Paris financing summit ends with mixed results

Good morning, ladies and gents. We have a busy issue this morning as the region squeezes in its final couple of workdays before adjourning for Eid Al Adha — which brings us to a quick programming note:

Enterprise Climate will be taking a publication holiday starting tomorrow in observance of Eid Al Adha and the Egyptian 30 June revolution holiday. We’ll be back in your inbox at the usual time on Tuesday, 4 July.

THE BIG CLIMATE STORY- The Summit for a New Global Financing Pact in Paris ended without an agreement to provide much-needed relief for poorer debt-distressed countries ahead of climate talks at COP28 later this year.

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THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single climate story dominating international headlines this morning, but a climate-focused summit in Paris continued to get coverage by international press over the weekend as they highlighted a growing momentum over climate finance yet a shortfall in providing a much-needed lifeline for debt-distressed nations as the summit concluded.

The summit got coverage over the weekend from: Reuters | Bloomberg | The Associated Press | AFP | The New York Times | The Wall Street Journal | The Financial Times

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

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OVER IN COPLAND- The United Arab Emirates University (UAEU) unveiled its COP28 roadmap last week, Wam reports. The action plan supports initiatives related to clean energy, waste management, and natural resource repurposing under the themes of research and innovation, youth empowerment, and local and international partnerships. UAEU’s strategy includes interactive student activities such as debates on climate action, technical marathons on the use of artificial intelligence on the environmental sustainability front, and a graphic design contest tackling climate awareness, the news agency quotes UAEU’s Associate Provost for Scientific Research Ahmed Murad as saying.

WATCH THIS SPACE #1- Jordan will announce its green hydrogen strategy next quarter, Assistant Secretary-General of the Energy and Mineral Resources Ministry Hassan Al-Hayari said, Addustour reported on Friday. The strategy aims to turn the kingdom into a competitive hub for low-carbon hydrogen production, Al Hayari said. The ministry is currently holding workshops where the outcomes of the discussions will be used as the foundation for the hydrogen framework.

REMEMBER- Jordan is joining a list of countries in the region that have been working on launching their own national hydrogen strategies. To date, Oman is the only country to have released its strategy, while Morocco and the UAE have released a hydrogen roadmap.

WATCH THIS SPACE #2- European banks are weighing liquidity risks to account for the consequences of a hotter planet, Bloomberg reported on Thursday, citing a joint analysis by the Association for Financial Markets in Europe (AFME) and independent consultancy Oliver Wyman. The survey showed that 87% of the banks polled have begun carrying out their own annual internal stress tests. The results showed that banks are concerned about climate change undermining asset values, with the biggest concern being credit risk, especially for banks that are open to the fossil fuel sector and with those with sizable mortgage books. Some lenders are trying to outline how they’d cope in scenarios where the fossil-fuel sector loses value. Other concerns include business liquidity and interest-rate risks in the banking book, with one-third of the banks surveyed having already modeled these risks, according to the survey.

WATCH THIS SPACE #3- Global carbon pricing in sight? The world should examine ways to introduce global carbon pricing in order to advance the transition to a lower-carbon economy, European Commission President Ursula von der Leyen said, Reuters reported on Thursday. She said at the Summit for a New Global Financing Pact in Paris that the world needs to diversify greenhouse gas emissions that are covered by a carbon price, describing the percentage of emissions currently covered as “almost nothing.”

WATCH THIS SPACE #4- Egypt is getting a new hydrogen processing unit: A consortium of industrial gas producer Gulf Cryo and Emex for Engineering and Construction will establish a unit to process hydrogen gas for various uses in Egypt, and market and sell it under an agreement with the state-owned Egyptian Chemical Industries (Kima), according to a statement.The unit will be established within a Kima factory in Alexandria, with Kima committed to supplying hydrogen gas to the alliance of the two companies, the statement reads, without providing further details about the size and timeline of the potential investment.

WATCH THIS SPACE #5- ReNew Power to resume negotiations on USD 8 bn green hydrogen plant in Egypt: A delegation from India’s largest renewables developer ReNew Power will visit Egypt next month to resume talks with the government on their planned USD 8 bn green hydrogen plant in Egypt’s Ain Al Sokhna, a cabinet statement notes. ReNew Power and Elsewedy Electric signed an agreement for the project back in November. ReNew said at the time that it would undertake further studies and make a final investment decision by 1Q 2024. If the project moves forward, the company expects to begin commissioning the pilot phase in 2026.

The project: ReNew and Elsewedy will set up renewables projects generating 570 MW to produce 20k tons of green hydrogen during the pilot phase of the project, the statement said. The green hydrogen would then be converted to 100k tons of green ammonia. The second phase will see the companies build renewable energy projects yielding 5.68 GW to produce 200k tons of green hydrogen, which would then be converted to 1 mn tons of green ammonia.

The Church of England’s Pension Board (CofE) is divesting from several oil companies as part of its plans to fully exit the fossil fuel sector, according to a statement. The CofE — which in May said it would vote to oust Shell’s Chairman Andrew Mackenzie and the remainder of the oil giant’s board over climate concerns — says its exit from Shell and other oil and gas firms stems from big oil’s lack of “sufficient ambition to decarbonize in line with the aims of the Paris Agreement,” CofE CEO John Ball said in an emailed statement cited by Bloomberg. Shell has shelved plans to pare back oil production, saying earlier this month it would keep oil output steady until 2030.

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DATA POINT #1- Emerging markets must triple clean energy financing to meet climate goals: Emerging and developing countries need to more than triple their annual clean energy investments to c. USD 2.8 tn from the current USD 770 bn, according to a new report (pdf) by the International Energy Agency (IEA) and International Finance Corporation (IFC). The ramped up investments are necessary to help developing economies meet growing energy needs and correspond with climate goals set forth in the Paris Agreement, it said.

Public financing alone won’t be enough to unlock energy access and fight climate change, the report said, underlining the need for blended financing between public and private financing is necessary to lower project risks. The private sector’s role is crucial; two-thirds of the finance for clean energy projects in such economies outside China need to come from the private sector. Private sector financing should rise to c. USD 1.1 tn annually within the next decade from the current USD 135 bn annually, it added.

More is needed for newer technologies: The report highlights the urgency of concessional financing for projects that include newer technologies that are not yet cost-competitive in most markets, including renewable-powered desalination or low-emissions hydrogen, battery storage, and offshore wind. Some USD 80-100 bn in annual concessional financing is necessary by the early 2030s to help lure in private investment for energy transition in such economies.

DATA POINT #2- More must be done to meet renewable energy targets: Annual renewable power must triple by 2030 to keep the 1.5°C global warming goal alive, according to a recent report (pdf) by IRENA. In its World Energy Transitions Outlook 2023, IRENA said the world needs to add an average of 1k GW of renewable power capacity — more than three times the capacity added in 2022 — annually by 2030. The world must also significantly boost the direct use of renewables in end-use sectors, the report stressed.

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CIRCLE YOUR CALENDAR-

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.

A lifeline lost for debt distressed nations: A Paris summit last week meant to address global finance sealed some notable victories, but came to a close without securing much-needed relief for poorer debt-distressed countries ahead of climate talks at COP28 later this year. The Summit for a New Global Financing Pact saw 40 world leaders convene in Paris to discuss achieving a more balanced financial partnership between the global North and South amid the climate crisis and developmental challenges.

The gains: A long-delayed target of USD 100 bn in climate finance annually for vulnerable nations is on track to be achieved, Reuters reported, citing the summit’s final statement. These funds would come from rechanneled IMF special drawing rights (SDRs), IMF Managing Director Kristalina Georgieva said in a statement. The SDR funds are separate from the USD 100 bn in climate finance promised to help poorer nations address the climate crisis and a landmark loss and damage fund agreed at COP27 in Egypt last year for disaster-hit nations.

Some firsts: The summit’s final statement acknowledged for the first time the potential need for wealthy nations to provide fresh funds to multilateral development institutions like the World Bank, as well as to make use of more of the current assets, some USD 200 bn, over the next decade. “We … expect an overall increase of [USD] 200 bn of MDBs’ lending capacity over the next ten years by optimizing their balance sheets and taking more risks,” the statement obtained by Reuters said.

AND- Countries hit by climate disasters can now pause repayments on their loans to the World Bank, according to a bank statement. The new measure came as a result of a campaign led by Barbados Prime Minister and climate champion Mia Mottley. The multilateral lender will also allow countries to “quickly redirect” a portion of their funds to emergency response in the event of a crisis, and will work with the private sector to offer new insurance products for development projects. The Washington-based lender will introduce new crisis debt clauses for new loans to the most vulnerable nations.

African countries are also getting some climate financing: A long-delayed debt agreement was also reached for Zambia, according to a separate World Bank statement. Senegal’s renewable energy capacity will also be getting a boost through a EUR 2.5 bn in new and additional financing under the Senegal Just Energy Transition Partnership (JETP) over three to five years, according to a statement by the European Commission.

And some taxation in sight? A reference was made to determining “new avenues for international taxation,” referring to a global levy for the shipping industry’s carbon emissions and other Bridgetown Initiative requests. “That was widely discussed here and (there's) lots of support behind an initiative that's happening outside of Paris, at the International Maritime Organisation (IMO) in a couple weeks’ time, on a levy on shipping emissions,” Barbados’ special envoy on climate finance Avinash Persaud told Reuters. French President Emmanuel Macron stressed the necessity for a global levy on shipping and aviation to help fund climate action, according to The Guardian. The IMO is set to meet next week for talks on the levy.

There are still bones to pick: Some argued that the Paris summit has failed to deliver for most debt-distressed nations amid rising interest rates and a strong USD, according to The Guardian. “It’s a disappointment. The summit did not go far enough to deliver for the people who bear the brunt of climate impacts,” said Walter Mawere, an advocacy coordinator for Care International in Somalia. The fact that the new funding pledges were actually made in the form of loans or temporary debt relief instead of grants was also criticized. “Unfortunately, the Paris Summit has not provided the breakthrough needed to find the funding for our planet's survival,” Teresa Anderson, Global Lead on Climate Justice for ActionAid International, said in statements to Reuters.

ALSO FROM THE SUMMIT- COP28 President-Designate Sultan Al Jaber stressed in a speech at the closing ceremony of the summit the necessity of scaling up concessional funding to help make climate finance more accessible and affordable. He also called for the integration of sustainable investing principles into mainstream finance to help give momentum towards a new climate-ready financial system. Al Jaber also held meetings with Macron, Mottley, Brazil’s Luiz Inácio Lula da Silva, and UN Secretary-General Antonio Guterres to discuss climate finance reforms, according to Wam.

A big boost to Morocco-Dutch relations: Morocco and the Netherlands have agreed to set up a EUR 300 mn investment fund directed to infrastructure and renewable energy projects, Hespress reported last week. The fund is part of one of the two MoUs signed between the two nations to bolster cooperation in sustainable development, public infrastructure, and energy transition, Maghreb Arabe Press (MAP) reported on Wednesday. The agreement was signed in Salé during Dutch Prime Minister Mark Rutte’s visit to Morocco to bolster bilateral ties.

About the fund: Some 35% of the fund will be in the form of grants, while the remainder will be loans, said Alexandre Wortman, who is in charge of Dutch investment fund Invest International. Wortman said the fund will finance water and renewable energy projects over a span of three years, and he highlighted his country’s interest in investing in Morocco’s green hydrogen. He signaled a possibility of additional allocations depending on project evaluations.

There was more cooperation agreed between the two countries: Morocco and Invest International also agreed to boost cooperation in water and infrastructure, agriculture, renewable energies, sustainable industry, and health, according to MAP. The second MoU, which was signed by the Dutch PM and Morocco’s Energy Transition and Sustainable Development Minister Leila Benali, aims to develop cooperation in renewable energies and new fuels.

And more: The second MoU would back existing and future international initiatives and alliances related to renewable energies and new fuels, as well as expedite the matching of supply and demand with regards to investment and trade between producers of new renewable fuels and buyers, according to MAP. It also aims to develop new clean energy sources, especially offshore wind power, and new uses of renewable energy sources like seawater desalination.

REMEMBER- Morocco has been pushing to position itself as a hub for renewable energy due to its major solar and wind capabilities. Morocco aims to have 50-52% of its energy come from renewables by 2030, up from the current 38%, the Moroccon PM said earlier this year. Meanwhile, the Netherlands has been on a renewables hunt, signing an agreement with Saudi Arabia in May that will see Saudi Arabia establish a green hydrogen corridor to Europe with the Netherlands facilitating the entry of green fuels produced in the kingdom.

Speaking of renewables: Morocco plans to raise overall energy production from renewables to 1.3 GW annually until 2027, up from 0.16 GW generated annually between 2009 and 2022, SNRT News quotes Benali as saying at the House of Representatives. Appropriations for renewable energy projects will be more than tripled to reach MAD 14 bn (c. USD 1.4 bn) between 2023-2027, up from MAD 4 bn during 2009 to 2022, according to the minister.

AIIB may back Egypt’s upcoming second sovereign green bond sale: Egypt’s government is reportedly in talks with the Asian Infrastructure Investment Bank (AIIB) to guarantee an upcoming green bond issuance, AIIB President and Chairman Jin Liqun is quoted as telling Bloomberg on the sidelines of the Summit for a New Global Financing Pact in Paris on Thursday. The guarantee will be “the first such backstop it has ever issued,” according to Jin, who did not disclose any information about the size, timeline, or currency denomination of the bond sale or what portion would potentially be guaranteed by AIIB.

SOUND SMART- Guaranteed instruments issued by development banks provide a safety net for investors by guaranteeing a debt will be repaid to a lender by a third party in the case the borrower defaults.

The agreement would expand accessibility + affordability for Egypt’s climate projects: The guarantee would give Egypt easier access to capital markets at low borrowing costs and allow access to finance for wind farms and other climate projects, Jin said, adding that this will be the first time the AIIB will act as a guarantor for this kind of bond.

AIIB’s move follows those of its peers: The Inter-American Development Bank recently guaranteed repayment of loans in debt-for-nature swaps in Ecuador and Barbados, which Jin notes is a “very interesting” tool that his bank may consider in the future. The UK has provided a guarantee of EUR 80 mn to the AfDB to support phase 3 of Egypt’s El Gabal El Asfar water treatment plant.

When we know about the issuance so far: Egyptian Finance Minister Mohamed Maait said in September that the government is looking at the possibility of issuing a green eurobond “soon,” depending on market conditions. The country’s Finance Ministry signaled in 2022 that it is looking to take a USD 750 mn green bond issuance to market, matching Egypt and the Middle East’s first sovereign green bond issuance in 2020.

World Bank approves USD 268 mn Tunisia-Italy interconnector: The World Bank Group (WBG) signed off on Wednesday on a USD 268.4 mn loan to Tunisia that will be used to finance its planned electrical interconnection project with Italy, the bank noted in a statement.

The project: Dubbed Elmed, the 600 MW subsea interconnector would link the Tunisian and EU power grids, enabling the trade in renewable energy between Tunisia and Europe, the statement said. The project is estimated to cost EUR 850 mn (c.USD 929 mn), according to Reuters. The project’s launch date has not been revealed.

Where exactly is the money going? The funds will be used to build a main converter station and accompanying substations on the Tunisian side as well as support the implementation of the interconnector, the statement notes.

Who else is on board? The Elmed interconnector — which is set to receive an additional USD 25 mn in concessional loans from the Green Climate Fund — is backed by the European Union, the government of Italy, the German Development Bank KfW, the European Bank for Reconstruction and Development, and the European Investment Bank, according to World Bank statement.

Tunisia is also getting a renewables center of excellence courtesy of WBG: As part of its technical assistance package, the World Bank is also planning to set up a renewable energy center of excellence in Tunisia in a bid to position the country “as a training hub for renewable energy projects in the North Africa region,” the statement said.

Oman’s state-owned hydrogen company Hydrom has awarded two green hydrogen blocks that are expected to rake in investments exceeding USD 10 bn, the Times of Oman reported last week. A USD 6.7 bn contract was awarded to a consortium led by South Korea’s steelmaking company Posco Group, and another was secured by the Hyport Coordination Company, which is a joint venture between DEME Concessions and OQ Alternative Energy. Both green hydrogen production facilities — to be powered by 6.5 GW of renewable energy — are expected to generate 250k tons annually once operational.

The Posco consortium: The consortium consists of Mescat Middle East DMCC, Samsung Engineering , Futuretech Energy Ventures, Korea East-West Power, and Korea Southern Power. Posco will hold a 28% stake in the group, while French energy firm Engie will hold a 25% stake, according to The Korea Economic Daily. The remaining ownership will be divided among Korea East-West Power and Korea Southern Power with a 24% stake each, a 12% stake for Samsung Engineering, and the remaining 11% for Thai’s PTT Exploration and Production company.

The project: The consortium will build the green hydrogen plant in the Port of Duqm and will power it with some 5 GW from wind and solar energy farms, the news outlet noted. The group aims to produce some 200k tons of green hydrogen by 2030. The hydrogen will be converted into ammonia as part of the consortium’s export targets. The exact annual production capacity of the plant, and whether all the ammonia would be exported, was not disclosed.

Who’s doing what: Posco Holdings, the group’s investment arm, is set to lead the project and manage the plant-building processes in the country. Samsung’s construction unit will be tasked with the engineering, procurement, and construction (EPC) of the facilities, while the other companies will either produce or sell the green hydrogen generated by the plant.

Hyport Coordination Company’s project: Hyport’s plant will be located in Duqm, Oman, and will be powered by 1.3 GW of renewable energy, the company notes. Hyport will build a solar energy farm and a wind power plant to power its green hydrogen production facility, which will produce some 50k tons by 2029 in its first phase. The green hydrogen the company will produce will also be converted into ammonia then shipped to export markets, according to Hyport. A timeline on the project’s expected launch date was not provided.

What’s next: Hydrom kicked off bidding for its second round last week with the aim of awarding three green hydrogen blocks in the country’s Dhofar region before the end of 1Q 2024, the Times of Oman noted. Meanwhile, the state-owned company is looking to finalize six green hydrogen agreements worth USD 20 bn before the end of the year, according to the news outlet. Hydrom had signed the binding term sheet agreements for green hydrogen projects back in March with several regional and international developers.

Saudi Arabia + South Korea discuss green hydrogen cooperation: Saudi Arabia’s Energy Minister Abdulaziz bin Salman met with South Korea’s Land, Infrastructure, and Transport Minister Won Hee-ryong to discuss cooperation in green hydrogen production and export to South Korea, the Saudi Press Agency reported on Thursday. The two sides also touched on the use of artificial intelligence in the energy sector, and suggested exploring practical agendas for the development of green hydrogen projects in joint workshops with the private sector’s participation.

ALSO- South Korea and Saudi Arabia EV charging companies Chaevi and Eshhen signed an MoU to supply more than 500 of Chaevi’s fast and ultra-fast charging devices to the kingdom, Attaqa reported on Friday.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Egypt’s International Cooperation Minister Rania Al Mashat met with the OPEC Fund’s Director-General Abdulhamid Alkhalifa last week to discuss increasing support for the country's Nexus on Water, Food, and Energy program, according to a cabinet statement. The program focuses on securing climate finance to some of Egypt’s most important green projects.
• The UAE’s Assistant Minister for Economic and Trade Affairs Saeed Al Hajeri and President of Cyprus Nikos Christodoulides discussed on Friday increasing cooperation in renewables. (Wam)
• The Undersecretary of Oman’s Energy and Minerals Ministry Mohsin Al-Hadrami was in Italy yesterday to discuss, among other things, knowledge transfer opportunities in renewables, green hydrogen, and energy storage, according to a cabinet statement.

Siemens Energy dealt a huge blow after major faults found in wind turbines: Siemens Gamesa — a subsidiary of Siemens Energy — has found a “substantial increase in failure rates of wind turbine components” that could cost the company over EUR 1 bn, Reuters reported on Friday. The technical issues identified will affect 15-30% of the more than 132 GW worth of turbines used in wind plants worldwide. Siemens Energy’s shares plunged over 37% on Friday after the company “scrapped its [net income] forecast and warned that costly problems at its wind turbine unit could last for years,” according to CNBC. Gamesa is one of the largest suppliers of wind turbines in the world.

REMEMBER- Gamesa and other wind turbine makers had already been facing major hurdles over the last few years, including rising maintenance costs, supply chain risks, rising inflation, and reduced power installations, all of which have contributed to the sector’s growing losses.

Egypt wind plants at risk? Gamesa is a major player in Egypt’s wind energy sector, and is involved in the 500 MW Gulf of Suez wind farm — formerly known as the Ras Gharib wind plant — the 250 MW West Bakr wind farm, and the 220 MW Gabal El Zeit 2 wind project in the Gulf of Suez.

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Lithium iron phosphate (LFP) batteries are gaining traction globally as an alternative to commercial lithium-ion batteries, Reuters reported last week. Two of the world’s largest automakers, Toyota Motor and Hyundai Motor, have announced plans to equip their future vehicles with LFP batteries, and seven EV battery manufacturing facilities in the US have pledged USD 14 bn for LFP production, including US giant automakers Ford and General Motors. Tesla and Rivian are reportedly considering similar investments, according to the newswire. Commercial lithium-ion batteries are also known as NMC batteries due to the battery cell being made of a combination of nickel, manganese, and cobalt.

LFP vs. NMC batteries: LFP is becoming the more attractive battery choice partly due to environmental and geopolitical concerns given that their production “does not use nickel or cobalt — two metals in dwindling supply and often questionably sourced,” battery make EcoFlow explains. LFP batteries are also more stable and less prone to thermal runaway and overheating issues, making them a safer choice, EcoFlow adds. Lithium-ion batteries, however, have a one-up on LFPs in storage power per unit of volume or weight, but the addition of manganese has enabled them to hold more energy than previously possible, Reuters cited Toyota as saying.

Morocco is preparing to ride the wave: Morocco’s state-owned OCP Group — which mines phosphate, manufactures phosphoric acid, and produces fertilizer — plans to develop 20k tons of fluorine and 30k tons of other specialized chemicals to be used in the production of lithium iron phosphate batteries by 2027.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Payment company Mastercard has launched a global project to recycle credit and debit cards, which should prevent bns of cards in circulation from ending up in landfills. (Reuters)

UAE + MENA Fintech Association make sustainability pledge: The UAE’s Climate Change and Environment Ministry and the Middle East and North Africa Fintech Association (MFTA) have launched the Sustainable Fintech Pledge with the aim of integrating sustainability practices at fintech companies, Wam reported yesterday. The pledge outlines five core principles: Embedding sustainability in business operations, maintaining transparency and accountability, inspiring change beyond organizational boundaries, unlocking climate innovation in finance, and encouraging the development of sustainable fintech products and services. Signatories of the pledge include the Abu Dhabi Global Market, the Dubai International Financial Centre, and Building Products Company.

KSA officials, business leaders discuss funding for the energy transition + establish business council: Government officials and private sector leaders from Saudi Arabia and Estonia held a three-day investment forum last week where they discussed potential funding in technology, startups, and the energy transition, Arab News reported on Thursday. The Saudi-Estonian Investment Forum — held in Tallinn, Estonia — also saw the establishment of a business council between the Council of Saudi Chambers and the Estonian Chamber of Commerce and Industry.

Six energy and chemical companies are developing a roadmap for the import of green hydrogen to Bavaria, Germany from North Africa, according to a joint statement (pdf) published on Wednesday. The six giant German and Austrian based companies — Bayernets, Bayernoil, Gas Connect Austria, Wacker, Westlake Vinnolit, and Verbund — will be looking to transport the green fuel via existing natural gas pipelines repurposed for hydrogen use, cutting costs and allowing for scalability, the statement said. The consortium is looking at transporting the hydrogen from Tunisia via Italy and Austria. Once completed, the hydrogen pipeline will be available for use by other market participants.

REMEMBER- Existing natural gas pipelines may become an essential asset in the green transition, offering the MENA region an edge due to its extensive natural gas pipelines, including the Arab Gas Pipeline and the EastMed pipeline. Bavaria’s existing gas infrastructure is also expected to play an important role in Europe’s hydrogen network, according to the statement.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Jordan’s Energy and Mineral Resources Ministry signed an MoU with 11 hotels in Aqaba to enable them to implement energy conservation projects under the country’s JD 3 mn (c. USD 4.2 mn) Tourism Sector Energy Efficiency Program. (Jordan News Agency)
• Dubai-based multinational logistics company DP World is converting 22 diesel-powered cranes to electric power in Brazil’s leading multipurpose terminal Port of Santos. (Wam)
• The UAE Council for Environmental and Municipal Work has approved a plan for phasing out single-use plastics by 2024. (Wam)
• Bahrain’s Electricity and Water Authority is working on establishing five rapid electric car charging stations in the country. (The Daily Tribune)

Another day, another SAF venture: South Africa’s Sasol — the world’s largest producer of fuels and chemicals from coal and gas — and leading Danish decarbonization company Topsoe are joining forces to set up a sustainable aviation fuel (SAF) joint venture, according to a joint statement released on Wednesday. The 50/50 JV “aims to develop, build, own, and operate SAF plants and promote SAF derived primarily from non-fossil feedstock, utilizing green hydrogen, sustainable sources of CO2 and biomass,” the statement said.

REMEMBER- The EU agreed in April to set binding targets for European aviation to boost its use of SAF in a bid to decarbonize the industry. The proposal aims to increase the use of SAF by ensuring fuel suppliers have 2% of the fuel accessible at EU airports as SAF in 2025, rising to 6% in 2030, 20% in 2035 and 70% in 2050. The EU carbon market is set to provide about EUR 2 bn to help airlines switch to SAF. Some 1.2% of fuels must also be synthetic fuels from 2030, rising to 35% in 2050. Aviation is a difficult sector to decarbonize and net zero aircrafts are not expected for another 10 years.

Japan’s Mitsubishi UFJ Financial Group launches a USD 1.5 bn climate finance platform: Japanese financial services company Mitsubishi UFJ Financial Group has announced the launch of a USD 1.5 bn finance platform to help push climate investments to developing countries, Reuters reported on Thursday. The new green finance joint venture, Gaia, is backed by various UN organizations and aims to channel needed capital to some 20 mn people across 25 climate-vulnerable countries. Gaia, which will fund renewable energy and low carbon mobility ventures, will channel 70% of its funds toward climate adaptation projects and will allocate a quarter of its financing to small island countries and the least developed countries.

Anything for renewables for the Dutch: The Netherlands plans to raise subsidies for green hydrogen production by EUR 1 bn in 2024 and another EUR 3.9 bn in the following years, Reuters reported on Friday. It aims to have the capacity to produce at least 4 GW of green hydrogen in 2030 and grow it by two-fold in 2030, depending on the availability of wind power. “We want to significantly increase hydrogen production in the Netherlands, which is indispensable for reaching our CO2 reduction targets,” Dutch Climate Minister Rob Jetten said.

USAID will provide a five-year USD 88.9 mn grant to East and Central African countries to increase their clean energy production capacity and widen access to clean energy, according to a statement. The financing will go towards adding some 1.2 GW of renewable energy to the region and developing 1.5k km of electricity transmission lines to enhance connectivity to the region’s power grids. The grant will help support 10 mn on- and off-grid electricity connections, providing some 50 mn residents of the region with clean energy sources. Separately, the US Embassy in Nairobi said it would work to unlock c.USD 4.7 bn in public and private financing under its Power Africa program to support renewable energy projects in the region, Zawya reports.

France-based firms acquire Actis’ Africa-focused renewables company BTE Renewables: French energy firm Engie and Paris-based infrastructure investor Meridiam have signed an agreement with Atis to acquire its South Africa-based renewables firm BTE Renewables, the company said in a statement (pdf) last week. The agreement will add 50 MW of onshore wind and 190 MW of solar to Engie’s renewables assets, as well as a portfolio of more than 3 GW of “advanced development projects,” the statement said, without providing further details. Meridiam, on the other hand, will acquire Kenya’s 100 MW Kipeto wind farm and its neighboring 50 MW Siruai wind and storage project. The transaction is expected to close in 4Q 2023.

The sale was a long time coming: Last year, Actis was looking to sell its South African business BTE Renewables for around USD 1 bn and hired Citigroup as advisors.

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EU Carbon emissions could be up for a drop again: The EU’s greenhouse gas emissions could fall again starting this year on the back of a rise in renewable energy generation capacity, The National reported yesterday, citing statements by Goldman Sachs analysts. The EU’s emissions grew 9% from 2020-2022 after a growth in transport demand following the pandemic and a sizable gas-to-coal switch for energy generation. The Russian-Ukrainian crisis saw natural gas prices surge to record levels, pushing power stations to raise their coal use. The investment bank’s analysts see a continued growth in renewable energy capacity and a “more sustainable” transition away from coal and back into gas from 2025, which should help slash emissions in the bloc by another 16% by 2030.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Australian grid operator Transgrid is investing USD 11.2 bn in energy storage systems and 2.5k km of transmission lines to prepare Australia’s New South Wales to rely 100% on renewables within 10 years. (Reuters)
• In the biggest ever award of its kind, the US Energy Department will provide up to USD 9.2 bn in a low-cost government loan to a joint venture between Ford Motor and South Korea’s SK On to help it build three battery plants in the US. (Reuters)
• VSK Energy LLC — a JV between Indian solar panel manufacturer Vikram Solar Ltd, US-based renewables investor Phalanx Impact Partners, and US financial services firm Das & Co — will invest USD 1.5 bn to build two solar panel manufacturing facilities in the US. (Reuters)
• Rolls-Royce Holdings is opening its first office in East Africa to produce sustainable fuels for electricity and to power locomotives and ships. (Bloomberg)