The Russian-Ukraine war is adding impetus to MENA grid interconnection projects with Europe.

Good morning, wonderful people. We hope you had a fantastic weekend and, if you’re in the US or Canada, that you’re enjoying the labor day holiday. It was a busy weekend on the regional climate front, so we’ going to jump right in:

THE BIG CLIMATE STORY- It seems like Russia’s energy beef with Europe could prove lucrative for MENA’s renewable energy sector. Egypt and Greece are looking to work on 9.5 GW of solar and wind projects, with some of that electricity going to Greece. This the latest in a series of interconnection projects linking the grids of Egypt and Europe and the second major one after Morocco’s 10.5 GW interconnection project with the UK. We dive deeper in today’s Renewables section, below.

Keep the renewable angle in context: Europe is also looking to buy more and more fossil fuel from our part of the world, including Egypt and Qatar. Russia said over the weekend that it will not resume gas shipments to the continent through the Nordstream pipeline as planned. It gave no timeline for the resumption of exports, blaming the indefinite shutdown on an oil leak at a compressor station (CNN | Financial Times | Guardian).

WATCH THIS SPACE #1- Egypt is likely to get green hydrogen regs soon: Egyptera, the country’s renewables regulator, could announce a new regulatory framework governing investments in green hydrogen projects next month, local media reported over the weekend. Officials have held talks with an unnamed foreign advisory firm to help draft regs and model contracts that would be signed with prospective investors.

Background- Dozens of firms have pledged USD bns of investment for green hydrogen and green fuel projects, largely in the coastal city of Ain Sokhna. The latest round of MoUs came last week when seven regional and European firms signed up to explore building facilities with a combined annual capacity of more than 5.5 mn tons.

WATCH THIS SPACE #2- Oman’s state-owned solid waste management firm Be’ah is developing a waste trading platform, the Oman Daily Observer writes. The platform will see an online auction and allow for trading in recyclable solid waste. It will also see a ticker displaying local prices for waste materials. Local recyclers usually opt to ship their recyclable waste abroad due to higher market prices, instead of recycling and turning it into higher-value products at home, the publication notes.

WATCH THIS SPACE #3- Oman is two for two: Oman’s Al Shawamikh Oil Services Company wants to build a blockchain-backed sustainable energy management system with government tech solutions provider Frontech, according to a company statement.

IMAGE OF THE DAY- You really have no idea how big a wind turbine blade is until you’re stuck in traffic with one. We caught a glimpse of this wind turbine blade traveling down the Cairo-Hurghada highway, right around Ras Ghareb in Egypt, and we could not see the other end of the blade. Tap or click here or the image above to see the full blade side-by-side with fully functioning wind turbines in the distance.

HAPPENING TODAY-

The American University in Cairo is hosting COP27 and beyond: Climate policy and inclusive development at its downtown campus in Tahrir Square, Cairo, today. You can register for the event here.

THE BIG CLIMATE STORY OUTSIDE THE REGION-

There are a few big stories, the California wildfires dominate the headlines. The fires have forced thousands of people to evacuate in Northern California and burned over 4k acres of land. The so-called Mill Fire has been 25% contained as of dispatch, according to the California Department of Forestry and Fire Protection. (Reuters | AP | NYT | Washington Post | The Guardian)

Other stories that have caught our eye: #1- The world’s largest offshore wind project is now fully operational. The 1.3 GW Hornsea 2 wind plant situated off the coast of Yorkshire in the UK became fully operational on 31 August, according to Danish energy firm Orsted, the plant’s developer.

#2- French transport group CMA CGM launched a five-year, USD 1.5 bn fund to drive its energy transition, according to a company statement yesterday. The fund will invest in the production of new fuels, decarbonize port terminals, warehouse and truck fleets, support prototypes and trials and make its offices greener. It will also help set up a global innovation platform developed in conjunction with other companies, SMEs, startups and the academic and scientific community, the statement said, without noting how this platform will actually work.

#3- A third of Pakistan is still underwater, and the country’s climate change minister says it’s time to start talking about rich nations paying reparations to countries facing climate disasters.

SIGN OF THE TIMES- Carbon emissions likely to cost the US almost 4x as much as was previously thought, according to a new study by science journal Nature. The “social cost” of CO2 emissions — which the US calculates in USD and currently puts at USD 51 per metric tonne of CO2 — actually stands at almost USD 185 per metric tonne, the study concludes.

WORTH READING– Spain and Portugal’s renewables drive is being posited by the NYT as an example of EU energy policy done right — and a possible solution to weaning itself off of Russia’s energy. As of 2021, Portugal got 60% of its electricity from renewable resources and during July 2022, almost 50% of Spain’s electricity generation came from green sources. With Gazprom suspending gas deliveries to Germany last week and natural gas costing 10x what it did last year, Europe has a few things to learn from the Iberian Peninsula, Patricia Cohen writes for the NYT. For years, it was cut off from the pipelines of cheap Russian gas, unlike the rest of Europe. So, it had to invest in renewable resources, namely wind, solar and hydropower, and set up a system to import gas from Africa and the US.

** CORRECTION- Egypt’s Financial Regulatory Authority is looking into plans to set up a local carbon market, allowing companies to buy and sell carbon credits. It is not introducing a carbon offset tax as we incorrectly noted in Thursday’s issue. We have since corrected the story on our website.

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COUNTDOWN TO COP- The International Renewable Energy Agency (IRENA) will hold the first meeting of its Alliance for Industry Decarbonization at COP27, according to a statement. Cofounded by Siemens Energy and 13 other companies, the alliance aims to accelerate net-zero ambitions and decarbonize industrial value chains to work towards the Paris Agreement climate goals. It also looks to drive green industrialization, as the industrial sector emits around 28% of greenhouse gas emissions, the statement adds.

CLIMATE DIPLOMACY- Belgium wants further climate cooperation with Morocco: Belgian MP David Leisterh emphasized the importance of his country strengthening environmental, economic and social ties with Morocco, following a meeting with Moroccan Foreign Affairs Minister Nasser Bourita in Rabat on Friday, according to a Moroccan government statement.

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CIRCLE YOUR CALENDAR-

Egypt is holding online meetings on Tuesday to discuss the “50 by 2050” plan — an initiative led by the country’s Environment Ministry aimed at seeing 50% of Africa’s waste recycled by 2050 — which it plans to introduce at COP27, according to Egypt’s State Information Service. Online meetings held in July and August have already garnered support, with 45 public sector and 60 private sector players said to be committed to taking part in the initiative, said Roland Berger senior partner Hani Tohme told the National. The final list of participants will be announced at COP27.

Private sector participation in 50 by 2050 is crucial to its success, Environment Minister Yasmine Fouad said, according to Egypt’s SIS shortly after the August online meetings were held. A key aim of these meetings is to see how the private sector can participate — especially through waste-to-energy or biogas, Fouad added.

Also on Tuesday, the Egyptian Center for Economic Studies (ECES) will be hosting a Carbon Market Webinar via Zoom. Discussions will revolve around how Egypt and African countries can create an integrated, profitable carbon market. You can register for the event here.

The 2022 Euromoney Saudi Arabia Conference will take place in Riyadh on Wednesday, 7 September. Besides discussing Saudi Arabia’s economy in the context of the global macro-outlook, it will also host a workshop on ESG and climate change.

US climate envoy John Kerry will be in Egypt this week for the Egypt-International Cooperation Forum (Egypt-ICF), which runs 7-9 September at Almasa Convention Center in the new administrative capital. The three-day event will bring together global policymakers, ministers, development partners and other participants ahead of COP27 to discuss climate action and green transition, food security, and others with a focus on Africa. Check the full agenda here (pdf).

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

Egypt and Greece are working on a plan to add 9.5 GW of renewable power generation capacity in Egypt for export to Greece, according to a statement from Ittihadiya, the office of the Egyptian president, on Thursday. The electricity would be generated by wind and solar plants and would be linked to Greece via subsea cables, the statement said. This came following a meeting between President Abdel Fattah El Sisi and the CEO of Greek infrastructure investor Copelouzos Group last week.

^^ We have more on the story in yesterday’s EnterpriseAM.

Add that to the list of grid connection projects between Egypt and Europe: Egypt has been looking into forging closer electricity relations with Greece and Cyprus, including the USD 4 bn, 2 GW EuroAfrica Interconnector, and the 3 GW Greece-Egypt Interconnector (GREGY), which counts Copelouzos as among its key players.

Egypt, meanwhile, is looking to offer more solar projects to the private sector: This wasn’t the only major renewable energy story to come out of Egypt over the weekend, as the local press reported that Egypt’s Electricity Ministry plans to tender six solar projects with a combined capacity of 300 MW in Aswan Governorate to local and international private sector firms in 4Q 2022. Total investments are estimated to be upwards of EGP 5 bn.

MENA is increasingly being seen as an energy lifeline for Europe… Europe has increasingly been looking to wean itself off of Russian fossil fuels after imposing sanctions on Moscow in response to its invasion of Ukraine earlier this year. Supply shortages have caused natural gas and electricity prices on the continent to surge to record highs this year, pushing the EU to strengthen ties with other energy suppliers such as Egypt. The EU has this year signed a gas import agreement with Egypt and Israel and is looking to accelerate interconnector projects such as GREGY.

…Particularly the renewable variety: The MENA region has already been an exporter of renewable energy to Europe for some time now. Morocco has been exporting electricity generated from solar and wind energy to Spain and Portugal through two electricity interconnection projects with a combined generation capacity of 1.4 GW. The country, which is looking to become a global leader in electricity exports, is working on a 10.5 GW solar, wind, and storage complex that could see it export around 3.6 GW of electricity to the UK by 2030.

^^ You can read more about the Morocco project here.

Qatar, UBS could set up USD 500 mn green investment vehicle: The Qatar Financial Center (QFC) has signed a letter of intent with UBS Asset Management to work on a green private markets initiative that will invest in several sectors including energy storage, eco-transport, food security and environmentally-friendly tech, QFC announced in a statement last week. The two sides would aim to attract an initial investment of USD 500 mn which could then increase “in subsequent stages,” the statement said.

But increasing green investments isn’t the only goal here: The initiative is also about increasing Qatar’s position as a global financial center, according to comments made by QFC Authority CEO Yousuf Mohamed Al Jaida. An undisclosed percentage of the returns will be spent on “developing and growing the financial services ecosystem in Qatar” and attracting more financial services companies to set up shop in Doha, he said.

The UAE’s state-owned Abu Dhabi National Oil Company (Adnoc) sent its first low-carbon ammonia shipment to Europe, the company said in a statement on Thursday. Their initial trial shipment, destined for Hamburg-headquartered copper producer Aurubis, is the first of several low-ammonia cargoes bound for Germany.

A test case for low-carbon ammonia as fuel: Aurubis will use the low-carbon ammonia as a fuel source in its wire rod factory. The company plans to test its efficacy as an energy source with minimal carbon footprint for multi-metal production, according to Adnoc.

The shipment is a part of Adnoc’s expansion plans: Adnoc is developing a new low-carbon ammonia plant that will produce 1 mn tons per year at its industrial services and logistics hub in the Ruwais Industrial Complex, the company said.

A true MENA affair: Adnoc’s low-carbon ammonia was produced by OCI’s nitrogen-fertilizer manufacturer Fertiglobe — in which Adnoc has a stake — at the Fertil Ruwais industrial petrochemical complex in Abu Dhabi.

The UAE is looking to become a major exporter of low-emission fuels, ultimately exporting 25% of the hydrogen it produces to global markets, the statement tells us.

Aramco’s Sabic looks to inject renewables into the petrochems industry: Saudi Basic Industries Corporation (Sabic), the chemicals manufacturing arm of oil giant Aramco, is testing out a new piece of technology that could potentially cut emissions from an energy-intensive production process by at least 90%, the company said in a statement Thursday. Sabic is working on constructing a pilot plant for steam cracker furnaces powered by renewable energy, in association with German chemical companies BASF and Linde. The plant will receive 6 MW of power generated by renewable sources and process around 4 tons of hydrocarbon per hour when it comes online in 2023.

Steam cracker furnaces for dummies: In the chemicals industry, steam cracker furnaces are used to break down hydrocarbons into compounds used to manufacture chemical and polymer products like plastic, rubber and detergents, as well as products like clothing and packaging. This is a highly energy-intensive process, relying on natural gas to achieve temperatures of around 850°C. Now, Sabic, BASF and Linde want to use renewable energy to get the same result at the BASF’s Verbund site in Germany.

Who’s doing what: Sabic and BASF will foot the bill for the project — along with EUR 14.8 mn in funding from the German government — though the full price tag for the project was not disclosed. Linde is the engineering, procurement and construction partner and will commercialize the developed technologies in the future.

ARAMCO’S VC ARM EYES SUSTAINABILITY STARTUPS-

Aramco’s VC arm Wa’ed is looking to invest USD 100 mn in global startups across a range of sectors, including sustainability startups, CEO Fahad Alidi told Bloomberg. Wa’ed’s USD 200 mn fund is planning 11 investments in 2H 2022, he added. The fund is also raising the ticket size per transaction to USD 20 mn from USD 5 mn.

Wa’ed’s track record for sustainable investing: The oil giant’s VC arm has invested in four Saudi climate-focused startups since 2017 — Red Sea Farms (USD 10 mn funding round), Bio Organic (undisclosed), Sadeem (USD 2.6 mn funding round) and Smart Control (undisclosed).

THAT’S NOT ALL-

Aramco signed an MoU with Formula Motorsport Ltd. to use low-carbon fuel (such as natgas and hydrogen fuel) in Formula 2 and 3 races starting next year, according to a Formula Motorsports statement. The agreement with Aramco, which is Formula 1’s global partner, is subject to FIA World Motor Sport Council approval. Under its emission-reduction plans, the sport company is working to have all race cars 100% powered by sustainable fuels by 2026 and reach net-zero by 2030.

Phase ‘B’ of the 900-MW of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai is now complete, according to a statement issued on Friday by China’s Shanghai Electric, the project’s contractor. Work on phase ‘C’ is said to be “well underway” and on track to be completed in 2023.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Egypt is exploring partnerships with Maersk and Siemens to localize and accelerate the adoption of green fuel in the country, a cabinet statement tells us.
• The Dubai Electricity and Water Authority (DEWA) research and development center has registered a patent for a robotic carrier to move solar PV panels, glass panels or other “sensitive” materials, according to a WAM statement.
• Saudi Arabia and Eni are strengthening ties, signing last week an MoU to cooperate on “sustainable mobility, circular economy and specialty conversation chemical,” the Italian energy company said in a statement Saturday, without providing further details.
• Schneider Electric published its sustainability report for 2Q2022, with the company having made significant movement on its sustainability targets, according to a statement. The company had made six long-term commitments to SDGs from 2021-2025 in the areas of climate, resources, trust, equality, community building and hiring options. Check out the full 2Q2022 results here (pdf).

That USD 8.5 bn in climate finance for South Africa? It’s going to have to pay back more of it than it first thought: Around 80% of the USD 8.5 bn pledged by wealthy nations to help South Africa reduce its emissions will be made up of low-interest loans, rather than grants, Reuters quotes a South African official as saying.

Background: The US, EU, Britain, France and Germany last year committed to providing the money over three to five years to help the African nation upscale its solar and wind-generation capacity and reduce its heavy reliance on coal. But while South Africa had mainly asked for grants, international lenders are primarily offering loans — a sizable chunk of which may not be given due to the country’s preference for using local companies and workers. A proposed USD 1 bn facility from the European Investment Bank, for example, is up in the air because the bank doesn’t lend money to projects that favor local contractors.

OTHER STORIES FROM AROUND THE WORLD WORTH KNOWING ABOUT-

• The OPEC Fund for International Development provided USD 40 mn in debt and equity investments to the eastern and southern African Trade and Development Bank to support sustainable development across the continent, according to a statement.
• Electric rickshaws and mopeds are accelerating India’s renewable energy transition, the New York Times reports. Over 430k EVs were sold by Indian automakers from March 2021-March 2022 — over three times as many as the previous year — and all but 18k of these were two and three-wheeled vehicles.

Wildlife on the move in Zimbabwe: Zimbabwe began moving more than 2.5k animals from a southern reserve to another one further up north to protect them from prolonged drought, NPR writes. This is the first time in 60 years that the country has resorted to such measures to protect its wildlife. Project Rewild Zambezi is relocating 400 elephants, 2k impalas, 70 giraffes, 50 buffaloes, 50 wildebeest, 50 zebras, 50 elands, 10 lions and a pack of 10 wild dogs. “For years we have fought poaching and just as we are [emerging victoriously in] that war, climate change has emerged as the biggest threat to our wildlife,” spokesman of the Zimbabwe National Parks and Wildlife Management Authority told NPR.