Ma’aden moves forward with minority acquisition in US minerals firm Ivanhoe Electric

Good morning, wonderful people. It’s a quiet morning on the regional climate news front, with a couple of stories to dig into.

THE BIG CLIMATE STORY- Saudi Arabia’s state-owned mining company Ma’aden has moved forward with its 9.9% acquisition of US mineral development company Ivanhoe Electric Inc. by signing a conditional common shares subscription agreement and Egypt’s Al Baraka Bank will receive a USD 30 mn loan from the Islamic Corporation for the Development of the Private Sector to finance green projects.

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

THE BIG CLIMATE STORY OUTSIDE THE REGION- There is not a single story dominating the international headlines this morning, but France is set to host a meeting today aimed at rallying support for nuclear energy. The EU country will gather 14 other EU state representatives in Paris today as it looks to count nuclear energy toward the EU’s clean energy sources. A document prepared by the French government seen by Reuters — which may yet undergo changes after today’s meeting — aims to hike the bloc’s nuclear energy generation capacity from 100 GW to 150 GW by 2050 via the installation of 30-45 micro and large nuclear reactors. The story was also picked up in Bloomberg.

REMEMBER- EU countries remain divided on the role of nuclear energy. Debate over whether nuclear-derived hydrogen should be allowed to count towards the EU’s renewable energy generation targets has delayed the finalizing of a text outlining the EU’s diplomatic priorities ahead of COP28 — which was supposed to be agreed on by member countries in February and has been delayed with no set finalization date. France has been for months attempting to rally support for the inclusion of nuclear power as a low carbon energy source in EU policies, seeking a nuclear alliance to counter German, Spanish, and other EU opposition to nuclear’s inclusion.

---

WATCH THIS SPACE- Europe’s renewable energy expansion could make newly planned LNG infrastructure obsolete past 2030, Bloomberg reports. Europe is ramping up plans to build import terminals for LNG after Russia cut down its pipeline supplies, and some experts suggest bns of EUR in infrastructure could become “stranded assets” as the continent meets its energy transition targets. “Some of the investments in LNG import infrastructure were made by markets based on the assumption that there’s always going to be demand somewhere in Europe,” an industry expert specializing in natgas tells Bloomberg.

The numbers: Europe’s LNG import capacity is expected to rise about 50% over this decade, the Institute for Energy Economics and Financial Analysis (IEEFA) said in a report published in March and cited by Bloomberg. However, some forecasts reveal that LNG demand is unlikely to increase, and could even fall, therefore leaving the EU with as much as 250 bn cubic meters of unused capacity by 2030, IEEFA concludes.

---

WATCH THIS SPACE- The EU will source 42.5% of its energy from renewables by 2030, Reuters reports, referencing a finalized version of the new law it has seen. The European Union’s legislation — set to be reviewed by EU diplomats tomorrow — confirms a political agreement agreed upon in March laying out targets to increase the bloc’s climate action targets from a 32% of renewables capacity by the end of the decade to a new binding commitment of a 42.5% share, and aims to have EU member states expand their individual renewables capacity to 45% of their total energy mix by 2030.

---

DATA POINT- Dewa is at the top of its carbons emissions slashing game: State-owned Dubai Electricity and Water Authority (Dewa) has slashed carbon dioxide emissions by 218.3k tons since the launch of its High-Water Usage Alert service in 2019, Wam reports. The service sends instant notifications to users if its smart meter system detects unusual consumption rates. The service helped Dewa detect 1.3 mn leaks in water connections, 26k defects, and 13k cases of increased load.

Get Enterprise Climate

***

YOU’RE READING ENTERPRISE CLIMATE, the essential MENA publication for senior execs who care about the world’s most important industry. We’re out Monday through Thursday by 5am Cairo / 5am Riyadh / 6am UAE.

EXPLORE MORE OF ENTERPRISE ON THE WEB — tap or click here to read EnterpriseAM, EnterprisePM, and The Weekend Edition on our powerful new website packed with reader-friendly features.

Were you forwarded this email? Get your own subscription without charge here or reach out to us on climate@enterprisemea.com with comments, suggestions and story tips.
***

CIRCLE YOUR CALENDAR-

Japan will host the G7 Hiroshima Summit from 19 May to 21 May in Hiroshima. One of the key topics addressed at the summit will be ensuring energy security with the goal of achieving net zero by 2050 based on the Paris Agreement.

Oman will host the Power and Energy Conference from 22 May to 25 May in Muscat. The event will bring together local and global industry leaders to discuss global energy market policy updates, future demand and growth projections in the sector, integration and power grid obstacles, and growth potential associated with renewables and EV deployments.

Germany will host the second meeting of the COP27 Transitional Committee from 25 May to 27 of May in Bonn. The meeting will build on the loss and damage fund established during COP27 with the aim of establishing institutional mechanisms and governance structures for financing, and will bring together a host of international financial institutions to discuss pathways to increasing funding capacity for climate vulnerable countries.

The UAE will host the Electric Vehicle Innovation Summit from 29 May to 31 May in Abu Dhabi. The conference will bring together state representatives, industry players from the EV sector, as well as engineers and researchers to discuss policy trends and tech innovations in the industry and provide attendees with networking opportunities across value chains.

Qatar will host the Carbon Capture, Utilisation and Storage (CCUS) Forum from 29 May to 31 May in Lusail City. The event aims to spotlight MENA’s CCUS regulations and policies, map out paths and business models that would bring down CCUS project costs, promote regional and international cooperation to advance the international carbon capture sector, and discuss the role CCUS will play in helping Gulf countries meet their net zero targets.

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

Ma’aden inks agreement terms with Ivanhoe: Saudi Arabian state-owned mining company Ma’aden has signed a conditional common shares subscription agreement with US mineral development company Ivanhoe Electric Inc. (IE) to acquire a 9.9% share of the company, according to a Tadawul filing. Completion of the agreement will also see Ma’aden establish a JV with IE for mining exploration in Saudi Arabia. The transaction is set to be completed in 3Q 2023, according to the statement.

The details: Ma’aden — which obtained its 9.9% stake in IE for USD 126 mn — and IE will establish a 50-50 JV to explore and develop mining projects in Saudi Arabia, giving Ma’aden access to proprietary technology that will enable it to detect minerals like copper, nickel, gold, and silver.

REMEMBER- Saudi Arabia is looking to unlock an estimated USD 1.3 tn in mineral reserves and aims to become a global hub for the “green metals” needed in the energy transition, Saudi Energy Minister Prince Abdulaziz bin Salman said during the Future Minerals Forum held in Riyadh last January. The kingdom says it has large untapped reserves of metals — including copper, zinc, phosphate, and gold — and it plans to attract some USD 32 bn in investments in its mining and mineral sector and award more than a dozen mining exploration licenses to international investors, Saudi Mining Minister Bandar Al Khorayef said in November.

Fresh financing for Al Baraka Bank from the ICD: Egypt’s Al Baraka Bank is set to receive a USD 30 mn loan from the Islamic Corporation for the Development of the Private Sector (ICD), according to a statement. The funding accounts for a first tranche of a five-year sharia-compliant finance from the ICD, which is part of the Islamic Development Bank (IsDB) group.

Why now? The loan will be used to finance green and sustainable projects for private sector companies, Al Borsa cites Al Baraka Bank CEO Hazem Hegazy as saying. The step is part of the bank’s plan to expand in financing sustainable projects that cut carbon emissions, he said, adding that the bank currently owns a vast portfolio in green and sustainable financing including renewables and waste management.

IsDB is no stranger to funding sustainability: The IsDB said in April that it will provide c. USD 403 mn for three projects in Egypt, Kyrgyzstan, and Tajikistan under efforts to back socio-economic development and promote sustainable energy and transport. Egypt is receiving the biggest chunk of the funds, with the bank set to provide EUR 318 mn in financing for its 660-km first phase of the Sokhna-Alexandria high-speed rail line.

One-off transactions boost Taqa Group’s 1Q net income: The UAE’s Taqa Group (Taqa) reported a 480% y-o-y rise in net income in 1Q 2023 to AED 11.6 bn, driven by a one-off gain from acquiring a 5% stake in Adnoc Gas, its earnings release (pdf) showed. Revenues were up by 6% y-o-y during the first three months of the year to AED 13.1 bn.

New UAE income tax capped Taqa’s gain from acquisition: The 5% acquisition in Adnoc Gas was partially offset by a one-off AED 1.2 bn deferred tax liability — part of a new UAE corporate income tax introduced 1 January 2024. Without the new share purchase and deferred tax liability, Taqa’s net income would stand at AED 1.9 bn — in line with last year’s figures.

Drivers behind revenue gain: Taqa’s increase in revenues was primarily due to “higher pass-through bulk supply tariffs,” or in other words, the price that the company sets for selling its upstream bulk supplies —such as electricity or gas— to downstream distribution companies.

Green highlights from 1Q 2023: Taqa saw an 8% reduction in greenhouse gas emissions in 2022, which puts it “firmly on track to achieve its 2030 targets,” according to the statement. Taqa and Adnoc Distribution partnered in January to establish a mobility joint venture, E2GO, to build and operate EV charging infrastructure in Abu Dhabi. The company also recently raised an aggregate USD 1.5 bn in its dual-tranche green bond issuance last month, which was 10x oversubscribed.

Hady Stephan (LinkedIn) has been appointed as Schneider Electric’s VP of Power Systems for the Gulf region, according to a statement. Stephan has been with the French electrical group for over a decade, formerly serving as VP for Energies and Chemicals for the Middle East and leading the Levant cluster to help expand the company’s footprint in Iraq. He will now be tasked with commercial and operational activities in key industries in the region — including energy and chemicals, power and grid, and transportation — and pushing growth in several countries in the Middle East and Africa.

Standard Chartered is warning South Africa that extending the use of coal-powered plants may drive investors away, Bloomberg reports, citing comments by Standard Chartered CEO for South Africa Kweku Bedu-Addo to Business Day. The bank warned the South African government that investors will not want to be stuck with “stranded assets” as the world transitions to renewables, and sticking to coal will also make it difficult to use sovereign bond sales to fund investments in state power utility company Eskom. The bank has criticized the country’s plans to extend the operational life-cycle of coal plants in a bid to resolve the ongoing energy crisis. South Africa had set out a carbon neutrality target for 2050, but Electricity Minister Kgosientsho Ramokgopa says the country now has to make a choice on whether to prioritize “environmental needs” or the collapse of its economy due to the considerable increase in the rationing of power.

REFRESHER- South Africa has been suffering a power crisis for years, and outages are expected to continue in the country through to 2025, former CEO of state power company Eskom Andre De Ruyter said in January. The power crisis saw households go without electricity for up to 10 hours a day earlier this year. Regulatory constraints impeding private sector renewable energy provision are among the key reasons for the country’s power deficit, along with aging coal-based infrastructure, corruption, and criminal activity. Eskom consumes some 90 metric tons of coal yearly to generate electricity, according to South Africa’s Energy Ministry.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Climate change deniers are increasingly hurling “abuse” at scientists on Twitter since Elon Musk’s takeover of the popular social media platform last year. (The Guardian)
• Listed firms worldwide will exceed their carbon budget two months sooner than an earlier estimate of December 2026, even though the number of global companies with set climate targets has risen by 8%. (Reuters)

UAE partners with Indonesia on waste management infrastructure: Indonesia’s Nusantara Capital Authority (OIKN) and UAE-based waste management company Envirol signed a nondisclosure agreement (NDA) for the development of waste management facilities in Indonesia’s future capital Nusantara, the Indonesian news agency Antara reports. Under the agreement, OIKN and Envirol will set up fat, oil, and grease (FOG) waste management plants to support efforts to make the new capital a smart and green city.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Egyptian President Abdelfattah Al Sisi held a meeting with a delegation from Norway’s Scatec for a progress report on renewable energy projects in Egypt including a 100 MW electrolyzer plant in Ain Sokhna and a green methanol production facility. The Egyptian Electricity Transmission Company signed an MoU with Scatec to begin studying the 3 GW electrical interconnection project for the export of renewable energy to Europe. (Statement | Statement)
• The UAE’s Ajman Chamber of Commerce and Industry is looking to increase cooperation with Chinese companies in technology and green energy, including in waste-to-energy projects. (Statement)
• Dubai’s Roads and Transport Authority has begun its trial operations for its first electric and autonomous Abra vehicle. The new EV will have the capacity to carry eight passengers. (Wam)
• The UAE’s Sharjah waste-to-energy facility has helped offset 150k tons of carbon dioxide emissions since the start of its operations last year by processing over 100k tons of waste while generating 53.3k MW of energy. (Twitter)

Nairobi-headquartered asset financing platform M-Kopa has raised USD 257 mn in debt and equity financing from Standard Bank and the IFC among other players, the Financial Times reports. M-Kopa provides underbanked African customers access to credit as well as goods including solar panels via digital micropayments.

Who’s paying in? Japanese trading and investment company Sumitomo Corporation led the growth equity component, investing USD 36.5 mn of the USD 55 mn the company raised in equity during its latest financing round. Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude contributed the remainder of the equity financing through undisclosed individual investments. Standard Bank provided USD 100 mn in green loans and the IFC provided USD 65 mn in credit lines. Lion Head’s Group, the UK government’s development finance institution British International Investment, and Dutch development bank FMO also contributed to the debt financing.

Where’s the money going? The company — founded in 2011 with a total of USD 245 in equity financing to date — currently operates in Kenya, Uganda, Ghana, and Nigeria, according to Tech Crunch. The company will channel the capital toward retiring existing debt and acquiring upwards of 100k customers on a monthly basis as part of its target to double its 3 mn user base, M-Kopa co-founder and CEO Jesse Moore told TechCrunch.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Proxy adviser Institutional Shareholder Services is recommending that investors in TotalEnergies back a shareholder resolution filed by Follow This urging the oil company to make more substantial emission cuts this decade. (Financial Times)