Tuesday, 4 October 2022

Abu Dhabi’s Masdar has a ton of appetite to grow its portfolio worldwide

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, wonderful people. If it’s Tuesday, it must be another GCC acquisition spree.

THE BIG CLIMATE STORY in our corner of the world- UAE’s Masdar is working on a massive global expansion of its portfolio through acquisition. The company is looking at solar, wind, waste-to-energy and geothermal projects.

ALSO- Egypt’s Senate will discuss a bill today establishing a new regulatory body whose purview includes setting policy for the assembly of EVs. This comes as the country’s Interior Ministry issued separate rules that will allow car owners to convert their gas and diesel-powered vehicles to electric or hybrid vehicles.

^^ BWe’ve got chapter and verse on these stories and more in today’s news well, below.


THE GREAT DEBATE- Qatar is not too upset about Europe loosening guidelines on a greener future: “Many countries, particularly in Europe, that had been strong advocates of green energy […] have made a sudden and sharp U-turn,” Energy Minister and QatarEnergy CEO Saad Al Kaabi said on Thursday at a liquefied natural gas (LNG) conference in Japan, Reuters reports. He emphasized that coal burning is again on the rise and at its highest level since 2014.

Al Kaabi stressed the need for more investment in “transition fuels” such as LNG: “The lack of such investment is putting a heavy burden on both producers and consumers. Producers must find supplies that may not exist due to the lack of investment,” he added.

The GCC is playing the long game by keeping renewables as the end goal: While LNG agreements are being signed right and left, Al Kaabi said that more investment has to flow into renewables, pointing to projects in Qatar including the world’s largest blue ammonia plant, investments in solar, and carbon capture innovations, state-run QNA reported.

THE COUNTDOWN TO COP (34 days to go)-

THE BIG CLIMATE STORY OUTSIDE THE REGION- Activist groups are stepping up pressure on business and governments ahead of COP27 — and you can expect that trend to accelerate in the weeks to come.

UP FIRST- Has the World Bank ‘misplaced’ up to USD 7 bn in climate funding? That’s the contention of an Oxfam report (pdf) that’s getting ink from the Guardian this morning. As much as USD 7 bn out of USD 17.2 bn in climate funding disbursed in 2020 could not be accounted for, Oxfam claims, following an independent audit. This is the second time in as many weeks that the World Bank has come under fire over climate, after its president David Malpass refused to acknowledge that climate change is a human-driven phenomenon.

NEXT UP- Are BP’s flaring emissions underreported in Iraq? That’s the claim in Big oil’s dirty secret in Iraq by Unearthed, a report by activist outfit Greenpeace that draws on a recent investigation by the BBC. Iraq’s Rumaila oilfield — one of Iraq’s largest and operated by BP — flared 3.4 bn cubic meters of gas last year, emitting 9.5 mn tons of CO2 equivalent (or “CO2e”), Greenpeace claims. Their report cross-references World Bank flaring figures with those of other organizations.

BP doesn’t count flare gas produced at Rumaila’s oilfield among its emissions. Why not? As the lead contractor at Rumaila, BP does not have a production sharing agreement, which is standard practice in other oilfields. Instead, the report claims, the oil giant is contracted by the Iraqi government annually for extraction services.

SOUND SMART- What’s flare gas? Flare gas is excess gas — primarily consisting of methane — that is emitted and set alight during oil production. Flare gas is common in Iraq, which doesn’t have the resources to process excess gas in flare gas-to-energy projects. Flaring gas is bad for the environment — and for the people who live nearby, the report notes.

Go deeper: Tap or click here for our full explainer on flare-gas-to-energy.

AND FINALLY: The Elders have spoken. Developed economies should go beyond promises of doubling climate adaptation by 2025, leaders of the Elders group said in a statement yesterday. The group — which was founded by the late Nelson Mandela — published a call to action ahead of COP27, urging rich nations to “agree on a roadmap for delivery, provide evidence of action, and be held accountable for their commitments.” They’re also calling, as Egypt recently did, for funding for climate-caused “loss and damage” in developing economies.

Who are The Elders? They include former UN Secretary General Ban Ki-moon, the first female president of Ireland Mary Robinson, and former president of Liberia and Nobel Peace laureate Ellen Johnson Sirleaf, among others.

YOU’RE READING ENTERPRISE CLIMATE, the essential regional publication for senior execs who care about the world’s most important industry. Enterprise Climate covers everything from finance and tech to regulation, products and policy across the Middle East and North Africa. In a nod to the growing geographical ambitions of companies in our corner of the world, we also include an overview of the big trends and data points in nearby countries, including Africa and southern Europe.

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HAPPENING TODAY-

The two-day Green Energy Africa conference will kick off today in Cape Town, South Africa. The event aims to bring together executives, investors, utility firms, and government leaders to drive investment in Africa’s renewable and low carbon sector. You can register for the event here.

CIRCLE YOUR CALENDAR-

UN’s NZAOA to host virtual forum on blended finance for climate investments in EMs: The Net-Zero Asset Owner Alliance (NZAOA) will discuss blended finance for climate investment in emerging markets and developing economies on Wednesday, 5 October, ahead of the IMF-World Bank Annual Meetings next week. (Blended finance = using development finance to leverage private capital for countries’ sustainable development plans.) You can register for the event here.

The IMF and World Bank will hold their annual meetings in Washington, DC, on 10-16 October.

Closer to home, the International Exhibition of Renewable Energies, Clean Energies and Sustainable Development take place from 24-26 October in Oran, Algeria. The event will include panels focusing on energy efficiency and energy saving, startups’ role in the energy transition, and the bankability of renewable energy projects.

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

M&A WATCH

UAE’s Masdar is working on a massive global expansion through M&As: state-owned Abu Dhabi renewables giant Masdar is planning on growing its renewables portfolio through a string of global acquisitions, Fawaz Al Muharrami, the company’s acting executive director for clean energy, told The National in an interview. “If there is a good [project] in Europe, in Apac [Asia-Pacific] [we] will be seeking to acquire those projects,” he noted.

Where does it have appetite? “The key focus will primarily be on renewables, mainly solar and wind, but we are also developing a waste-to-energy plant and [looking at] some geothermal projects … in the near future,” Al Muharrami told the newspaper.

Masdar already likes its geographic footprint — this is about going deeper: The company has assets in more than 40 countries, with a combined renewables capacity of 15 GW and investments worth USD 20 bn deployed, Al Muharrami noted. Most recently, the company signed an agreement with Germany’s RWE Renewables to explore wind projects, and is supplying Tanzania with up to 2 GW of renewables capacity.

Masdar’s target: Growing its capacity to 100 GW over the next 10 years, Al Muharrami said.

The company also has appetite in the region and at home through new partnerships and tenders. Masdar will “definitely participate” in Saudi Arabia’s solar and wind tender announced last month, Al Muharrami said. The company is also developing the 2 GW Al Dhafra solar power plant in Abu Dhabi, which it claims will be the world's largest solar plant. The plant is expected to be operational at the beginning of next year, he said.

With a particular focus on green hydrogen: A consortium made up of Masdar and our friends at Hassan Allam Utilities signed an agreement in April to establish green hydrogen plants that can produce up to 480k tons of green hydrogen a year in Egypt’s Suez Canal Economic Zone. Masdar also signed an agreement in January with our friends at Fertiglobe and France’s Engie to co-develop a green hydrogen facility in the UAE.

Appetite for growth is being driven by a shakeup of Masdar’s shareholder structure over the summer: Abu Dhabi National Energy Company (Taqa) bought a 43% stake in Masdar’s renewable energy business, while Abu Dhabi National Oil Company (Adnoc) acquired a 24% stake back in June. “With new shareholders … Masdar is drafting a completely whole new strategy for the growth of the company,” Al Muharrami added.

LEGISLATION WATCH

One giant leap for EVs in Egypt?

SMART POLICY- Egypt is looking at legislation to promote the use of EVs: Egypt’s Senate (the country’s upper house of parliament) will discuss today a bill that would establish a new regulatory body that will set policy for EVs assembly in Egypt, Mohamed Halawa, who heads up the senate’s industry and trade committee, told reporters on Sunday. The bill also establishes a new fund that will provide financial incentives and facilities for EV assembly, he noted. We expect the legislation to be a key component of Egypt’s long-awaited automotive strategy — dubbed the Automotive Industry Development Program (AIDP) — which has made local EV assembly a key cornerstone.

Enter the Supreme Council for Vehicle Manufacturing: This new council, which will be headed by the prime minister, will draft policies, strategies, regulation and legislation governing the wider automotive industry, including EVs.

The main event, however, is the EV finance fund. The fund’s primary role would be to provide financing and incentives to investors looking to get in on local EV assembly in Egypt. The fund, which will be headed by Egypt’s finance minister, will also provide funding for industry-relevant research and development on electric vehicle tech.

Background: Egypt has for years been trying to get its local automotive assembly to be more competitive than regional rivals Turkey and Morocco. The latest iteration of its auto strategy, which launched back in March, made EVs a key priority. AIDP promises cash incentives of up to EGP 50k for buyers of locally-assembled EVs, while mandating that real estate developers build a certain number of charging points at their residential and commercial projects. The strategy also includes enlisting international partners to produce locally assembled electric cars in state-owned El Nasr Auto’s factory. El Nasr is expected to sign the final contracts this month. Egypt also set tariffs motorists will pay to charge EVs back in February.

Private sector buy-in: When the strategy was announced, auto industry players were hopeful that it would succeed in promoting a local EV market, but thought further tweaks were needed. Halawa told reporters on Sunday that this legislation included input from key auto players, including GB Auto, Abu Ghali Motors, Mansour Automotive, Toyota Egypt and Ezz Al Arab.

WAIT, THERE’S MORE-

Egyptians can now turn their gas- and diesel-powered cars into EVs: Egypt’s Interior Ministry issued separate regs that will allow car owners to convert their gas and diesel-powered vehicles to electric or hybrid vehicles, according to the Official Gazette. Car owners must obtain a permit to convert their car engines from the Trade and Industry Ministry. Shift EV is the industry leader here in conversions, using proprietary battery technology to convert fleets for companies.

CARBON CAPTURE

There’s an idea…

SMART POLICY- Sharjah wants to turn depleted wells into carbon capture facilities: UAE state-owned gas producer Sharjah National Oil Corporation (Snoc) is mulling turning some of its depleted gas reservoirs into carbon capture and storage sites, Masoud Ahmed Al Hamadi, the company’s exploration and production manager, told Dubai-based energy consultancy Gulf Intelligence (GI) in an interview last Wednesday (watch, runtime: 12:55). Snoc has around 50 wells from depleted gas reservoirs that can be utilized to store captured carbon, including Sajaa — the largest of these depleted wells, Al Hamadi told GI.

SOUND SMART- Depleted gas wells can be ideal for carbon capture given their storage capacity: They’re sturdy enough to effectively hold the gas — existing infrastructure, including pipelines to store and transport gas, can be repurposed to store and ship CO2, according to a study (pdf) published by the Global Carbon Capture and Storage Institute (CCSI).

This isn’t the UAE’s first stint in carbon capture: The first commercial-scale carbon capture and storage plant in the region was established in the UAE in 2016. The plant was developed by Adnoc and currently has the capacity to capture 800k tons of CO2 annually. “The region is well positioned to become a leader, both in the CCS market and the energy transition more broadly,” CCSI global CEO Jarad Daniels said at the inauguration of CCSI’s MENA HQ in Masdar City last month.

But it hasn’t picked up across MENA, and that’s due, in part, to a lack of regulation. But that may be changing: “Europe has started to change the regulations now […] and the Middle East is coming soon, and hopefully the UAE, too,” Al Hamadi said.

Can’t discount the high costs: Substantial investments will be required to push down the cost of carbon capturing and storage projects in the region, he added.

CLIMATE FINANCE

Abu Dhabi’s Global Mission sets up USD 17 bn SDG fund

Abu Dhabi-based non-profit organization Global Mission is looking to raise USD 17 bn for the Global Fund for Sustainable Development, state news agency WAM reports. The fund, which will be based in the Abu Dhabi Global Market, aims to commit USD 1 bn to each Sustainable Development Goal (SDG), executive director of operation and administration at Global Mission Mohamed Elsamad told WAM. It will work with 100 projects from around the world during its first year, he added, noting that the projects would be implemented through public-private partnerships (PPPs).

There’s a lot we don’t know about the fund, starting with who its raising money from. So far, there are very few details about how the fund will operate and who the global partners that the fund has contracted are. The project’s director was clear that the fund will be global, serving projects in different regions, with emphasis on creating impact.

IN OTHER CLIMATE FINANCE NEWS-

Dubai says its will earmark AED 40 bn (USD 10.8 bn) for renewable energy projects, Zawya quotes Ahmed Buti Al Muhairbi, the Secretary-General of the Dubai Supreme Council of Energy, as saying during the World Green Energy Summit in Dubai last week. Al Muhairbi did not specify the timeframe of the investment, nor whether the renewable energy projects will be exclusive to Dubai.

ON THE RETAIL SIDE OF THINGS-

The Bank of Bahrain and Kuwait (BBK) is now providing sustainability financing for retail customers looking to adopt energy-saving technology and renewable energy sources in their houses, a BBK statement details.

ON YOUR WAY OUT

A 3D-printed pedestrian smart bridge designed in the UAE made its debut at Autodesk University 2022 conference in New Orleans last month, the 3D Printing Media Network reported. The 5m bridge prototype — which utilizes AI, robotics and digital twin technology — was designed by Lebanese engineering company Dar Al-Handasah in partnership with the USD-based software company Autodesk.

It’s not only 3D-printed — it’s also smart: Digital twin technology allows the companies to use real-time data to track how the bridge will perform and deal with strains over time. “The smart bridge [combines] evolutionary designs, recyclable materials with a low carbon footprint, and the latest technology that can create and transform a state structure into a smart one, linked to an interactive artificial intelligence system with the ability to monitor, report, and take action,” director of the structures and IT departments at Dar Al Handasah Charles Malek said.

CALENDAR

OCTOBER

3-4 October (Monday-Tuesday): Pre-COP27 Climate Summit, Kinshasa, Congo.

4-5 October (Tuesday- Wednesday): Green Energy Africa, Cape Town International Convention Centre 2, South Africa.

16-21 October (Sunday-Friday): Arab Conference of Plant Protection, Le Royal Hotel, Hammamet, Tunisia.

24-26 October (Monday-Wednesday): International Exhibition of Renewable Energies Clean Energies and Sustainable Development, Centre Des Conventions Mohammed Ben Ahmed, Oran, Algeria.

31 October (Monday): Deadline for proposals for Jordan’s USD 2 bn Aqaba-Amman desalination project.

Approval of EU draft document pushing countries participating in COP27 to to improve their climate change targets.

NOVEMBER

Sustainability Forum Middle East is taking place in Bahrain.

Nigeria hopes to secure USD 10 bn support package for green energy transition before COP27.

7-18 November (Monday-Friday): Egypt will host COP27 in Sharm El Sheikh.

23-24 November (Wednesday-Thursday): Global Conference on Sustainable Partnerships, The Ritz-Carlton, Riyadh, Saudi Arabia.

Deadline of bid submissions for the Ras Mohaisen – Baha – Makkah Independent Water Transmission Pipeline in Saudi Arabia.

COP27 sub-events:

Terra Carta Action Forum (2 days) organized by the Prince of Wales’ Sustainable Markets Initiative.

UNFCCC’s capacity building hub.

DECEMBER

13-15 December (Tuesday-Thursday): International Renewable Energy Congress, Hammamet, Tunisia.

15 December (Thursday) The UN’s 15th meeting of the Conference of the Parties to the Convention on Biological Diversity (COP15), Montreal, Canada.

JANUARY 2023

14-21 January (Saturday-Saturday): Abu Dhabi Sustainability Week takes place in the UAE.

16-18 January (Monday-Wednesday): EcoWASTE, Abu Dhabi National Exhibition Center (ADNEC), UAE.

FEBRUARY 2023

6-8 February (Monday-Wednesday): Saudi International Marine Exhibition and Conference, Hilton Riyadh, Saudi Arabia.

The second edition of The Arab Green Summit (TAGS), Dubai, UAE

MARCH 2023

15-19 March (Wednesday-Sunday): Qatar International Agricultural and Environmental Exhibition, Doha, Qatar.

JUNE 2023

1-3 June (Thursday-Saturday): Envirotec and Energie Expo, UTICA, Tunis, Tunisia.

SEPTEMBER 2023

Chariot Limited and Total Eren’s feasibility study on a 10 GW green hydrogen plant in Mauritania to be completed.

NOVEMBER 2023

6-17 November (Monday-Friday): The UAE will host COP28.

EVENTS WITH NO SET DATE

End-2022

KSA’s Neom wants to tender three concrete water reservoir projects to up its water storage capacity by 6 mn liters.

2023

Early 2023: Egypt’s KarmSolar to launch KarmCharge, the company’s EV charging venture.

Mid-2023: Sale of Sembcorp Energy India Limited to consortium of Omani investors to close.

Phase C of the 900-MW of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai to be completed.

Saudi Basic Industries Corporation (Sabic) steam cracker furnace powered by renewable energy to come online.

2024

End-2024: Emirati Masdar’s 500 MW wind farm in Uzbekistan to begin commercial operations.

QatarEnergy’s industrial cities solar power project will start electricity production.

First 1.5 GW phase of Morocco’s Xlinks solar and wind energy project to be operational.

2025

Second 1.5 GW phase of Morocco’s Xlinks solar and wind energy project to be operational.

UAE to have over 1k EV charging stations installed.

2026

1Q 2026: QatarEnergy’s USD 1 bn blue ammonia plant to be completed.

End-2026: HSBC Bahrain to eliminate single-use PVC plastic cards.

Iraq’s Mass Group Holding wants to invest EUR 1 bn on its thermal plant Mintia in Romania to have 62% of run on renewable energy, while expanding its energy capacity to at least 1.29k MWh.

2027

MENA’s district cooling market is expected to reach USD 15 bn.

2030

UAE’s Abu Dhabi Commercial Bank (ADCB) wants to provide AED 35 bn in green financing.

UAE targets 14 GW in clean energy capacity.

Tunisia targets 30% of renewables in its energy mix.

Qatar wants to generate USD 17 bn from its circular economy, creating 9k-19k jobs.

Morocco’s Xlinks solar and wind energy project to generate 10.5 GW of energy.

2035

Qatar to capture up to 11 mn tons of CO2 annually.

2045

Qatar’s Public Works Authority’s (Ashghal) USD 1.5 bn sewage treatment facility to reach 600k cm/d capacity.

2060

Nigeria aims to achieve its net-zero emissions target.

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