Neom awards USD 2 bn rail link project and invests in zero-waste water solutions

Good morning, ladies and gents. The news cycle has picked up as the week comes to a close and we have plenty of climate diplomacy and renewables updates to dive into.

THE BIG CLIMATE STORIES- Saudi Arabia’s smart city Neom awarded a USD 2 bn rail project contract to Italy’s Webuild and Saudi-based leading contractor Shibh Al-Jazira Contracting, while over in Europe, the Petersberg Climate Dialogue in Berlin came to a close with a flurry of meetings between climate dignitaries.

^^ We have the details on these stories and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- The World Bank has a new president: The World Bank Group’s executive board yesterday formally ushered in US candidate Ajay Banga to a five-year presidency term after holding a four-hour interview with the candidate. Ex-Mastercard CEO Banga — the unopposed shoo-in for the position — will assume his new role on 2 June, a day after current chief David Malpass makes his exit.

The story made headlines yesterday: Associated Press | Reuters | The Washington Post | Bloomberg | The New York Times | Wall Street Journal

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WATCH THIS SPACE #1- Algeria plays both sides of the coin for energy investments: Europe should support investments in both natgas and renewables simultaneously to ensure a comprehensive and fair shift to green energy, Algerian daily El Shorouk reports, citing Algerian Energy Minister Mohammed Arkab’s statements at a EU-sponsored forum. Arkab said achieving climate targets and slashing carbon emissions should involve the use of natgas, which he claims is a low-carbon energy source. “It’s important to point out the critical role played by natural gas in achieving our joint climate objectives, where natural gas allows slashing carbon emissions to a large extent in electricity generation and other sectors,” he said.

And the EU seems to agree: The EU is looking to source a chunk of its energy needs from Algeria, whether in the form of hydrogen, solar power, or natural gas imports, Attaqa quotes EU Ambassador to Algeria Thomas Eckert as saying. The EU will continue to support Algeria as it looks to up its green hydrogen and solar generation, he said, adding Algeria’s target to produce 15 GW of clean energy — a goal for which state-owned Sonelgaz is tapped — will open the doors to further partnerships.

REMEMBER- Algeria is earmarking bns for its green hydrogen sector: Algeria said back in March it will allocate between USD 20-25 bn to boost its green hydrogen production capacity.

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WATCH THIS SPACE #2- Top fund managers are using green funds to invest in fossil fuel: Green-branded investment funds are being used by some of the world’s top fund managers to invest in fossil fuel companies, the Guardian writes, citing research by UK think tank Common Wealth. Asset managers — at outfits including Blackrock, State Street, and the UK’s Legal and General — channeled nearly USD 1.5 bn in sustainability-linked funding to subscribe to oil, gas, and coal bonds, according to the news outlet..

REMEMBER- Sustainability-linked bonds might not be that great either: The majority of sustainability-linked bonds are tied to weak, irrelevant, or already achieved climate targets. If firms fail to meet the targets they set out for themselves, they repay the capital they amassed from investors with financial penalties on top. Companies get cheaper financing and a green reputation without holding up their end of the bargain.

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WATCH THIS SPACE #3- TotalEnergies takes Greenpeace to court: French oil company TotalEnergies is suing environmental group Greenpeace and consulting firm Factor-X over a joint report which made claims Total misrepresented its carbon output for 2019, Reuters reports. Total says the report — published in November — contains “false and misleading information,” and called for a judicial ruling to stop the publication’s circulation or face a EUR 2k penalty per day. An initial procedural hearing of the case is scheduled for 7 September at the Paris judicial court, the newswire notes.

WATCH THIS SPACE #4- A resistance by the world’s top coal consumers? India — backed by China and South Africa — is trying to push a proposal within the G20 group to allow countries to opt for a roadmap to slash carbon emissions instead of a deadline to end fossil fuel dependence, Reuters reports, citing three Indian government officials. One of the sources said India, which currently has the G20 presidency, wants to propose the phrase “multiple energy pathways” in a communique at a summit in September. The proposal would allow countries to choose resources, even coal, while working on a plan to reach net zero emissions.

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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). The event will take place at the Four Seasons, Nile Plaza.

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.

ON THE AGENDA- We have seven panels where we discuss the steps these leaders and companies are taking to pull in FDI and to make their business export-driven. There will be several “lessons-learned” panels that include an Egyptian product focused one that looks at white goods, consumer electronics, fertilizers and garments. Another intends to extend the steps taken to create an export and FDI strategy through listening to the advice of other c-suite executives who have successfully made their business move in that direction. More panels include how to identify and pull in the right foreign partner, how to become part of a multinational’s supply chain, how industrial clusters can offer a way for SMEs to be part of our export economy and what industries of tomorrow we can leapfrog into. You can check out the full agenda here.

Some of the biggest names in business and finance are on board: 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

Lead partners: DB Schenker | DP World | East Port Said Development | IDG | IFC | Madinat Masr

Event partners: Beyti | Concrete | Global Corp | Grant Thornton | Hassan Allam Utilities | Royal Ceramica

WANT TO BECOME A COMMERCIAL PARTNER? Ping a note to Moustafa, our head of commercial, here.

HAVEN’T REQUESTED AN INVITE YET? If you’re a C-suite exec, business owner, DFI staff, export executive, investor or banker, please fill out the form here to signal your interest, letting us know your name, title and where you work.

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CIRCLE YOUR CALENDAR-

Turkey is hosting the International 100% Renewable Energy Conference today through Saturday 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.

Rail link between Neom’s Oxagon and The Line is a go: Saudi Arabia’s smart city Neom has awarded a USD 2 bn contract for a rail project linking its floating industrial complex Oxagon to renewable energy-powered The Line city, Arab News reports. The rail project was awarded to a joint venture of Italy's largest construction company Webuild and Saudi-based leading contractor Shibh Al-Jazira Contracting (Sajco).

What we know: The rail project will extend south from The Line to Neom City station, passing through Neom Bay Mansions and Neom Bay Airport, all the way to Oxagon, according to the news outlet. It will also see a 75-km railway line under an infrastructure corridor which will also include seven roads, nine rail underpasses, 14 viaducts, and earthworks. The project will also include a freight line and other related infrastructure maintenance facilities.

But first, a recap: Neom formally launched Oxagon as its integrated net-zero port and logistics hub powered entirely by clean energy. It is set to be home to several industries powered fully by renewables, including sustainable energy, autonomous mobility, water innovation, sustainable food production, health and well-being, technology, and digital manufacturing. Neom revealed plans last year for its landmark 170 km-long urban development The Line, based on a vision for “an environment [devoid of] roads, cars and emissions.”

And that’s not all, folks: Neom has reportedly asked selected contractors to submit proposals by 12 June for the building of tunnels as a railway link between the Neom Connector and high-speed rail line The Spine, the news outlet reports. They were also requested to submit bids for The Line’s cut-and-cover tunnel segments.

ALSO FROM NEOM- The megacity’s energy and water company Enowa signed a master agreement to potentially invest up to USD 6 mn to back necessary zero-waste water solutions developed by Penn State, according to a statement. The funding will be provided for up to 15 projects with five on water declination, rare earth minerals, and metals recovery from water and brine, and lowering water line strain and water loss. The zero-waste water research will be carried out by Penn State and tested later in the Enowa Water Innovation Center, the statement added.

Petersberg Climate Dialogue wraps: A mixed bag of topics were discussed in closed ministerial meetings with COP28 President-Designate Sultan Al Jaber on the final day of the Petersberg Climate Dialogue in Berlin including financial reform, the upcoming Global Stocktake, and the COP28 agenda. Other major themes tackled by Al Jaber include steps to realize the Loss and Damage Fund, ways to facilitate adaptation finance, and cooperation with countries to speed up the energy transition.

One-on-one time with the US and Germany: Accelerating global cooperation across all pillars of climate action in the lead-up to COP28 in November was a key topic between US climate envoy John Kerry and Al Jaber, according to a statement. German Climate Envoy Jennifer Morgan brought forward the conversation on COP28’s goals on adaptation finance, progress on delivering on climate finance commitments, upping renewable energy capacities, and putting the Loss and Damage Fund into motion.

REMEMBER- Mitigation is the most important factor in the climate fight: “If we do not do more on mitigation, whatever we do on finance, on adaptation, on lost and damage, will fall on short on what we need,” European Commission Executive Vice-President for the European Green Deal Frans Timmermans said in his speech in Berlin yesterday.

And tns are needed: While Timmermans made it clear that more needs to be done on mitigation and reducing emissions, he emphasized that the only way forward is mobilizing private finance. “We need to show private investors that it pays off to invest in the energy transition and circular economy,” Timmermans said. In that regard, Timmermans spoke with Al Jaber on the EU’s leadership role in enhancing global climate resilience and turning promises into action.

Opening speeches also prioritized private finance: “Public, multilateral and private sectors must be mobilized in new and innovative ways on the critical issue of climate finance,” Al Jaber said according to the Financial Times. “Public funds will not suffice on their own,” Baerbock added, saying Germany is working with the US “to make climate finance a firm element of the business model of the World Bank” (watch, minute 18:43).

Barbados doubled down on financing: “The world is running out of time to fix the international financial system that is broken, outdated, and downright unfair but which is absolutely necessary for us to successfully meet and manage the climate crisis,” Prime Minister of Barbados Mia Mottley said (watch, at minute 1:19:40).

And put forth some ideas: A tax on oil and gas company revenues, plus a USD 100-a-ton carbon tax on shipping, and stamp duty on financial transactions, are among three “non-complicated” ways that Mottley suggested for raising finance to help developing countries cope with climate change (watch, minute 1:17:18).

ALSO- COP28 will be the first to dedicate a full day to health: Al Jaber gave a glimpse into the agenda of COP28 in his opening speech on Tuesday, announcing that the climate conference will be “the first COP to dedicate a day to health and the first to host a health and climate ministerial … to broaden our definition of adaptation” (watch, at minute 55:46).

Egypt agrees to move forward with Scatec interconnector project: Egypt’s Cabinet approved yesterday the signing of an agreement with Norwegian renewables developer Scatec to conduct a feasibility study for their planned 3 GW electricity interconnector, which would enable the transport of clean energy from Egypt to Europe, according to a statement.

What we already know: Scatec’s planned electricity link — first proposed in February in a meeting with Egyptian Prime Minister Moustafa Madbouly — would transmit some 3 GW of renewable power generated in Egypt to Europe through Italy.

Scatec are already investing in Egypt’s renewables: The company is planning to sign a joint development agreement for a USD 5.5 bn green ammonia plant in Ain Sokhna with Egyptian Petrochemicals Holding Company (ECHEM) and state fertilizer company Mopco and began commissioning the first phase of their 100 MW green hydrogen plant in Egypt’s Ain Sokhna with SFE, OCI-Adnoc joint venture Fertiglobe, and Orascom Construction back last November

Egypt has more interconnectors with Europe in the pipeline: Egypt has been preparing to link its electricity grids with Greece and Cyprus through a subsea cable as part of the USD 4 bn, 2 GW EuroAfrica Interconnector project since 2018, while two direct Egypt-Greece links — the 3 GW Greece-Egypt Interconnector (GREGY) and the 2 GW Greece–Africa Power Interconnector (GAP) — are both being studied. Egypt and Italy are also discussing a separate 3 GW link and could sign MoUs for the project in June. Egypt’s grid is currently linked with Jordan, Palestine, Libya, and most recently Sudan, and will link up with Saudi via a 3 GW interconnection in 2025, which will also accommodate the exchange of renewable energy.

Egypt and India discuss potential renewables partnership: Egypt’s Electricity and Renewable Energy Minister Mohamed Shaker sat down yesterday with Indian Ambassador Ajit Gupte and a delegation from Indian multinational Larsen & Toubro (L&T) to explore potential cooperation in Egypt’s renewable energy sector as part of the country’s target to have a 42% share of renewable energy by 2035, according to a statement.

And waste management cooperation with Greece is in play: Egypt’s Environment Minister Yasmine Fouad met with a delegation from the Egypt-Greece Shareholder Alliance yesterday to discuss the environmental impact of maritime waste in the Suez Canal as part of a joint maritime waste management program, according to a statement. The program will provide potential investment worth up to nearly USD 150 mn for the country’s Suez Canal Authority once operational.

REMEMBER- Egypt and Greece’s V Group are already working on waste treatment: Egypt’s Suez Canal Economic Zone (SCZone) and Greek waste management company Antipollution — a subsidiary of marine services company V Group — agreed to form a joint stock company named Antipollution Egypt to establish of a waste treatment plant in Egypt’s SCZone in March. The waste treatment facility will process fluid and soluble waste collected from vessels transiting through the Suez Canal to be repurposed as part of Egypt’s efforts to boost its blue economy.

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ACROSS THE POND- UAE, US explore cooperation in clean energy: The UAE’s Minister of State for Foreign Trade Thani Al Zeyoudi met with US Commerce Secretary Gina Raimondo and Assistant Secretary of Commerce Arun Venkatarman yesterday on the sidelines of the SelectUSA Investment Summit in Maryland to discuss potential partnerships in clean energy, food and water security, and tech, Wam reports.

REFRESHER- The UAE and the US agreed they would earmark USD 20 bn to fund 15 GW of new clean energy projects in the US by 2035 back in January, marking the first wave of investments under the USD 100 bn partnership to accelerate transition to clean energy (PACE) announced by the two countries last November.

Masdar CEO receives National Order of Merit from France: French President Emmanuel Macron awarded Masdar’s CEO Mohamed Jameel Al Ramahi for his role in spearheading clean investments across the globe and boosting cooperation between the UAE and France, according to a company tweet. The award was presented to Al Ramahi by the French Ambassador to the UAE Nicolas Niemtchinow. The National Order of Merit award recognizes distinguished civil achievements from individuals across all sectors.

Saving the planet with whale poop: Environmentalists are weighing the idea of using whale feces as critical carbon sinks, although this would be no easy task, the Financial Times writes. Whale poop — which is described by FT as “environmental gold dust” — acts as a powerful fertilizer for the oceans’ phytoplankton, which has massive carbon capture potential. The microalgae produces more than half of the world’s oxygen and removes as much carbon dioxide as four Amazon rainforests.

There’s a catch: Placing a USD value on a great whale and its services means quantifying claims for its carbon impact beforehand, the FT writes. This could be costly, given that stakeholders behind the Whale Carbon Plus Project estimate the rough value of a great whale at USD 2.5 mn to USD 3 mn over a 60-year lifespan. The project would also mean allowing for assigning ownership of the marine mammals, which could be tricky given that they’re migratory creatures. Also, any resulting financial product would need to be verified and audited independently.

Still worth a try? If related stakeholders, including governments, economists, and environmentalists can get on the same page “there’s this new pie, this new asset class that didn’t exist before,” Whale Carbon Plus Project partner Connel Fullenkamp tells the FT.

Progress in Omani copper gold project: Oman’s copper mining firm Al Hadeetha Resources has secured USD 15 mn in additional financing from its current project finance lender Sohar International Bank for the completion and commissioning of its Al Washi-hi Majaza copper-gold project, Oman Daily Observer reports, citing statements from the company. Around USD 8 mn of the additional financing facility will be used by the company — a JV between Oman’s Al Hadeetha Investment and Australian mining firm Alara Resources — to procure spare parts, reagents, lubricants, and other materials needed to commission the plant. The remainder of funds will be used for working capital, it added. The commissioning of the 1 mn ton-per-annum (MTPA) copper concentration plant is set for September of this year.

REMEMBER- Copper, cobalt, nickel, and lithium are critical minerals for EV and battery storage production, which are expected to see a massive jump in demand in the coming years as countries roll out their plans for energy transition.

And there’s increased investments in minerals mining regionally: Last month Luxembourg-headquartered Eurasian Resources Group said it is looking to build up a portfolio of energy transition minerals by investing in mining activities in MENA and the GCC.

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Yemen’s solar-powered wells move forward: Yemen has launched the second phase of a renewable energy project to implement 35 solar-powered agricultural irrigation systems in several of its governorates, Spa reports. Backed by the Saudi Development and Reconstruction Program for Yemen, the Arab Gulf Program for Development, and the Selah Foundation for Development, the project will fit irrigation wells with solar power systems in the governorates of Hadramout, Abyan, and Lahij which have recently suffered from drought.

Sonelgaz progresses on interconnector project: Algerian state power utility Sonelgaz’s subsidiary GRTE has signed turnkey contracts with local engineering and construction firms to link the country’s southern electricity grid with the national grid, according to a statement. The project, which runs through several regions, includes the construction of three high-voltage substations, several transformer substations and a transmission network to boost power supply and integrate renewable energy, according to the statement.

Australia’s Albemarle is investing big in lithium processing: US lithium giant Albemarle plans to spend between USD 1.25 bn and USD 1.5 bn to double its lithium hydroxide processing operations in Western Australia, Bloomberg reports, citing a company statement. The plan — which could raise its lithium hydroxide production by 50k tons annually — involves Albemarle building two additional processing trains in its Kemerton plant in Western Australia. The new trains will process spodumene ore from the Greenbushes mine, which is a top global source of lithium. When operating at full capacity, the facility would process up to 100k tons of lithium hydroxide annually.

REMEMBER- Battery grade lithium hydroxide is a key component for the energy transition and essential for EV battery manufacturing. Lithium hydroxide is better suited than lithium carbonate for the next generation of EV batteries, according to a 2022 Irena report (pdf).

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Chinese electric vehicle giant BYD’s launch of its Seagull electric hatchback is set to boost the low end of the global EV market. (Bloomberg)
• German Chancellor Olaf Scholz may explore potential cooperation with Kenya on green hydrogen during his East Africa tour this week. Scholz is scheduled to visit Africa’s largest geothermal facility at Lake Naivasha on Saturday. (Reuters)
• In a US first, New York passed in-state legislation yesterday banning the use of fossil fuels for most new buildings. (CNN)

Bronze Age skeletons in the UAE may harbor climate change clues: Archaeologists from the UAE’s Ras Al Khaimah Department of Antiquities and Museums are partnering with researchers from US-based Quinnipiac University and the University of South Alabama for an archaeological study aimed at examining the impacts of climate change on human biology, Wam reports.

What are they doing exactly? The students are studying the bio-archaeological potential of ancient skeletons found in Ras Al Khaimah in an effort to map out the effects of a historic drought some 4k years ago to understand how climate change affected communities in southeast-Arabia. The study is focusing particularly on human settlements dwelling in the Umm Al Nur and Wadi regions of the UAE and Oman, Wam notes.

Why Ras Al Khaimah? The region is particularly fertile ground for the study of the impacts of climate change given the abundance of large communal tombs, which will enable the researchers to examine the effects of a prolonged drought — nearly a century long in this case, Ullinger is quoted by Wam as saying. His team has already gathered a wealth of intel to be examined, he notes, adding that they have seen “bones from the smallest babies to older individuals,” enabling them to study climate-induced changes in health over time and potentially pinpoint correlations between climate change, infant mortality, and a host of diseases.