Saudi Arabia’s sovereign wealth fund had a very good debut green bond issuance.

Good morning, wonderful people. And to our readers in Egypt, who are celebrating Armed Forces Day, we hope you have a relaxing three-day weekend. Elsewhere, it’s been a day of firsts.

THE BIG CLIMATE STORY- Saudi Arabia raised USD 3 bn in its inaugural green bond issue yesterday. The long-awaited three-tranche issue drew in orders of around USD 18 bn throughout the day.

It also saw the sale of the world’s first 100-year green note. We breakdown the sale in this morning’s Debt Watch, below.

ALSO- A big step for the regional EV industry: The UAE inaugurated its first EV assembly facility in Dubai yesterday, courtesy of M Glory Group. The AED 1.5 bn Al Damani Auto EV plant can currently assemble 10k cars annually with plans to raise production to 55k per annum in the next two years. We cover the story chapter and verse in the news well below.

*** SPEAKING OF WHICH- 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 region feels about MENA’s EV transition. Take a few minutes to fill out our short survey. We’ll be back with the results in a couple of weeks.

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WATCH THIS SPACE- MENA is focusing on the role of ins. in the fight against climate change: The ins. industry must adapt to new climate risks and extend assistance to governments, officials from both the UAE and Egypt stated at two separate conferences this week. “The ins. sector plays a key role in our fight against climate change risks,” the UAE’s Minister of Climate Change and the Environment, Mariam Al Mheiri stated yesterday at the Fifth National Dialogue for Climate Ambition (NDCA).

In Egypt, the Finance Ministry is tooting a similar horn: The Egyptian government is keen to offer all forms of support to the ins. industry, including tax breaks, and making climate ins. mandatory, according to a speech given by Finance Minister Mohamed Maait at the Ins. Federation of Egypt’s (IFE) event on Tuesday. Maait encouraged ins. companies to contribute to a green transition by investing in green bonds, according to Ahram Online.

And Egypt is walking the talk: Egypt’s Financial Regulatory Authority (FRA) signed an MoU with FSD Africa on Tuesday to contribute to making Egypt’s financial sector more sustainable. This includes being innovative with climate-related ins. products, FRA Chairman Mohamed Farid said. The MoU will enable FSD Africa and the FRA to “directly engage with local [ins. providers] and pension funds to support integration of ESG factors in their strategy and operations,” a statement by the UK embassy noted on Tuesday.

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HAPPENING TODAY-

The Economist Impact’s “Sustainability Week: Countdown to COP27” event will take place today in Abu Dhabi. The First Abu Dhabi Bank event, which will be both in-person and virtual, will focus on the strategies governments and businesses should implement to realize climate targets, and the metrics that can be utilized to measure the successful achievement of climate goals.

A who’s who event: The event will be attended by bn’aire philanthropist Bill Gates, the UAE Industry and Advanced Technology Minister Sultan Ahmed Al Jaber, and US Climate Envoy John Kerry, The National writes.

CIRCLE YOUR CALENDAR-

The Egyptian Center for Economic Studies will be hosting a climate seminar on Monday, 10 October in Cairo. Speaking at the seminar is senior climate change advisor at the Sustainable Development Practice of the World Bank Stephane Hallegatte. The event will focus on the synergies and trade-offs between short-term economic and development goals. You can register for the event here.

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.

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

KSA’s debut green bond sale raised USD 3 bn: Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), sold USD 3 bn in green bonds yesterday, according to Bloomberg. The three-tranche sale — KSA’s first green bond offering — drew in orders of around USD 17.9 bn during the day, according to Reuters.

A breakdown of the sale: PIF sold USD 1.25 bn of its 5-year note at 125 bps over 5-year US treasuries, and another USD 1.25 bn in 10-year green bonds at 165 bps over 10-year US treasuries.

Saudi also issued the world’s first 100-year green note yesterday. It sold USD 500 mn at 6.7%.

The issue seems to have been 6x oversubscribed, drawing in USD 17.9 bn in orders. The 5-year tranche drew more than USD 9 bn in orders, while the 10-year bonds got over USD 7 bn in orders. The 100-year offering drew around USD 1.9 bn in orders. PIF was expected to sell around USD 500 mn of the 100-year notes, Reuters said.

PIF’s initial pricing: The 5-year bonds went on sale at 150 bps over the 5-year US treasuries while the 10-year tranche was initially priced at around 190 bps over the 10-year US treasuries. The 100-year offering initially went for around 7%-7.25%.

What the market said: "Issuance of green bonds appears to be accelerating which is welcome news for a region that has an important role to play in the global (energy) transition," said Dino Kronfol, Franklin Templeton's chief investment officer of global sukuk and MENA fixed income told Reuters. “Notwithstanding the recent increase in rates, they remain low by historical levels. Locking in term funding by selling century bonds will help PIF efficiently finance their multi-decade economic vision,” Doug Bitcon, head of credit strategies at Rasmala Investment Bank told Bloomberg.

The market’s strong appetite for MENA green bonds was expected: Analysts, including EFG Hermes’ head of Macroeconomic Research Mohamed Abu Basha and Arqaam Capital’s Associate Director Noaman Khalid, had predicted a successful sale in light of strong green bond offerings in other regional countries, despite market volatility in bond markets this year. Abu Dhabi Commercial Bank’s (ADCB) USD 500 mn bond sale drew USD 1.9 bn in orders last month. It followed Egypt’s successful sovereign sale back in 2020. For European and US investors in particular, “MENA will give them new exposure from a portfolio diversification point of view,” Khaled told us.

Advisers: BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs and JPMorgan are joint global coordinators and bookrunners, while HSBC, Credit Agricole, First Abu Dhabi Bank, Mizuho, SMBC Nikko, SNB Capital, Societe Generale and Standard Chartered are also bookrunners, with “11 more banks being in on the [transaction],” according to Reuters.

The first EV assembly facility in the UAE was inaugurated in Dubai yesterday, according to a statement from Dubai Industrial City. The AED 1.5 bn Al Damani Auto EV plant can currently assemble 10k cars annually but it plans to raise the production capacity to 55k cars per annum over the coming few years. The factory will likely produce two models of Al Damani DMV300, which has a battery capacity of 52.7 kWh and can cover more than 405 km on a single charge. M Glory Holding Group, which owns Al Damani Auto, began construction on the plant back in March, according to the National.

Exports from the plant a comin’: M Glory said at the time its EVs will be exported to the wider GCC region, Egypt, Tanzania, Senegal, Mali and Kenya.

The first of many: Nwtn Motors signed an agreement last month for an EV assembly facility that would produce 50k vehicles a year. Dubai’s Jebel Ali Freezone is also home to the region’s first EV and battery logistics hub operated by DHL and the Dubai EV green charger initiative is contributing to expanding the infrastructure to support a gradual transition to EVs.

Thanks to smart policy: The UAE has made EVs and other green technologies a crucial [art of its Net Zero 2050 Strategic Initiative. Earlier this year, Abu Dhabi launched its regulatory policy for EV charging stations with the aim of attracting investments in the sector and encouraging consumers to buy and drive EVs. The UAE’s charging station to vehicle ratio is among the world’s highest, with the aim to have over 1k stations by 2025, according to a 2021 report by Clean and Energy Business Council MENA.

Which has been getting widespread recognition: The UAE was ranked #8 in Arthur D. Little’s Global Electric Mobility Readiness Index (GEMRIX) (pdf) — the only MENA country to be featured.

AND MORE INFRASTRUCTURE SEEMS TO BE COMING ALONG-

Germany’s Siemens is looking to sign agreements to develop EV charging stations and other EV infrastructure in the UAE, chief executive of smart infrastructure at Siemens Middle East Franco Atassi told The National last week. In June, the German engineering group signed an agreement with the UAE’s Ministry of Energy and German carmaker Audi to build a network of EV chargers across the country in an effort to encourage higher EV adoption as the government builds out the country’s EV infrastructure. As part of the agreement, Siemens will set up 10 Sicharge D 160 kw ultrafast chargers on motorways in Ras Al Khaimah, Ajman, Umm Al Quwain and Fujairah.

WE GOT BIG ANNOUNCEMENTS ON THAT FRONT AS WELL FROM STARTUPLAND-

Kuwaiti Agility Ventures co-leads USD 40 mn investment round in US EV startup Loop: US-based EV charging station company Loop Global raised a USD 40 mn series A investment round, which was co-led by Kuwait-based Agility Ventures and US VC firm Fifth Wall, the logistics company announced Tuesday.

Oman is laying the groundwork for an ambitious energy program: Some 50 sq km of land in the central and southern regions of Oman have been allotted to the development of solar, wind and green hydrogen projects, the Oman Observer reported last week. Oman “has an abundance of land available that is ideal for these projects,” Industry and Investment Promotion Ministry under-secretary Asila Al Samsamiya said at an energy forum in the UK. She did not mention which specific projects the ministry is looking for.

But we do know that the country likes wind: At least five more major wind projects are for procurement between 2021 and 2027, she added.

And energy export is also on the agenda: “Our location offers a great competitive advantage as we are optimally suited to support shipments of local green fuels to markets in Asia, the Middle East and Europe,” Al Samsamiya added.

Generally, Oman has been adamant to get renewable projects off the ground. Only last week, the Oman Investment Authority (OIA) and Abu Dhabi-based investment company ADQ identified major investments in wind, solar and hydrogen among others, worth AED 30 bn according to a statement.

The UK sees Egypt as a potential renewable energy powerhouse — here’s why: The UK is convinced that Egypt should be able to export renewable energy to Europe. “It already exports gas, but the big dream is a direct pipeline of renewable energy right into Europe,” UK Ambassador to Egypt Gareth Bayley told us on the sidelines of the launch ceremony for the Climate Finance Accelerator (CFA) on Tuesday. Egypt has a very deep pool of bankable projects, particularly in renewables, he added, noting that UK development finance institution British International Investment dubbed Egypt as a powerhouse, putting it on the list of one of five markets around the world where it wants to be investing.

Here’s hoping: Egypt has traditionally been seen as a dev finance recipient country, but Bayley thinks it can be more. “I have never seen Egypt as a traditional recipient country. I think economically, we should discuss Egypt as a powerhouse and a country that can be a market leader rather than a market recipient,” he explained.

But for that to happen big finance and the private sector need to sit down: “I've seen climate champions like Mahmoud Mohieldin and Nigel Topping in action. They're not just marketing — they really are saying that there is an enormous amount of private sector capital searching for anything to show their shareholders that they've gone green,” Bayley said. In his eyes, it’s just a question of matchmaking at this point, which is what the CFA has come to do.

UK Prime Minister Liz Truss will continue to provide Egypt with development finance, Bayley reassured us. “It is such a straightforward subject that I don't think it’ll even be put on her desk. It's just going to get done,” he believes. “It is very clear to me that the British government's commitment to Egypt in climate and development financing is as it ever was.”

Now why isn’t King Charles III attending COP27 this year? Despite the king’s commitment to climate, the environment and his Sustainable Markets Initiative, he had to reflect on the balance between his global duties, his interests and being a monarch, Bayley said. “He has, however, said that he would like to be involved in some way to support Egypt in the run-up to the summit and perhaps be present remotely at COP27.”

There are a few other climate projects that the UK Embassy is going to be focusing on until the end of the year. The UK is looking into a couple of proposals to be funded through the International Climate Fund related to green hydrogen, the ambassador said. British International Investment is also launching the Care for Water Package, which looks at desalination and various other aspects of the water industry. The package will be announced at COP27 and is very closely aligned with the government’s NWFE plan, he tells us.

What is the CFA? The GBP 10.8 mn four-year technical assistance program will help build and identify a pipeline of 8-12 bankable low-carbon projects and give them access to financing. The program is currently accepting proposals for projects seeking USD 1 mn in funding. You can apply here through 16 October.

My name is Ahmed Ashour (LinkedIn) and I’m the CEO and cofounder of Egypt’s Pylon.

I started my professional career working at Sewedy Electrometer, a metering solutions and services firm that helps electricity, water and gas utility firms with revenue collection, network loss reduction and load management. As the commercial director of the company, I covered emerging markets, including the Philippines, Ethiopia, Brazil, as well as Egypt. I noticed a gap when it came to solutions and software developed and tailored for emerging markets.

This led my cofounder and I to build Pylon in 2017: When my cofounder Omar Rady and I were looking at data meter management for utility companies we looked at what was coming out of the big five players, including Siemens, Schneider, Oracle. We found that their offerings do not cater to the challenges we face in emerging markets. Electricity theft, for instance, is virtually unheard of in the developed world. It is quite prevalent in emerging markets. We then started building our product from there.

The main challenge for water and electricity providers are revenue losses stemming from structural inefficiencies. These losses amount to USD 2 bn per year in Egypt alone, and some USD 400 bn in EMs. The lost revenue is a consequence of inefficient revenue collection, electricity or water theft from tampering and leakages or technical losses.

How we tackle the efficiency gap: We provide software that is able to detect even the most technical systemic inefficiencies by analyzing copious amounts of data.

Globally deploying Pylon’s products would reduce carbon emissions from electricity grids by 25%, according to our calculations.

We also integrate renewable energy sources on the grid across the emerging markets we operate in. Similarly, by detecting leakages or technical losses happening across networks, we enhance energy efficiency.

There are three KPIs we focus on: On the operational side, we focus on our data collection and the efficiency of our solution on the ground. These metrics are crucial because they clarify how quickly we can scale our offerings through different utilities. On the commercial side, we focus on how fast we can land customers. We operate in a business with a long sales cycle, so being able to reduce this cycle is essential.

We raised a total of USD 19 mn in a seed funding round led by Endure Capital, Cathexis Ventures, Khwarizmi Ventures, LoftyInc Capital and a mix of angel investors, last April.

We bootstrapped Pylon from 2017 up until we joined startup accelerator YCombinator (YC) in 2021. The self-funded route was very tough, but we learned a lot from it. Joining YC proved to be a life-changing experience. They helped us navigate and overcome the challenges we faced, and enabled us to connect with a multitude of interested, high caliber investors. I think investors bring a lot to the table, including their perspective on what could go wrong. Having someone poke holes at your business and tell you what could go wrong is eye-opening.

Future and current funding plans: We originally planned to have another funding round again by the end of 2022, but, given the economic meltdown, we decided to put those plans on hold. We are currently actively raising debt and equity from different financial institutes, including commercial banks and development institutions.

Short term and long term goals: In the short term, we want to expand into new emerging markets. We currently operate in three countries and want to increase that number to seven developing countries. We also want to maintain our revenue growth levels of no less than 250% y-o-y. My long term goal is to be a “gigacorn” startup — one that reduces the world's emission by one gigatonne (1 bn tonnes) per year.

I really hope that COP27 and COP28 will inspire new green startups to come to existence in the region. I haven’t seen a lot of interest on the startup level yet, regionally speaking.

I think a climate-focused sector that should get more attention in coming years due to its importance is agritech. The adverse side effects of climate change will ultimately lead to food insecurity.

When we become a gigacorn, an IPO would be the go-to exit strategy. I would prefer to be listed in the NYSE, or somewhere in Europe, depending on the investment appetite at the time. Plan B would be the acquisition route.

To relax, switch off from work and stay sane, I work out, spend quality time with family and friends and do a lot of reading. The last great thing I read was Blitzscaling by Ried Hoffman and Chris Yeh. The book brilliantly delves into the different phases of a startup’s journey. It also expertly educates founders and would-be founders about the best strategies and practices to excel at every one of those stages.