Egypt’s military-affiliated NSPO acquires 20% stake in Taqa Arabia

Good morning, friends. We have another brisk issue for you this morning as the regional climate updates continue to trickle in.

THE BIG CLIMATE STORY- The Egyptian military-affiliated National Service Projects Organization (NSPO) acquired a 20% stake in recently-listed Taqa Arabia one day after one of the energy company’s major shareholders executed a block trade and transferred the proceeds to one of its unnamed creditors.

ALSO IN OUR NEWSWELL- We continue our conversation with Egypt’s climate champion Mahmoud Mohieldin to discuss the emissions and fossil fuel phasedown debate, and what we can expect from COP28.

^^ We have more details on these stories and more, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single climate story dominating international headlines this morning, but deadly wildfires in the Mediterranean continued to get the international press’ attention. At least 34 people were killed in Algeria as the country tried to contain forest fires amid a sweeping heat wave hitting North Africa and southern Europe. The deadly fires also lead to the closure of two border crossings with neighboring Tunisia. Meanwhile in Greece, two pilots have died after a water-bombing plane fighting wildfires in the country crashed as the country scrambles to contain wildfires that have forced the evacuation of tens of thousands in the past days.

The Mediterranean region is a “climate change hotspot”: Greek Prime Minister Kyriakos Mitsotakis said his country was among those severely impacted by climate change. “I will state the obvious: in the face of what the entire planet is facing, especially the Mediterranean which is a climate change hot-spot, there is no magical defense mechanism, if there was we would have implemented it,” Mitsotakis said.

The deadly wildfires got coverage from: Reuters | Bloomberg | The Associated Press | The Guardian | The Financial Times | BBC | Sky News

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OVER IN COPLAND- COP28 launches its Food Systems and Agriculture Agenda: The COP28 UAE Presidency launched the Food Systems and Agriculture Agenda and invited governments to sign the Leaders Declaration on Food Systems, Agriculture and Climate, which asks governments to align their national food systems and agriculture strategies with their Nationally Determined Contributions, National Adaptation Plans, and National Biodiversity Strategies and Action Plans. The Presidency — represented by UAE Climate Change and Environment Minister Mariam Almheiri — stated that it will work alongside the UN Food Systems Coordination Hub and a diverse group of partners to advance the Food Systems and Agriculture Agenda.

COP28 is gathering the troops: The COP28 Presidency will bring together businesses, farmer and producer organizations, and other non-state actors to drive progress across production, consumption, food loss, and waste. This partnership will work with over 15 leading CEOs and involve actors across each stage of the agriculture process, from production to consumption and finance.

AND- The EU could lose two of its top climate change negotiators ahead of COP28 with the possible exits of Frans Timmermans and Spain’s Climate Minister Teresa Ribera, Reuters reports. Timmermans, the European Commissioner tasked with climate and environment policies, is running as a candidate in Dutch national elections. If he secures the vote, he may have to give up his post as climate chief within the bloc as early as next month. Ribera’s role is at risk after snap general elections last Sunday sent the country into political limbo with no clear majority. She has represented Spain at climate talks since 2018.

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WATCH THIS SPACE #1- More want in on Egypt’s SCZone’s bunkering services: The Suez Canal Economic Zone (SCZone) received offers from two unnamed global firms for green methanol and gas bunkering services at affiliated ports, Al Mal reports, citing people it says have knowledge of the matter. They said the two offers will be reviewed in the coming period by the SCzone and relevant authorities tasked with issuing licenses. The SCZone could try to expand bidders for the sought licenses through inviting them to operate at local ports first and issue licenses for the most fitting later.

REMEMBER- Egypt awarded four bunkering licenses last year to Coral Energy, Minerva Bunkering, and Peninsula companies following a tender under an ambitious plan to become a one-stop ship shop.The SCZone first announced plans to launch the new marine services in January 2022, as part of its 2020-2050 strategy.

All eyes on the canal next month: The world’s first ever green methanol-powered container ship is set to pass through the Suez Canal next month, the sources said, adding that the SCZone was currently focusing on finalizing related executive procedures. They said the vessel will be refueled at a container terminal at East Port Said Port. The inaugural journey for the vessel leaving from South Korea to Denmark comes under a partnership announced last month between Dutch-based chemical producer OCI Global and Denmark’s shipping giant AP Moller-Maersk.

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WATCH THIS SPACE #2- The UAE’s first locally produced electric motorcycle Sulmi EB-One will hit roads within the next six months, Founder Rashid Al Salmi told Zawya. The EV company is looking to provide prototypes of the e-bike to logistics and delivery services firms in the UAE for trials before the bike is rolled out, Al Salmi says. The all-electric motorcycle — which has not yet been priced — packs a 10.4 KW battery, can cover 300 kilometers on a full charge, and has a 150 km/h top speed.

CIRCLE YOUR CALENDARS- The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

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DID YOU MISS THE ENTERPRISE EXPORTS AND FDI FORUM? Tune in to the Enterprise Podcast and listen for yourself: The Enterprise Podcast is back with another installment of our forum series, where we bring you audio recordings of what was said on stage at the Enterprise Exports and FDI Forum, which took place in May.

WANT TO LISTEN? Head to: Apple Podcast | Spotify | Google Podcast | Anghami. We’re releasing a new episode every Sunday morning.

IN THIS WEEK’S EPISODE- We ask some of the biggest multinationals and suppliers operating here — namely, in logistics, e-commerce, and FMCG — what it is they’re looking for in a local partner, product or service and what are some of the pain points they’ve had to cope with. We were joined on that panel by Khaled Morsy, CEO of DB Schenker Egypt, Omar Elsahy, General Manager at Amazon Egypt, Tarek Kamel, Chairman and CEO of Nestlé Egypt and Sudan.

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CIRCLE YOUR CALENDAR-

Sweden will host World Water Week from Sunday, 20 August to Wednesday, 24 August in Stockholm. Organized by the Stockholm International Water Institute, the event will bring together policy makers, NGOs, and private sector players to discuss innovative solutions to managing water and how to tackle food security, biodiversity, and climate change.

The US will host the International Conference on Recycling and Waste Management and the International Conference on Environmental Sustainability and Climate Change

from Monday, 21 August till Tuesday, 22 August in Philadelphia. The waste management conference will gather environmental engineers, and recycling, wastewater treatment, and climate researchers to discuss trends and innovations in plastics recycling, wastewater treatment, and renewable energy. The sustainability and climate change conference will bring together researchers and industry leaders to spotlight innovations in environmental science, climatology, renewable energy, and pollution control.

The Dominican Republic will host the COP27 Transitional Committee from Tuesday, 29 August to Friday, 1 September. The meeting aims to establish institutional arrangements, modalities, governance structures, and terms of reference for the landmark Loss and Damage Fund. It also wants to expand sources for climate funding under the program.

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

Taqa Arabia welcomes a new shareholder: The Egyptian military-affiliated National Service Projects Organization (NSPO) acquired a 20% stake in recently-listed Taqa Arabia, according to a disclosure (pdf) to the Egyptian bourse yesterday. The announcement, which disclosed both the buyer and seller, comes one day after one of the energy company’s major shareholders executed a block trade on Monday and transferred the proceeds to one of its unnamed creditors.

What we know: The transaction, which was valued at EGP 1.63 bn, was executed on 270.4 mn shares at an average sale price of EGP 6.023 apiece, according to the statement, which disclosed both the buyer and seller’s identities. It disclosed the seller as Silverstone Capital Investments — an entity controlled by Taqa Arabia parent company Qalaa Holdings — which will now hold a 29.1% stake in Taqa Arabia after the block transaction saw it selling its 20% stake in the company.

All part of a previous agreement: The transaction was executed as part of a sale and repurchase agreement between Taqa Arabia’s main shareholders — Silverstone Capital Investments, Qalaa Holdings, and Citadel Capital Partners — and one of Qalaa’s creditors, the statement showed. Details on the debt owed by Qalaa Holdings were not made public.

About NSPO: The NSPO is a military-affiliated entity operating in various sectors that include oil and gas, mining, food, agriculture and construction among others, according to its website.

Qalaa can rewind: Per the agreement, Qalaa can buy back the shares within four years of the transaction, the statement said.

REMEMBER- Taqa Arabia’s shares began trading on the EGX earlier this month in what was seen as a disarrayed debut following a technical listing. Silverstone Capital Investments has already offloaded its ownership in the company from 80% to 49% on its trading debut, selling shares to other major shareholders Financial Holdings Investments and Rimco EGT Investments.

Advisors: EFG Hermes quarterbacked the transaction, according to the statement.

Market reax: Taqa’s shares dropped 3.8% yesterday to close at EGP 10.54 apiece.

UAE’s Energia Verde to invest USD 18 mn in greenifying Indian ports: UAE-based real estate firm Luxury Assets Real Estate will invest INR 1.5 bn (c. USD 18.3 mn ) to greenify three of India’s ports through Energia Verde, its newly formed JV with the UK’s Sunshine Holdings, CEO Mohammed Adeel Shaikh told Enterprise Climate.

Where is the money going? The company’s USD 18.3 mn investment will finance an ongoing collaboration with the Indian government aimed at decarbonizing three of the country’s ports and implementing renewable energy sources and battery energy storage facilities for cranes, Shaikh said. The ports are located in Mumbai and the south and eastern regions of the country. A timeline for the operational launch of the projects was not disclosed.

About Energia Verde: The company aims to invest some AED 300 mn (c. USD 81.6 mn) in the next six months across the solar, wind energy, battery storage, and grid infrastructure sectors, according to Shaikh. Luxury Assets Real Estate — who also invests in the logistics sector — established Energia Verde in a bid to help decarbonize and optimize transportation and supply chain processes, Shaikh notes.

More in the pipeline: Energie Verde has a target to build a 3 GW solar energy plant in India’s Rajasthan, as well as BESS facilities in India’s Jammu and Kashmir with a combined 2 GW storage capacity. The company has so far invested AED 75 mn in India’s clean energy sector, and plans to also invest in the Middle East and Europe, Shaikh tells us.

WAIT- They’re not the only UAE firm greenifying Indian ports: UAE-based port and marine services company Trot Solutions signed an MoU with US lithium-ion battery technology company C4V to develop renewable energy and storage solutions to power India’s port activities, the Press Trust of India news agency reports, citing a C4V statement. The timeline and investment cost of the project was not disclosed.

What we know: The agreement covers converting the existing ports into green facilities and jointly developing a “strong supply chain through C4V gigafactories,” according to the statement. The two companies will also collaborate on research and development projects, and building renewable and battery storage facilities that will power all port equipment, including small vessels.

India is solidifying its MENA connections as it takes strides in the global energy transition: Earlier this week, Indian renewable energy company Acme Group secured an INR 40 bn (c. USD 487.8 mn) loan from Indian infrastructure financial institution REC Limited for the green hydrogen and ammonia project it is building with Norway’s Scatec in Oman. Last week, UAE President Mohamed bin Zayed Al Nahyan and India’s Prime Minister Narendra Modi agreed to boost cooperation on renewables and green hydrogen. UAE’s National Central Cooling Company (Tabreed) achieved its first district cooling transaction in India after signing an agreement with the real estate and infrastructure development arm of Indian conglomerate Tata Sons last May. An interconnection link between India and the Gulf could be in the works as India is considering linking its power grid to Saudi Arabia and the UAE through undersea cable. India’s Adani Group is reportedly planning to invest in renewables projects with 10 GW capacity in Morocco to supply green ammonia to Europe.

The great fossil fuel debate: As COP28 nears, topics of a fossil fuel phasedown and emission cuts remain a debatable issue, with OPEC raising the big question: Should governments opt to limit oil demand to slash emissions instead of obliging producers to curb supply? The topic of having a fossil fuel phasedown itself has been contentious, with several major fossil fuel producing nations repeatedly blocking efforts to reach consensus on a phasedown to curb the impacts of climate change.

In this second part of our conversation, we speak with Mahmoud Mohieldin — Egypt’s UN high-level climate champion at COP27, a special envoy for the UN secretary-general, and an executive director at the IMF — to discuss the fossil fuel phase out debate and what can be expected from COP28.

Did you miss part one of the conversation? Tap or click here to read it.

Enterprise: There’s a big debate raised by OPEC that governments should shift focus on limiting oil demand to slash emissions rather than pressuring producers to curb supply — do you think this is an effective strategy in the energy transition?

Mahmoud Mohieldin: In my opinion, it’s not an either or question. What is required in the behavioral change is the following: I wouldn’t go and accuse the supplier and forget the demand. We need to be aware of what’s happening in countries in the South, including those who are producing oil and natural gas as a transitional source of energy. We are all basically one camp against a disaster that has existential risk against humanity, so what is needed for the change here is behavioral change by the consumers and the producers through strong incentives.

We need to have effective regulations that should be applied to all without exceptions, along with good standards for dealing with emissions and an even better understanding of what investments based on ESG mean, which have been a really big debate in order to avoid greenwashing.

Not to mention, we need adequate financing in place because all changes including altering patterns of production or decarbonization require finance. Dealing with carbon capture requires finance, shifting from coal to transitional energy sources like natgas or investing in renewables require finance. And there’s been good progress this year, which marked the first time investments in renewables exceeded investments in the traditional hydrocarbon sector.

E: Do you see fossil fuel phaseout or phasedown making its way on the COP28 agenda?

MM: Yes, I think it will. But It has always been there on the agenda, including COP27, despite some accusations that Egypt was focusing more on the holistic approach on loss and damage and on adaptation. COP27 didn’t compromise work toward maintaining 1.5°C, there was more emphasis added on the implementation agenda, especially with the engagement of the private sector.

I’m expecting more action on this topic from COP28 because it’s no secret that the host country is one of the biggest hydrocarbon producers. I have seen some good indicators coming from the oil sector regarding an announcement of its 2050 carbon neutrality targets as soon as possible, what kind of investments they will be making, and how they can use their accumulated surplus to invest in other sources of energy including renewables and green hydrogen.

E: There’s been growing concern of an influence of fossil fuel producers on the upcoming summit, will this impact the ability to continue with a successful agenda for the climate talks?

MM: Well, I think this is unfair because the COPs in the past have been hosted either in a major producing country or a major consumer country or even both. Glasgow, which has its location not far from the North Sea’s oil resources, still did a good job in keeping the 1.5°C goal alive during COP26.

The Presidency and the host of COP are basically under the mandate of the UNFCCC. UAE is going to not only be a generous host, but also an effective one. The work is basically in the hands of negotiators, and 80% of emitters happen to be within the G20. If we see progress and some consensus during the G20 discussions in September, that’s great news.

ِِE: Do you believe disagreements on emission cuts and scaling up financing for developing countries in conferences preceding COP28 may lead to these issues failing to gain traction at the summit?

MM: There is no disagreement whatsoever on emissions reduction — the discussions at conferences like Bonn are clearly centered on how it can be delivered, how to shift from the high dependence on fossil fuel, how to pledge implementation, and determining the pathways that deliver this implementation. These are issues of high priority, and it’s not enough to just set targets. It’s very much about the three major means of implementation: Finance, issues related to technology, and regulatory frameworks.

I would say that we shouldn’t really be ignoring the importance of trade as one of the areas of means of implementation. Trade can act as support to implementation or we leave it as it is today, with many restrictions on trade flows that don’t support countries achieving their energy transition goals.

Human-induced climate change has played an “absolutely overwhelming” role in extreme heatwaves across North America, Europe and China this month, Reuters reports, citing a new scientific report (pdf) published by the World Weather Attribution. Without human-induced climate change, the events this month would have been “extremely rare,” the study concluded. “European and North American temperatures would have been virtually impossible without the effects of climate change,” one of the study’s authors and researchers at the Royal Netherlands Meteorological Institute Izidine Pinto told journalists, adding that for China “it was around 50 times more likely to happen compared to the past.”

How much heat are we talking? The World Weather Attribution team estimated that rising greenhouse gas concentrations made the European heatwave 2.5°C hotter than it would have been otherwise. Increased global emissions also drove up North America’s heatwave by 2°C and China’s by 1°C. While the start of the El Niño phenomenon likely contributed to the increased extreme temperatures, rising greenhouse gasses were the major factor driving the scorching weather.

Our region is not spared: Heatwaves in North Africa have sparked a series of wildfires across Algeria that have left 34 dead, Reuters reports. Some 8k firefighters were called on to battle the raging flames and bring them under control in Boumerdes, Bouira, Tizi Ouzou, Jijel, Bejaia and Skikda regions. So far 1.5k people have been evacuated from their homes.

World Bank supports Morocco’s water security efforts with USD 350 mn loan: The World Bank Group’s board of directors approved a USD 350 mn loan to Morocco in support of the country’s National Program for Potable Water Supply and Irrigation, according to a statement. The program would require investments to the tune of MAD 143 bn (c. USD 14.6 bn) to mobilize financing in Morocco’s water sector in a bid to strengthen the country’s climate resilience. The World Bank says its green loan comes at a critical time as Morocco grows more vulnerable to droughts on the back of climate change, noting the country is approaching the absolute water scarcity threshold of 500 cubic meter (cbm) per capita per year. Water inflows have declined in the country from 2.5k cbm per capita annually in 1960 to 620 cbm in 2020, placing Morocco in a situation of structural water stress, the bank notes.

REMEMBER- Droughts threaten North Africa’s water and food security: An acute drop in precipitation levels owing to climate-induced droughts and warm winters is affecting soil moisture and river flows in the majority of cereal-growing centers in Morocco, Algeria, and Tunisia, with wheat yield potentials expected to plunge between 15-24% compared to the last five-year average in the three countries. Barley potentials are also expected to drop between 10-30% below 2017-2022 averages in the region.

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Mubadala is exploring CCUS projects in Indonesia: Abu Dhabi’s Mubadala Energy and Indonesian state-owned energy company Pertamina have signed an MoU to explore opportunities in carbon capture, utilization and storage (CCUS) projects in Indonesia, Wam reports. The partnership will see the companies conduct joint studies and evaluations for potential carbon storage projects in Pertamina’s and Mubadala Energy’s existing portfolio of assets in Indonesia. The agreement also aims to facilitate knowledge exchange between the two companies.

Pertamina is collaborating with other companies in the region: In February, Emirati renewables giant Masdar announced it has acquired shares in the geothermal unit of Indonesia’s state-owned energy firm Pertamina. The value and size of the stake were not disclosed at the time. Last November Saudi Aramco signed an agreement with Pertamina to individually conduct feasibility studies on the creation of a hydrogen and ammonia value chain in Indonesia.

And Mubadala is developing a carbon market: Mubadala Investment Company — Mubadala Energy’s mother company — secured an undisclosed stake in Singapore-based carbon trading exchange AirCarbon Exchange last November. Bloomberg estimated the purchased shares to be at least 20% of AirCarbon. Last month an alliance was launched in partnership with AirCarbon Exchange, Mubadala Investment Company, amongst other big banks and energy companies to establish a framework for carbon markets. South Korean telecoms group SK Group has also signed a partnership agreement with Mubadala to set up a voluntary carbon market in Asia.

UK-based renewables investor Octopus Energy Generation will earmark USD 20 bn by the end of the decade to fund offshore wind energy projects globally, according to a statement. The investment will be channeled toward generating 12 GW of clean energy annually, the company notes, adding that it has several agreements in the pipeline and would fund projects that are either currently under construction or ones already operational. The company manages some USD 7.7 bn worth of green energy globally, investing in renewables projects including the Xlinks Morocco-UK Power Project and the 1.2 GW offshore Hornsea One wind energy project, which is one of the world’s largest offshore wind assets. Since entering the offshore wind power market in 2022, Octopus has sealed five project agreements worth USD 1 bn, it notes in its statement.

The International Finance Corporation (IFC) will extend a USD 180 mn green loan to mining company Allkem to support its lithium mining project in Argentina, according to a statement. This marks the first investment by the lender in the lithium production sector and the first time a greenfield mining project’s funding has been structured as a sustainability-linked loan, the statement notes. The project is expected to annually produce 15k tons of lithium carbonate equivalent in its first stage. The IFC will provide a credit facility totaling USD 100 mn from its own account for the project, an additional USD 30 mn in mobilization, and is expected to arrange a parallel loan of up to USD 50 mn to finance the mining operation, it said.

REMEMBER- Lithium is a necessary component for EV battery production and electronics. Several countries in the region have been doubling down on mining efforts in a bid to meet rising demand for the mineral, which is among several green metals essential for the energy transition. The International Energy Agency (IEA) expects the supply of lithium will reach 420k metric tons by 2030, which is still well below the required increase by 2030 of 702k tons to realize a net-zero scenario by 2050.

Canadian University in Dubai (CUD) students have put together a solar-powered driverless car for transit between two campus buildings, the university announced on its website. 22 senior students from various faculties worked in teams to develop the vehicle’s navigation system, power capacity and bodywork, and chassis.

Who did what: Five teams focused on central procession design and controls and management related to handling the inputs from the vehicle’s camera, light detection and ranging (lidar) system sensors. Another team was tasked with supplying power to the installed electronic devices through a PV panel on the roof to charge the traction battery to supply a 60-volt power supply.

UAE eyes being a pioneer in autonomous mobility: The UAE granted its first national license for self-driving vehicles to China’s WeRide earlier this month — a first in the Middle East and “even globally,” according to a statement. The license grants WeRide the right to conduct various road testing and operations of self-driving vehicles in the country.

All under an ambitious plan: Dubai aims to have 25% of its transportation achieve fully autonomous operations by 2030, according to officials. In June, the Integrated Transport Centre (ITC) in Abu Dhabi allowed visitors to the city’s Saadiyat Island and Yas Island to experience the technology through a model branded “TXAI” which was launched between WeRide and local firm Bayanat.