The GCC can’t get enough of its renewables M&A spree.

Good morning, wonderful people. It was a slow news day yesterday, but we’re not complaining. It gave us plenty of time to discuss how the UK government is working on climate change in Egypt. Among those with whom we had the chance to speak was UK Ambassador to Egypt Gareth Bayley.

*** Take our EV survey: Are you an ex-petrolhead shopping around for your first electric vehicle? EV-curious and wondering what all the fuss is about? Or are you not ready to say goodbye to that sweet smell of benzene as you wait at the gas station?

We want to hear from you: We’re taking the pulse on how the nation feels about Egypt’s nascent EV transition. Take a few minutes to fill out our short survey. We’ll be back with the results in a couple of weeks.

MEANWHILE- The British Embassy in Egypt launched its Climate Finance Accelerator (CFA) program yesterday. The GBP 10.8 mn, four-year technical assistance program will build a pipeline of bankable low-carbon projects and give them access to financing. Piloted in Colombia, Mexico and Peru, the CFA is now looking to expand in Egypt, Nigeria, Pakistan, South Africa and Turkey. The program — which is looking to select 8-12 projects — is currently accepting proposals for projects seeking USD 1 mn in funding. You can apply here through 16 October.

Who is involved? The program is funded by International Climate Finance (ICF) through the UK government’s Department for Business, Energy and Industrial Strategy. It is being delivered locally by PricewaterhouseCoopers UK, and implemented by Genesis Analytics and Acumen Consulting Egypt.

Egypt’s FRA and UK’s FDS Africa also signed an MoU on environmental ins. at the ceremony: Egypt’s Financial Regulatory Authority and the UK’s Financial Sector Deepening Africa signed an MoU to explore ins. products for issues pertinent to the environment. More on all of this in the embassy’s press release (pdf) on the event, out overnight.

We also sat down with UK Ambassador to Egypt Gareth Bayley for a talk about King Charles III not attending COP27 in person and how newly-appointed UK Prime Minister Liz Truss will tackle climate development finance for Egypt.

We’ll have the complete story for you in tomorrow’s issue of Enterprise Climate.

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THE BIG CLIMATE STORY- It’s got to be UAE’s Multiply Group acquiring an 80% stake in UAE-based International Energy Holding Company. The conglomerate, which is involved in several businesses ranging from media to mobility, is moving forward with its plan to expand its investments in clean energy globally.

ALSO- The GCC has the potential to collect almost 90% of solid waste and recycle 75% of it by 2040, but to achieve this, the region would require a whopping USD 130 bn in investment.

^^We’ve got chapter and verse on these stories in the news well below.

WORTH READING- Lebanon’s transition to renewables is stifled by rampant scamming: Lack of developed solar energy infrastructure and high installation costs In Lebanon are giving way to fraudsters who are duping households into buying defunct and defective solar panels, Reuters wrote yesterday. Additionally, low-quality solar energy parts and installation have also been spreading throughout the country. This is particularly sad considering how many in Lebanon have been turning to solar panels to combat the ongoing energy crisis in the Levantine country.

WATCH THIS SPACE- Saudi and Lucid continue to get closer: The Saudi Industry Minister met with Peter Rawlinson, the CEO of US EV manufacturer Lucid, in the US to discuss investment and trade, state news agency SPA reported. Back in February, Lucid Motors and Saudi Arabia signed an agreement to build a full production plant in the kingdom that could possibly earn the EV manufacturer USD 3.4 bn over 15 years. Construction of the facility, which targets producing 150k vehicles per year, began in May, according to a statement. In April, Lucid and Saudi Arabia also signed an agreement for the purchase of 100k vehicles over a ten-year period.

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THE COUNTDOWN TO COP (33 days to go)-

90 country leaders have confirmed attending COP27 so far, Reuters reported on Monday. The heads of state will join six roundtables in addition to traditional plenary meetings, the news agency quotes Egypt’s special representative for the COP27 presidency, Wael Aboulmagd, as saying. The roundtables, which will be held on 7-8 November, will include the development of green hydrogen, water, food security, the energy transition and vulnerable communities.

Bezos wants to establish a land restoration coalition: Jeff Bezos’ environmental fund Bezos Earth Fund (BEF) wants to build a European-African coalition around COP27 to increase land restoration efforts in Africa by 2030, BEF’s chief executive Andrew Steer said during the Reuters Impact conference last week. The initiative — AFR100 — is led by an African Union agency and aims to reverse deforestation and land degradation on 100 mn hectares of African soil. BEF, the African Development Bank, Germany and other stakeholders called at COP26 to mobilize USD 2 bn by COP27.

HAPPENING TODAY-

UN’s NZAOA hosts its virtual forum on blended finance for climate investments in emerging markets today: The Net-Zero Asset Owner Alliance (NZAOA) will discuss blended finance for climate investment in emerging markets and developing economies, 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.

CIRCLE YOUR CALENDAR-

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

The Cairo Water Week 2022 will kick off on Sunday, 16 October and run for four days. Discussions will revolve around climate change strategies and development plans, sustainable financing solutions, as well as water recycling, among other topics.

The International Exhibition of Renewable Energies, Clean Energies and Sustainable Development will 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.

ADX-listed Multiply Group acquired an 80% stake in UAE-based International Energy Holding Company, a subsidiary of International Holding Company (IHC), it announced in a statement yesterday. Multiply is a conglomerate with businesses in sectors ranging from media to mobility; it’s now looking to grow its investment in clean energy globally. “The industry offers strong growth potential as the world transitions towards clean and renewable energy,” said Multiply CEO Samia Bouazza. The other 20% of IEH has been acquired by IHC subsidiary Alpha Dhabi Holding.

What’s IHC? IHC has holdings in nine industries, from finance to real estate, food and beverages, agriculture, industry, utilities, and healthcare — and it’s now diving deeper into renewables. Back in August, IHC purchased 50% of Turkey’s Kalyon Enerji for approximately USD 517 mn through its subsidiary International Energy Holding. The Turkish company has several solar and wind projects — ongoing and in the pipeline — serving over 2 mn people.

GO DEEPER- The high-profile Abu Dhabi company is chaired by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security advisor and a leading figure in the business community. Sheikh Tahnoon, the brother of UAE President Sheikh Mohamed bin Zayed, chairs high-profile corporations including Abu Dhabi sovereign wealth fund ADQ, lender FAB and Royal Group, among others.

What they said: Multiply Group’s acquisition “reflects [a] strategy to build up utilities vertical which has contributed to [the group’s] financial performance,” Bouazza added. Multiply Group will use IEH “to continue expanding its utilities and energy investments globally,” the company said in the statement.

Multiply has a green M&A track record: In 2021, the company acquired a 100% of Pal Cooling Holding, a UAE-based district cooling solutions provider. In March of 2022, the conglomerate invested in the Dubai Electricity and Water Authority’s (DEWA) IPO nearly USD 100 mn. 6 months later, the conglomerate acquired a 7.3% stake in the Abu Dhabi National Energy Company PJSC (TAQA) for USD 2.7 bn.

Abu Dhabi is pushing hard into renewables around the world — and others in the region are following suit: State-owned Abu Dhabi giant Masdar is planning on growing its renewables portfolio through a string of global acquisitions, the company announced last Monday. The Qatar Investment Authority (QIA) is also getting with the programme. The fund recently announced spending EUR 2.4 bn on major German utilities provider RWE in a debt-to-equity swap that will eventually see QIA own 9.09% of RWE.

The cost of the GCC going full circular: The GCC has the potential to be a powerhouse in the circular economy, with the ability to collect almost 90% of solid waste and recycling around 75% of waste across all sectors of the economy by 2040, according to a recent study (pdf) by the World Business Council for Sustainable Development (WBCSD) and Boston Consulting Group (BCG). To achieve this, the study found that the region would require a whopping USD 130 bn in investment. It would also need clear regulations and financial incentives, paired with joint action between the public and private sectors.

Why would the GCC bother? The region stands to increase its GDP by USD 95-105 bn, while adding around 300k jobs, the study found. And that’s just from recycling plastic, concrete and cement, metal, and bio-waste. Recycling typically creates on average more than 50x as many jobs as landfilling and incineration. Additionally, it will allow the GCC to trade more easily with countries that have environmental regulatory pressures and carbon border taxes. Biowaste recycling could help mitigate reliance on fertilizers manufacturing and imports.

Not to mention the obvious environmental benefits, including potentially slashing 1-1.5 bn tonnes of CO2 emissions by 2040.

Especially when considering that the GCC generates between 150-190 mn tonnes of waste annually. Large infrastructure and real estate development projects currently account for the largest waste volumes. Cement and concrete, plastic, metal and bio-waste make up approximately 70% of the region’s waste.

How should this USD 130 bn be deployed? The study estimates that the region needs USD 60-85 bn invested in four key waste streams (plastic, concrete and cement, metal, and bio-waste) over the next 20 years to cover design, collection, sorting and recycling to meet its circularity targets. 65% would go into developing and deploying technology in recycling and expanding recycling capacity, while 20% would go into collection, 10% for sorting and 5% for product design.

The hurdles: With the exception of a handful of large urban centers, the region’s waste management sector remains fragmented, largely managed by small-scale collection companies. There is also an absence of consistent data on waste. Material sorting at source remains minimal in most of the GCC, including in large urban centers, which results in the contamination of waste streams and increases the costs of sorting.

Tighter regulation needed: GCC countries lack comprehensive regulatory frameworks promoting recycling in all sectors, and even those that do may not implement them fully due to weak environmental legislation and enforcement. Additionally, GCC consumers lack awareness about circularity and education about waste separation and plastic pollution.

The economics of recycling are obviously harder: There is also an absence of financial incentives, including low costs for landfilling compared to recycling discourage recycling.

KSA and the UAE produce the most waste, but are also the most active in trying to adopt the circular economy: Both countries account for roughly 75% of the region’s waste. That said, both countries are making strides to change that.

The UAE has adopted a Circular Economy Strategy, while Dubai issued the Dubai Green Building System — a set of regulations to increase recycled content in construction. Not to mention the slew of new recycling projects being pushed, including Sharjah, where Beeah Group announced a new commercial and industrial recycling facility, which utilizes a robotics and AI system to automatically detect, identify and separate different kinds of waste. The facility will process 156k tons of mixed recyclables annually once it is fully operational. This week, the Abu Dhabi Waste Management Centre (Tadweer) reported that it has produced more than 1 mn tons of products from recycled waste materials collected from the Emirate in 1H2022

Meanwhile, Saudi Arabia has pushed forward its Circular Carbon Economy National Program. KSA has published targets to divert 82% of all landfill waste — for which it has earmarked USD 27-32 bn, recycle 42% and compost 35% by 2035. The Kingdom’s Public Investment Fund (PIF) intends to invest USD 11 bn by 2035 to increase recycling, with the support of the Saudi Investment Recycling Company (SIRC). The targets of other countries are not mentioned in the report.

AND IF ALL ELSE FAILS, TURN THAT WASTE INTO ENERGY-

Kuwait Municipality has approved a refuse-driven fuel (RDF) project to power up its main cement production plant, Kuwaiti daily Al Qabas reported, citing sources close to the matter. The project will utilize solid, non-biodegradable waste to feed kilns at the Kuwait Cement Company (KCC) for further cement production. The media outlet did not mention the project cost.

What we know about the project: It is expected to be completed within 18 months of signing the contract, and will probably be built near a waste site at Abdallah Port. KCC will act as the project’s investor and manager for 20 years, during which it will produce biogas, biofuel, fertilizers and other products.

Nestlé will invest USD 1 bn to save coffee from climate-related threats. The world’s largest coffee company, Nestle, has committed to investing upward of CHF 1 bn (USD 1 bn) to encourage sustainable farming among suppliers, as farmers contend with extreme weather and other climate change-related challenges, Bloomberg writes. The Swiss company, which works with upward of 500k farmers, will train them on best planting techniques and offer them cash incentives to take action to mitigate crop threats to improve soil health, plant fertility and optimize water usage. The company is looking to source all of its coffee responsibly by the middle of this decade, up from 82% in 2021.

Coffee-arable land is shrinking due to extreme weather, and coffee growers are taking the hit, as we noted last week. One estimate predicted that the area suitable for growing coffee will shrink by almost 50% by 2050. Coffee growers have been among the most impacted by climate change, leading some foodtech innovators to explore beanless coffee, which uses upcycled plant-based ingredients like sunflower seed husks and watermelon seeds (please, God, save us from Frankenfoods). Droughts followed by severe, unseasonal frost earlier this year in Brazil’s coffee-growing regions slashed the country’s arabica harvests by 40% and damaged trees, making it likely that next season’s harvest will be affected as well.