORNING-

• UAE’s Empower finished work on connecting its Dubai Maritime district cooling plant to Dubai’s iconic Anwa tower at a capacity of some 1.3k refrigeration tons. (Statement)

ADB steps up focus on climate funding: The Asian Development Bank (ADB) is setting up a funding guarantee facility that could unlock USD 15 bn to combat climate change, Bloomberg reports, citing statements by ADB President Masatsugu Asakawa. The bank’s facility, dubbed the Innovative Finance Facility for Climate Change in Asia and the Pacific (IF-CAP), could unlock bns in new loans through a USD 3 bn target in guarantees. “The region needs tns in investment to combat climate change,” Asakawa said. “To help reach that level, we need to maximize our capital in new ways — the IF-CAP will multiply ADB’s lending capacity through leverage,” he added.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Economies in the Association of Southeast Asian Nations will need some USD 3.7 tn between now and 2030 to alleviate the impact of climate change, reduce poverty, and boost economic growth. (Statement)
• China’s Trina Solar reported an 83.4% y-o-y revenue growth for 2022, raking in some USD 12.6 bn for the year on the back of increase in product and solution lines, infrastructure, and applications. (Statement)

A step forward in getting hydrogen planes off the ground? KLM Royal Dutch Airlines is joining forces with students from Delft University of Technology in the Netherlands to develop net-zero, hydrogen-powered aircraft as part of the University’s Aerodelft program, according to a statement. 50 tech students are working around the clock on developing a range of clean energy passenger planes in a bid to slash the aviation industry’s carbon footprint.

Scope of the partnership: KLM will join forces with the students to bring online Aerodelft’s Project Phoenix, which aims to develop a hydrogen-powered drone prototype in a bid to demonstrate the feasibility of hydrogen-electric aircraft before rolling out larger models, to be named Phoenix Full Scale, the statement says.

The drone’s specs: The mini aircraft features an all-electric motor fueled by liquid hydrogen and fuel cell technology with a 300 km range powered by a 380 gram capacity liquid hydrogen tank and 1.5 KW fuel cell power, Aerodelft notes on its website. The flight range exceeds three hours.

Beyond the prototype: The Phoenix Full Scale — for which the company has built the frame and is testing its hydrogen system — is set to take to the skies in 2025 if test flights for the prototype prove the potential of liquid hydrogen planes. The two-seater aircraft has a 10 meter wingspan, an endurance duration above two hours that translates to a flight range exceeding 400 kilometers, a 125 KW in fuel cell power, and a liquid hydrogen capacity of 10 kilograms, Aerodelft’s website says.

This is not the first we’ve heard about hydro-powered planes: Airbus is working on a hydrogen-powered engine to power up a modified A380 superjumbo. The French aviation company had previously worked on designs for liquid hydrogen fuel and combustion engines, but found that fuel cells alone may be able to power small commercial aircraft. Test flights are estimated for 2026 as part of the Airbus ZEROe initiative to launch a zero-emission aircraft by 2035.

Rolls Royce is also on a net zero flight hunt: The luxury car maker is currently testing the use of hydrogen to power jets, but it looks like they still have a long way to go — the low-carbon fuel requires four times as much space as the traditional aviation fuel used to fly the same distance.