Morocco’s OCP plans USD 7 bn in investments for green ammonia plant

Good morning, friends. We have a light, brisk issue for you this morning as we inch closer to the weekend.

THE BIG CLIMATE STORY- Moroccan state-owned fertilizer and phosphate giant OCP Group plans to invest USD 7 bn in an ammonia plant using green hydrogen produced from renewable energy.

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

THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single climate story dominating international headlines this morning, but EU countries’ environment ministers have reached an agreement on the landmark nature law after weeks of fierce political pushback, Reuters reports. The ministers backed the bill after introducing tweaks and reaching consensus over additional EU funding to restore damaged environments. One of the changes is replacing a clause requiring that the condition of certain habitats not be worsened, with a goal to “endeavor to put in place necessary measures” to avoid declining conditions. Another one would undermine targets to bring back drained peatlands upon the request of countries like Ireland, where peat is used as fuel and dried bogs are harvested. The EU parliament’s majority group, the European People’s Party (EPP), has been leading a campaign against the law in the past few weeks, arguing that the proposal be scrapped on grounds that it would undermine food security. The final bill should still be approved by EU countries and the European Parliament.

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WATCH THIS SPACE #1- Oman’s state-owned Hydrom is expected to ink a number of new contracts for green hydrogen blocks today, Zawya reports. Hydrom signed three agreements earlier this month granting the first three blocks of land for planned green hydrogen plants worth USD 20 bn as part of its Phase A Round 1 public auction process. One of the agreements included the USD 6.7 bn awarded to a consortium led by South Korea’s steelmaking company Posco Group.

WATCH THIS SPACE #2- We’re hearing some movement on Acme’s green hydrogen plant in the SCZone: A group consisting of Egypt’s Suez Canal Economic Zone (SCZone), Orascom, and El Sewedy met with India’s Acme Group in New Delhi where they agreed to begin construction soon on a USD 12 bn green hydrogen plant in the SCZone, according to a statement. The plant — announced back in August 2022 — will span 4.5 mn sqm and have an expected initial annual production capacity of 100k tons during the first phase. The plant’s generational capacity will increase to 2.1 mn tons of green hydrogen when fully operational.

ALSO- India’s Jindal Steel Power is exploring the potential of setting up a green steel production plant in the SCZone, according to the statement. The 5-7 mn sqm steel manufacturing industrial complex would have an annual production capacity of 5 mn tons geared towards export to African and European markets.

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WATCH THIS SPACE #3- UN adopts world’s first international marine conservation treaty: After over 15 years of talks and five UN-led negotiations, the UN adopted on Monday the High Seas Treaty, the world’s first agreement to protect biodiversity in international waters, Reuters reports. The agreement, which will be available for signature starting 20 September, will come into effect only after it is ratified by 60 countries, the newswire notes.

REMEMBER- Over 100 countries struck the landmark agreement back in March, agreeing to protect at least 30% of international waters by 2030. The UN High Seas Treaty reportedly took over 36 hours of negotiations before being hammered out. The treaty provides a framework for the establishment and management of marine protected regions and sets out environmental requirements for deep sea exploration, building on the UN’s Law of the Sea convention. 11 mn sqkm of ocean would need to be protected annually between now and 2030 to realize the treaty’s target, according to Greenpeace.

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WATCH THIS SPACE #4- Malaysia's MISC Group to develop first ammonia-powered engine for deep sea vessels: Malaysian logistics company MISC Group has signed an agreement to develop the world’s first ammonia engines for deep sea ships, Reuters reports, citing a company statement. MISC-owned AET and Akademi Laut Malaysia (ALAM) signed the agreement with Switzerland-based diesel and low-gas engine manufacturer Winterthur Gas & Diesel (WinGD). ALAM, which says the new engines will help decarbonize the global shipping industry, also signed an agreement with shipping classification society and maritime industry advisor DNV to upskill workers in the maritime sector on low carbon and net zero technologies, according to the newswire.

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CIRCLE YOUR CALENDAR-

France will host The Summit for a New Global Financial Pact tomorrow and Friday in Paris. The two-day summit will bring together heads of states and heads of multilateral development banks, international organizations, the private sector and international NGOs to shape a new finance “toolbox” and “pave the way towards a more balanced financial partnership between the north and south.” It will also see new agreements in a bid to relieve debt distress and allow countries to access additional financing to invest in sustainable development and slash emissions.

Thailand will host the second workshop on addressing loss and damage from 15-16 July in Bangkok. The workshop will see discussions on pathways to increasing funding for climate-induced loss and damage. The workshop is being held in preparation for the third meeting of the COP27 Transitional Committee in August. The committee is tasked with operationalizing the Loss and Damage Fund, to be approved during the fourth transitional meeting in October.

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

Big plans by Morocco’s OCP: Moroccan state-owned fertilizer and phosphate giant OCP Group plans to invest USD 7 bn in an ammonia plant using green hydrogen produced from renewable energy, company representatives told Reuters. The plan comes under efforts by the fertilizers giant to boost output and shift to renewable energy.

What does OCP have up its sleeves? OCP said it plans to build an ammonia plant with a production capacity of 200k tons of ammonia annually in southern Morocco’s Tarfaya. Its production capacity would later grow fivefold to reach 1 mn tons by 2027, and increase further to reach 3 mn tons over the next decade. The state-owned company will use hydrogen produced by solar and wind-powered electrolysis under a USD 13 bn strategy announced late last year for a switch to renewables.

And there’s more in the pipeline: OCP said it will fully rely on desalinated water for industrial operations by 2027, with plans to launch tenders in early 2024 to boost desalination capacity at its Safi and Jorf Lasfar projects. Its planned project in Tarfaya includes a renewable-energy powered desalination plant with a production capacity of 60 mn cubic meters a year to supply the industrial complexes.

OCP has been on a renewables kick: The IFC approved a green loan worth EUR 100 mn to Moroccan state-owned fertilizer and phosphate giant OCP Group earlier this year to help finance the development of four solar plants yielding 202 MW.

REMEMBER- Morocco has been pushing with efforts to position itself as a clean energy hub for renewable energy due to its major solar and wind resources. Renewables would account for 50-52% of Morocco’s energy mix by 2030, up from a current 38%, Moroccan Prime Minister Aziz Akhannouch said earlier this year. Its wind and solar resources have the potential to make the North African country one of the cheapest providers of renewables in the world, Akhannouch said, and can be used to fuel the country’s green hydrogen ambitions.

Vale has a Saudi suitor: Saudi Arabia’s sovereign wealth fund the Public Investment Fund (PIF) is the leading bidder for a stake in Brazilian miner Vale’s nickel and copper operations, Bloomberg reports, citing people with knowledge of the matter. PIF is reportedly seeking to acquire a 10% stake in Vale’s base metals unit, they said, estimating the stake’s value at c.USD 2.5 bn.

What we know: The PIF is currently in advanced talks with Vale over the minority stake, the sources said, adding that deliberations are still taking place. Negotiations could collapse or another bidder could emerge, they added. The Saudi wealth fund could execute the transaction through the recently established joint venture with the country’s leading mining company Ma’aden. The JV aims “to initially invest in iron ore, copper, nickel, and lithium as a non-operating partner taking minority equity positions,” a statement by the companies said at the time. It is reportedly prepared to deploy over USD 15 bn of capital for investments in the coming years.

And they are not alone in the race: The PIF is expected to beat other bidders vying for the minority stake, including Japan’s Mitsui & Co and the Qatar Investment Authority, the sources said.

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

All under a Saudi push: Saudi Arabia aims to become a global hub for green metals critical for energy transition under efforts to diversify its economy away from oil. This includes significant amounts of uranium and titanium discovered in the country, according to officials. KSA says it has untapped metals and minerals — including copper, zinc, phosphate, and gold — collectively worth USD 1.3 tn.

EDB is extending a lending hand for agritech: The Emirates Development Bank (EDB) has launched AED 100 mn (c. USD 27.2 mn) in financing for the UAE’s food security sector under the country’s first agritech loans program, Wam reports.

What we know: The new program aims to “empower farms, local growers and food suppliers by supporting their adaptation and modernisation efforts.” The funds will be funneled towards facilitating the implementation of agriculture techniques, advanced irrigation systems, crop monitoring tools, and other sustainable practices. The new product will offer green and brownfield project financing, CAPEX and working capital financing, and medium-term loans or working capital of up to AED 5 mn with a ten-year tenor. It will also provide a grace period of up to 2.5 years to beneficiaries.

What they said: “EDB’s commitment to empowering the agricultural community aligns with the UAE's national agenda, which places utmost importance on achieving food self-sufficiency and reducing dependence on imports. By fostering collaboration between financial institutions and the agriculture sector, EDB aims to catalyze the growth of domestic food production, enhance supply chain resilience and contribute to the nation's economic development,” EDB CEO Ahmed Al Naqbi said.

More in the pipeline: The latest program comes under the bank’s mandate to approve AED 30 bn in financing to back thousands of businesses in five priority sectors, which include food security, renewables, manufacturing, technology, and healthcare by 2026.

UAE’s Farnek appoints a new head of consultancy and sustainability: UAE-based smart and green facilities management firm Farnek has appointed Muna AlNahdi as its new head of consultancy and sustainability, according to a statement. AlNahdi will leverage her experience in energy-efficient retrofit projects to spearhead the company’s net zero target across several sectors including retail, hotels and hospitality, and residential properties. The company has a target to slash its electricity, water, refrigerants and fuel consumption by 30% by 2026, and push down consumption by 50% five years later in 2031. Prior to her appointment, AlNahdi served as the head of the energy management department at UAE-based sustainable development organization South Energy, and had held technical roles at Dubai Carbon Center of Excellence, Al Futtaim Technologies, and Quantum Eurostar.

Lucid Group has started customer deliveries of its Lucid Air electric sedan in Saudi Arabia, delivering hundreds of the EVs to the country on a weekly basis, Vice President and Managing Director of Lucid Middle East Faisal Sultan told Argaam.

The specs: The four-seater Grand Touring model packs two electric motors, goes from 0-60 mph in three seconds, has 1.05k horsepower, and can cover some 830 km on a full charge and 320 km on a 12-minute charge, according to its website. The Touring model also packs dual engines, has 620 horsepower, goes from 0-60 mph in 3.4 secs, has a 480 km driving range on a full charge, and covers 320 kms in 15 mins of charging. The Pure base model packs one engine, has 480 horsepower, goes from 0-60 miles in 3.8 secs, covers 660 km on a full charge, and has a driving range of 320 kms on 15 mins of charging.

How much it will cost you: The price of the base Pure EV model starts at SAR 440k (c.USD 117.3k) and goes up to SAR 960k (c.USD 256k) for Lucid’s Dream Edition model, Sultan told Argaam. The Dream Edition has 1.11k horsepower and goes from 0-60 mph in 2.5 seconds.

REMEMBER- Lucid said late last year that 80% of its electric vehicles will be made in Saudi Arabia by 2030. The company also plans to produce 155k EVs yearly in Saudi Arabia once full-fledged production capacity is achieved by 2025, Sultan said at the time. Lucid aims to build a full production plant in the country that could potentially earn the EV manufacturer USD 3.4 bn over 15 years. Construction of the facility began in May 2022.

And it has been drumming up more capital: Lucid Group plans to raise USD 3 bn through a common stock offering, with most the money coming from the Saudi Public Investment Fund (PIF), which is Lucid’s majority shareholder. KSA’s sovereign wealth fund The Public Investment Fund will purchase some 265.7 mn shares in a private placement set to close on 26 June for c. USD 1.8 bn. The remaining USD 1.2 bn will be raised from a public offering of 173.5 mn shares of common stock. Lucid plans to use the funds “for general corporate purposes, which may include, among other things, capital expenditures and working capital.”

Production cuts amid poor performance: The company reported quarterly revenues of USD 149.4 mn, down from an average estimate by analysts of USD 209.9 mn. Its quarterly losses widened to USD 779.5 mn, up from USD 604.6 mn in the same quarter last year. The disappointing quarterly performance has pushed the EV manufacturer to revise its annual production plan this year to manufacture 10k of its luxury EV sedans, down from a previous production plan of up to 14k.

Himalayan glaciers set to lose 75% of their ice by the end of the century: Glaciers in the mountainous Hindu Kush Himalaya region in Asia — which includes Nepal and Bhutan — are set to lose three quarters of their ice volumes by 2100, resulting in severe flooding and water shortages for 240 mn of the region’s inhabitants, Reuters reports, referencing a report by the International Centre for Integrated Mountain Development. Between 2010 and 2020, the rate of melting was 65% faster than in the preceding decade, the research found. 30-50% of glacier ice will be lost by 2100 under a 1.5°C or 2°C global warming scenario. 75% will melt by the end of the century under a 3°C scenario, which the world is on track to reach with the current climate policies, the newswire notes. If the 4°C global warming threshold is crossed, 80% of glaciers in the Eastern Himalaya region will be lost.

Spain’s PVH to supply solar trackers for Neom’s green hydrogen plant: Spain-based solar tracker manufacturer PV Hardware (PVH) — which localized production in KSA back in 2022 with its 8 GW tracker factory — will supply 2.97 GW peak (GWp) worth of solar trackers for PV plants powering the USD 8.4 bn Neom green hydrogen plant, according to a statement. Larsen & Toubro — which was awarded the engineering, procurement, and construction (EPC) contract for the clean energy plants that will power the green hydrogen facility — will build a 2.2 GW alternating current (GWac) solar farm and a 1.6 GW wind power plant for the project, the statement notes. Construction of the first phase of Neom’s USD 8.4 bn green hydrogen plant in Saudi Arabia’s floating industrial complex Oxagon will commence by 3Q 2024.

What is solar tracking? Solar tracking systems reorient PV panels to the direction of the sun, keeping panels perpendicular to the power source and effectively minimizing sunlight reflection and increasing solar energy absorption.

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Saudi Arabia names 10 bidders for mineral exploration license: The Saudi Mineral Ministry has released a list of 10 local and international companies that have qualified for an exploration license at sites in Umm Hadid, Bir Umq, and Jabal Sahabiyah, Zawya reports. The list includes AMAK, Energy Transition Minerals, and Lotus Gold. The exploration licenses will then be issued to the winning bidders within three months. The designated exploration sites are rich in silver, lead, zinc, and copper. The bidders have until the end of July to submit their offers, and the results will be declared in August.

REMEMBER– Copper and lead are critical minerals for EV and battery storage production, silver is essential for manufacturing solar cells, and zinc is used to coat solar panels and wind turbines to protect them against rust.

More winning bids to be announced this month: The Minerals MInistry will also announce the winners from among 13 mining companies shortlisted back in April for the Muhaddad and Ar Ridaniyah exploration licenses this month. African Rainbow Minerals, AMAK, and Barrick Gold are among the bidders.

The Netherlands and Denmark are working together to set up a USD 1 bn fund to invest in green hydrogen projects in South Africa, Bloomberg reports, citing CEO of the Development Bank of Southern Africa Boitumelo Mosako. The fund is set to receive contributions from state finance institutions DBSA and the Industrial Development Corp of South Africa, as well as Sanlam Ltd. and the Hague-based Climate Fund Managers BV, Mosako said. The new fund is materializing as South Africa preps a USD 8.5 bn climate finance pact with some of the world’s richest countries to break away from the use of coal and accelerate its energy transition.

China breaks ground on the world’s largest solar panel facility: China’s LONGi Green Energy Technology has began construction on a USD 6.32 bn PV solar panel plant set to produce monocrystalline silicon wafers, Zawya reports, citing a report on the Xi’an municipal government’s official website. The silicon wafers will be capable of generating 100 GW annually and monocrystalline cells that can generate 50 GW and c.133 bn GWh of electricity annually, potentially cutting coal consumption by 48 mn metric tons.

ALSO- China’s CRRC reveals the first hydrogen-powered locomotive: China’s state-owned Railway Rolling Stock Corporation (CRRC) converted an internal combustion engine to a hydrogen-powered one, according to South China Morning Press. The engine runs for up to 190 hours relying on a hydrogen storage system which can be fueled in two hours, making it cheaper than fossil fuel-powered counterparts. With this tech, CRRC could potentially replace 90% of almost 8k of China’s fossil fuel-powered locomotives with hydrogen-powered locomotives, bringing down costs and carbon emissions at the same time.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Shell and Mitsubishi’s subsidiary Eneco announced delivering the first electricity production from the Hollandse Kust Noord windfarm to the Netherlands through its transmission operator, TenneT’s the electricity grid. (Reuters)
• The China National Nuclear Cooperation and the Pakistan Atomic Energy Commission have signed a USD 4.8 bn agreement to build a 1.2 GW nuclear power plant in Punjab, Pakistan. (Reuters)