The CEOs of BlackRock, Citi and Standard Chartered have better things to do than to attend COP27

Good morning, wonderful people, and happy end-of-the-week to everyone. It’s the last business day of the week for most folks, and hang in there, friends in the Emirates — just one day left.

We have a packed issue this morning with lots of news from our corner of the world after two days in which the climate agenda has been dominated solidly by the World Bank and IMF fall meetings.

But there’s still going to be lots of climate talk in DC today: Day four of the IMF + World Bank annual meetings will see attendees debating the role of multilateral development banks in the energy transition, as well as how to finance the green transition while ensuring gender equality. Speakers will include World Bank chief David Malpass, International Finance Corporation boss Makhtar Diop, and International Emissions Trading Association CEO Dirk Forrister. Tap or click here for the full schedule.

THE BIG CLIMATE STORY in our corner of the world: It’s all about regional green hydrogen exports. Saudi renewable energy giant ACWA Power and South Korea’s Korea Electric Power Corporation (Kepco) signed an agreement this week that would see the two work together on green hydrogen production, with an eye to supplying Kepco’s Korean operations. This follows a string of green hydrogen announcements ACWA has been making in recent months that appear to be positioning the company as a regional green hydrogen powerhouse.

THAT’S NOT ALL: Belgium’s Tree Energy Solutions wants to use green hydrogen from our neck of the woods to produce synthetic natgas to replace Europe’s Russian supplies. Its plan has gotten backing from several EU nations, and received a major profile in the New York Times this week.

ALSO IN THE HEADLINES- UAE industrial renewables firm Yellow Door Energy (YDE) raised USD 400 mn from shareholders who came on board earlier this year. These include private equity giant Actis, the International Finance Corporation (IFC), Japanese conglomerate Mitsui, and the Saudi-based Arab Petroleum Investments Corporation (Apicorp).

^^ We have chapter and verse on these stories and more in this morning’s news well, below.

COUNTDOWN TO COP (24 days to go)-

The chiefs of a number of major finance outfits will not be attending COP27, Bloomberg reported yesterday. The CEOs of BlackRock, Citigroup and Standard Chartered, all of whom made a point of attending COP26, will be skipping the November meeting in Sharm El Sheikh. They’re not the only ones: Bloomberg says “a long list of top-level executives” won’t be attending, sending instead delegations of lower-tier representatives.

Why? They’re tackling more “immediate crises,” the business information service writes, including fallout from the Russia-Ukraine war, energy crises, rising inflation and the threat of recession.

That’s weak sauce, if you ask us: Overnight, the G7 group of industrialized nations said they would “intensify climate efforts despite war challenges,” Reuters reports. Finance ministers and central bankers meeting on the sidelines of the IMF + World Bank meetings have arguably as much on their plate as Larry Fink and Jane Fraser do, but will “not compromise on, but rather intensify our efforts to meet our climate goals,” they said. If Joe Biden can reportedly find the time to come to Sharm, folks…

Your Alarming Pre-COP Report of the Week: About 600 mn people across Asia and Africa will face heat waves that go beyond the “human survivability threshold,” by 2100, according to a report (pdf) by the UN Office for the Coordination of Humanitarian Affairs (OHCA) and the International Federation of the Red Cross (IFRC) published Monday.

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WATCH THIS SPACE #1- Is MENA’s cement industry not “driven” enough to decarbonize? The biggest hurdle for decarbonization in the cement industry in our region is the lack of drive to act now, industry leaders concluded at the World Cement Association (WCA) annual conference in Dubai, according to a statement (pdf) out yesterday. Other limiting factors include the lack of economic incentives, such as carbon pricing and green procurement.

What can MENA do? Certain measures can be taken that could potentially reduce carbon emissions by 47%, according to cement industry consulting firm A3&Co. These mainly include using alternative fuels and using low-emission inputs such as calcined clay which improves the strength of concrete.

SOUND SMART- Across the globe, cement generates the most carbon emissions per USD of revenue — with 6.9 kg of CO2 released, which is 5x more than steel, the WCA statement says. MENA cement producers account for nearly 7% of the global cement output.

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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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THE BIG CLIMATE STORY OUTSIDE THE REGION- Perhaps there’s a reason China keeps trying to water down global emission reduction targets: China will need USD 14-17 tn to reach its net zero target by 2060, according to a World Bank report published yesterday. The price tag only tackles green infrastructure and technology in the power and transport sectors. This will require more than just public investments, regional VP for Asia and the Pacific at the International Finance Corporation Ruth Horowitz said. Climate change could cut the country’s economic output by 0.5-2.3% by 2030, the report adds.

China needs to get this right for all our sakes: “Without China successfully transitioning to a low-carbon economy, achieving global climate goals will be impossible,” the World Bank writes, adding that the country emits 27% of the world’s CO2. (Reuters | Asia Financial)

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WATCH THIS SPACE #2- Climate education done right: The Abu Dhabi Environment Agency (EAD) launched its e-learning platform Abu Dhabi Nature to educate users on the emirate’s surrounding flora and fauna, the agency announced on Wednesday. The platform’s app is currently available for schools but will be accessible to the wider public in 2023.

MENA could use a climate education boost: Awareness of climate-related issues has been rising, but climate education — both on the formal education level and on the capacity building side — remains weak in MENA.

Want to know more? Read our explainer here and here.

KUDOS- Oman became the latest this week the latest country in our region to make a net-zero commitment. Sultan Haitham bin Tarik has set a goal of 2050, according to an Oman cabinet statement picked up by Muscat Daily.

Oman joins Saudi, Bahrain and the UAE, which announced net zero commitments in October of last year. Saudi Arabia and Bahrain said they aim to hit net zero by 2060, while the UAE pledged to hit the target by 2050. By our count, Qatar and Kuwait remain the only GCC holdouts. The latter said it is cutting emissions 7.4% under the “business as usual scenario” by 2035 and unveiled last month what it’s billing as the world’s “largest net zero community.”

CIRCLE YOUR CALENDAR-

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. Our friends at the European Bank for Reconstruction and Development (EBRD) will be taking part and will discuss its water infrastructure investment program for the depollution of the Kitchener sewage drain in Egypt on Wednesday, 19 October. This comes in partnership with the EU and European Investment Bank, EBRD said in a statement (pdf).

The International Exhibition of Renewable Energies Clean Energies and Sustainable Development will run from 24-26 October in Oran, Algeria. The event will focus on the role of startups in the green 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.

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ACWA Power, Kepco to collaborate on green hydrogen projects: Saudi renewable energy giant ACWA Power and South Korea’s Korea Electric Power Corporation (Kepco) will partner up to develop green hydrogen projects to decarbonize Kepco’s South Korea operations, ACWA Power said in a press release earlier this week. The two parties signed an MoU earlier to explore a potential partnership that would span projects in the Middle East and other territories, with the aim of producing industrial-scale green hydrogen and ammonia for Kepco’s South Korea plants. The size of the transaction was not disclosed.

How much is Kepco looking to buy? The Korean utilities provider wants to source 5-10 mn tonnes of green ammonia produced from green hydrogen for power generation by 2030.

Another notch in ACWA’s green hydrogen export belt: In July, the Saudi company signed an MoU with South Korea’s Posco Holdings to jointly develop green hydrogen and its derivatives, including green ammonia, to decarbonize Posco Group’s power generation and steel manufacturing processes.

BACKGROUND- ACWA Power recently established a JV with Air Products and NEOM’s Green Hydrogen Company to produce 650 tonnes of green hydrogen daily and 1.2 mn tonnes of green ammonia at NEOM’s green hydrogen production plant, which is due to be completed in 2026. Back in May, ACWA and Air Products teamed up again, this time with Oman’s OQ, to work on a “multi-bn USD” green hydrogen project in Oman’s Salalah Freezone.

ALSO- EUROPE WANTS TO USE OUR GREEN HYDROGEN TO PRODUCE SYNTHETIC NATGAS

Belgium’s Tree Energy Solutions (TES) wants to replace Russian gas supplies to Europe by synthesizing a “cleaner” form of natural gas sourced from green hydrogen, the New York Times writes. The company plans to produce hydrogen from renewable sources in MENA — the story mentions Egypt, the UAE and Oman — mixing it with captured carbon to produce methane (natgas), liquefying it and then shipping it to Europe. The founders argue this is a simple plug-and-play solution as the methane could still be used in legacy natgas infrastructure to heat homes in Europe.

Moves are already happening (on the European side at least): The company is currently building energy supply and import hubs across Europe, the US and Canada. The German government already agreed to store TES’ liquified green hydrogen imports in its floating Wilhelmshaven LNG terminal, which is still under construction.

Some familiar names in the industry are investing in this: TES raised EUR 65 mn in July, and Australia’s Fortescue Future Industries is investing EUR 30 mn to become a shareholder in TES and an additional EUR 100 mn to partake in the construction of the Wilhelmshaven terminal.

UAE’s Yellow Door scores another big investment this year: UAE industrial renewables firm Yellow Door Energy (YDE) raised USD 400 mn from shareholders that came on board earlier this year, including from majority shareholder private equity giant Actis, YDE said in a statement (pdf). Other shareholders to have come on board as part of the transaction include the International Finance Corporation (IFC), Japanese conglomerate Mitsui, and the Saudi-based Arab Petroleum Investments Corporation (Apicorp). The statement doesn’t say who owns what now, but did note that the move has allowed funding has allowed initial investors to exit the company.

This is the second time that Actis has invested in YDE this year. Actis acquired a majority stake for an undisclosed sum in July, the company said earlier this year. The acquisition, which was funded through Actis’ Energy 5 Fund, aimed to scale the company and accelerate its growth, as per the statement.

How will the funding be deployed? The investment will allow the company to expand into new countries and “deploy upward of USD 1 bn in projects in the region,” YDE CEO and founder Jeremy Crane said. With this transaction, the company is now “fully funded,” allowing its management team to focus on executing sustainable energy solutions over the coming five years, CFO Nalin Nayyar added.

What we know about YDE: The Dubai-based renewable energy provider has operations in the UAE, Jordan, Pakistan, Bahrain and South Africa. The company has 200 MW of secured production capacity — 106 MW in operation and an additional 104 MW awarded or under construction. It counts among its customers upward of 50 companies, including Nestlé, Majid Al Futtaim, DHL, Mondelēz and Unilever.

Iraq’s northern Kurdistan region is getting a new sewage system worth USD 288 mn with financing from the Japan International Cooperation Agency (JICA), the company said in a statement picked up by Zawya yesterday. The plant will have a capacity of 840k cubic meters per day. The project, which is now open for bidding by prospective contractors, will include a stormwater collection network at a later stage.

JICA is funding other water-related projects in Iraq, including the Al Basra Grand Water Project (pdf), and its continued expansion, UNDP Iraq tweeted. Phases 3 and 4 of the project were commissioned in 2022, with an eye to expand capacity to 200k cubic meters per day — an amount that will provide clean drinking water for approximately two mn people in Basra.

Iraq’s entire water infrastructure is in need of an overhaul: Iraq’s water supply has been drying up for decades, decreasing by an estimated 30-40% over a 40-year period ending in 2018. Iraq was named (pdf) the world’s fifth most vulnerable to decreased water and food availability. The country is vulnerable to water-related conflict and climate change, and has been suffering from a lack of wastewater infrastructure. Allocating funding for the latter was one of several solutions proposed for the water-poor country.

Want to read more about Iraq’s water issues? We have explainers on the topic here and here.

KUDOS- The SolarQuarter Grand Masters Middle East Awards of 2022 recognized a number of solar energy companies in MENA. Those getting recognition include Siraj Power and its CEO, Laurent Longuet (LinkedIn); the UAE’s The Contractor for Energy; ACWA Power’s Ahmed Ali (LinkedIn); and Emirates Electrical Engineering’s Hatem Hamam (LinkedIn). You can check out the full list here.

Morocco’s renewable energy and climate innovation center Cluster ENR landed first place at the Emirates Energy Awards (EEA) in the education and skills building category.

Energy Intelligence (EI) named Qatar’s Energy Affairs Minister Saad Sherida Al-Kaab as energy executive of the year for 2022.

Masdar’s Central Park project was named sustainable project of the year award at the MEP Middle East Awards 2022.

French Prime Minister Élisabeth Borne led a business delegation to Algeria this week to discuss potential agreements in renewables and green transition (among others) between the two countries. The visit, which concluded on Tuesday, included French electricity provider Generale Energie.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Morocco’s Chefchaouen is getting an energy-saving green public lighting system, the United Nations Capital Development Fund (UNCDF) said on Tuesday. The UNCDF is financing the project at no cost for the municipality.
• Oman completed a solar energy transmission station in Ibri with a production capacity of 220kv worth almost USD 19.5 mn, the Oman Electricity Transmission Company (OETC) announced.