Morocco becomes a prime spot for renewable energy investments.

Good morning, wonderful people — there was no rest for the wicked over the weekend, the result being that we’ve got plenty of news for you this morning on everything from major investments, to policy shifts, updates to IPOs, and even a green sukuk issuance.

But first: We’re sorry to be a few minutes late in your inboxes this morning. We’ll be abck on time tomorrow. That said, let’s jump right in:

THE BIG CLIMATE STORY in our corner of the world: A whole lot of investment seems to be coming Morocco’s way. Multiple companies and a number of governments have announced plans to invest in Morocco’s renewable energy sector. The most recent of these was Indian conglomerate Adani Group, which is hoping to build around 10 GW of renewable energy capacity to feed a green ammonia plant that will export to Europe. The company is reportedly restructuring its debt with a new low-interest green bond offering. Adani Group joined Hassan Allam Holding and Orascom Investment Holding in announcing investments in the kingdom over the weekend.

ALSO- Oman is looking to shore up its own green hydrogen sector, announcing a strategy yesterday that would see it invest USD 140 bn by 2050. The strategy comes with a new regulatory framework, and a new agency that will be responsible for tendering green hydrogen projects. The strategy comes with a series of incentives along with a timeframe and other details on Oman’s next green hydrogen tender.

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

WATCH THIS SPACE #1- Saudi Arabia wants to be a global supply chain hub — with a special focus on renewable energy. Saudi Arabia kicked off what it’s calling a global supply chain resilience initiative (GSCRI) with the hope of turning the kingdom to a key logistics and supply chain hub for a number of industries, including in the green economy, state-run SPA announced yesterday evening. The initiative will see Saudi developing its industrial, logistics and supply chain infrastructure in the hopes of drawing in some SAR 40 bn in investments.

To do this, KSA is offering some SAR 10 bn in financial and nonfinancial incentives for those looking to get into manufacturing of green metals, blue and green hydrogen, recycling and others. “Saudi Arabia also offers access to oil, gas, electricity, renewable energy and human resources at competitive costs,” SPA writes.

WATCH THIS SPACE #2- Are we a step closer to a regional green IPO? The Emirates Central Cooling Systems Corporation (Empower) borrowed USD 1.5 bn in part to fund a special dividend payment ahead of a potential IPO. The district cooling company took out a loan from Emirates NBD Bank to “optimize its capital structure” ahead of its IPO, which could begin as early as next week, sources close to the matter tell Bloomberg. Dubai Electricity and Water Authority (DEWA), which owns 70% of the company and shareholder Emirates Power Investment were paid AED 2.9 bn (USD 790 mn) in dividends, reported Bloomberg, citing a presentation shared on the company’s website.

Empower is looking to raise as much as USD 700 mn from the IPO as early as next week, Bloomberg reported last week, with the caveat that it could always kick the listing to 2023. The district cooling firm was part of 10 state-owned firms slated for listing last November by Dubai’s government as part of its privatization program.

Advisers: Empower appointed Bank of America, Citigroup and Emirates NBD as joint global coordinators on its IPO, while Moelis and Emirates NBD are acting as financial advisers.

WATCH THIS SPACE #3- First UAE blue ammonia shipment arrives in Germany: German mining company Aurubis received 13 tons of blue ammonia, courtesy of the UAE, Aurubis said on Friday. The Abu Dhabi National Oil Company’s (Adnoc) first shipment to Aurubis will be used as a fuel source in the latter’s wire rod factory. Adnoc is developing a low-carbon ammonia plant that will produce 1 mn tons per year.

WATCH THIS SPACE #4- Egypt’s rare-earth play could supply critical components for renewables, semiconductors — and it’s attracting interest from foreign investors. Australian mining firm Fortescue Future Industries is reportedly eyeing the extraction of rare earth elements in Egypt. Fortescue wants to explore investment in the country’s mining sector, with a particular interest in rare earth minerals including silica, which is used to produce solar panels. Fortescue has also expressed interest in green hydrogen as well as some 9 GW of renewable energy in Egypt.

The case for rare earth in Egypt: Egypt’s accumulation of heavy minerals — dubbed “black sands” — has important export value due to its use in everything from renewables to semiconductors. Hassan Allam Holding inaugurated Egypt’s first rare earth plant last week.

GO DEEPER- EnterprisePM’s weekly Inside Industry feature took a look at the Burullus black sands project yesterday.

THE COUNTDOWN TO COP (12 days to go)-

The African Development Bank will announce a USD 1.5 bn green facility to help African countries develop clean energy at COP27, the bank’s principal climate officer told Bloomberg. The funding will be directed at climate-related projects also pertaining to adapting infrastructure to the effects of global warming. The lender plans to raise USD 100 mn by the end of next year, and the full USD 1.5 bn by the end of 2025.

Saudi will host two climate-focused events during COP27: Saudi Arabia’s Middle East Green Initiative (MGI) will kick off on 7 November in Sharm El Sheikh, while its Saudi Green Initiative (SGI) Forum will run from 11-12 November, the Saudi Press Agency quotes crown prince Muhammad bin Salman as saying. SGI will highlight Saudi Arabia’s efforts to push down carbon emissions and will spotlight the country’s renewable energy projects. MGI will focus on charting a course for MENA’s green transition.

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THE BIG CLIMATE STORY OUTSIDE THE REGION- Some scientists think global CO2 emissions from burning fossil fuels will rise by less than 1% this year, thanks to the growing renewables and EV industries, the International Energy Agency said. This would amount to an increase of 300 mn tons to 33.8 bn tons in 2022, compared to the much higher 2 bn-ton jump last year.

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SMART POLICY– Iraq is preparing a bill that aims to spur investment in waste-to-energy projects: Iraq’s Environment Ministry and the country’s National Investment Commission are preparing a new solid waste-to-energy law to attract investments, the Environment Ministry's technical department head Issa Fayad was quoted as saying by the Iraqi Press Agency on Wednesday.

Not so smart: The legislation will apparently also promote the use of methane gas as an energy source, Fayad says without providing details. Methane accounts for 20% of global emissions, according to the US Environmental Protection Agency.

HAPPENING TODAY-

The Middle East Institute’s virtual keynote conference on COP27 starts today at 5:30pm UAE (3:30 pm CLT). The one-day event will see a focus on raising climate financing for climate mitigation and adaptation efforts for developing countries, and will spotlight how organizations, like the Green Climate Fund, can be more effective in mobilizing capital to aid emerging economies’ in climate adaptation. Speakers will include the executive director of the Egyptian Center for Economic Studies Abla Abdel Latif and the regional director of infrastructure for MENA at the World Bank Paul Noumba Um. Register for the online event here.

Arab Sustainability Week kicks off today, with a series of webinars on sustainable financing, smart cities, sustainable management in property and transport sectors, the circular economy and energy technologies. Organized by the Clean Energy Business Council, speakers include officials from the UAE’s energy and infrastructure ministry. You can view the agenda and get get registration details here (pdf).

The International Exhibition of Renewable Energies Clean Energies and Sustainable Development will kick off today and run through Wednesday, 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.

CIRCLE YOUR CALENDAR-

ADIPEC will run from 31 October to 1 November in Abu Dhabi, UAE. Some 40 ministers from around the world, including eight from MENA, will attend the event. Those include energy and oil ministers from the UAE, Kuwait, Bahrain and Egypt. Discussions will partly focus on the transition toward carbon neutrality, a statement picked up by Zawya details. You can register as an exhibitor here, and as an attendee here.

PSA- Deadline to express interest in Al Maktoum solar park’s sixth phase extended to 1 November: Developers have until 1 November to submit their expression of interest (EOI) for Dubai Electricity and Water Authority’s (DEWA) sixth phase of the Al Maktoum solar park, WAM reported on Saturday. The AED 50 bn project — the world’s largest single-site solar park — will be completed between 2025 and 2027 and will yield 900 MW from pv panels.

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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Indian conglomerate Adani Group may be investing in renewables projects with a 10 GW capacity in Morocco to supply green ammonia to Europe, sources close to the matter told Bloomberg on Friday. The project, which would be developed in two 5 GW phases, would be used to supply clean energy to a green ammonia plant that would target exports to Europe, sources added. The wind and solar plants would be Adani’s largest clean energy project outside of India, and would more than triple Morocco’s already installed renewables capacity of 2.8 GW, according to data from Bloomberg.

Adani has already started making moves on the ground: Adani is in talks with Morocco’s state-owned phosphate producer OCP Group to produce carbon-less ammonia, other sources tell Bloomberg.

The group is also looking to raise USD 10 bn in low-cost debt and green bonds, Bloomberg reported last week. Some USD 6 bn have already been marked for refinancing high-cost borrowings, while the remaining USD 4 bn will be allocated to new projects, in an effort to lower the group’s burden of repayments, anonymous sources told the newswire.

GO DEEPER- What’s the Adani Group? Adani Group is a USD 200 bn Indian multinational conglomerate with investments in port management, power generation and transmission, renewables, mining, airport operations, natural gas, food processing and infrastructure. The company’s founder, Gautam Adani, is the richest person in Asia. Adani, whose company continues to invest in fossil fuels, wants to make his conglomerate a world leader in clean energy by 2030.

OTHERS HAVE THEIR EYES ON MOROCCO-

Hassan Allam Holding is looking to invest USD 50-150 mn in renewable energy and desalination plants, the company’s CEO Amr Allam told Bloomberg Asharq on the sidelines of the Choiseul Africa Business Forum.

Egypt’s Orascom Investment Holding (OIH) is ready to invest up to USD 100 mn in several of Morocco’s green sub-sectors over “the coming years,” CEO Naguib Sawiris told Bloomberg Asharq on the sidelines of Choiseul Africa Business Forum in Casablanca last week. These include electric vehicle (EV) charging stations and solar plants. Investing in EV charging stations “is the future,” given that Morocco is currently building an EV battery factory, Sawiris added.

Over in Europe, Germany provided Morocco with EUR 38 mn to its first green hydrogen plant, the German Embassy in Morocco tweeted last week and the Federal Ministry of Economic Cooperation and Development reported (German). No further details about the loan have been shared so far.

Meanwhile, Spanish renewables firms are on the prowl: The Spanish Institute for Foreign Trade (ICEX) is leading a delegation of 10 Spanish renewable energy companies to Rabat on Tuesday, 25 October, ICEX said last week. The event aims to establish links between the countries’ private and public renewable energy players.

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BACKGROUND: THE INVESTMENT CASE-

Europe is hungry for MENA-sourced green hydrogen: Europe’s drive to source green energy has driven a gold rush in green hydrogen and ammonia investments — particularly in MENA. Some USD 180 bn worth of green hydrogen projects are in the region’s pipeline, according to data from MEED earlier this month. Green hydrogen is a key ingredient of green ammonia.

Most recently, Hassan Allam Holding and UAE’s Masdar could invest USD 10 bn in 10 years on their green hydrogen JV in Egypt, Hassan Allam Holding CEO Amr Allam said over the weekend, according to EnterpriseAM. The companies aim to build green hydrogen plants in Egypt’s Suez Canal Economic Zone (SCZone), producing up to 480k tons of green hydrogen a year.

MOROCCO LEADS ON CLEAN ENERGY EXPORTS-

Morocco continues to lead regionally on supplying Europe with clean energy: In addition to supplying Spain and Portugal with 1.4 GW of electricity through two interconnections, Morocco plans to export 3.6 GW of electricity to the UK from solar and wind energy projects with a combined capacity of 10.5 GW by 2030. We reported last week that Morocco and the EU agreed to establish a “green partnership” that would see cooperation and “investment in green technology, renewable energy production, sustainable mobility, and clean production in industry.”

SMART POLICY- Oman unveils ambitious green hydrogen strategy: Oman outlined a strategy to increase investment in green hydrogen to USD 140 bn by 2050 at the government’s Future of Green Energy conference yesterday. This includes investment in 300 mn solar panels, 10k wind turbines, and 5.2k electrolyzers, and hydrogen storage, transport, and desalination.

The plan is ambitious: Oman is targeting annual production of 1-1.25 mn metric tonnes of green hydrogen by 2030, rising to 3.25-3.75 mn metric tonnes by 2040, and 7.5-8.5 mn metric tonnes by 2050.

It calls for investment (and exports) across the value chain: Projects are “expected to develop the full green hydrogen value chain,” including renewable energy generation, green hydrogen production, derivatives conversion and offtake. Developers can choose to produce and export hydrogen, convert it to ammonia or methanol, or use it to power “hard-to-abate industries” like steel or fertilizer production as part of their projects, said Al Shidhani.

What’s being offered to investors? Projects will be able to run for up to 47 years, starting from the point of development and the awarding of land usage rights. During that time, investors will see land fee reductions of up to 100%. Investors will pay a land lease of USD 0.5 per sqm, along with base royalties of up to 5%.

The caveats: Gov’t-owned OQ Alternative Energy will have a 20% equity stake in all projects. Oman isn’t committing to buyingany electricity produced by these projects or any connection to the grid, Hydrom notes. Companies will have to pay a corporate tax.

A one-stop shop for hydrogen projects: As part of the plan, Oman announced its tender process for hydrogen projects yesterday. It launched state-owned Hydrogen Oman (Hydrom) to manage all operations — including structuring and awarding projects, allocating land, developing infrastructure, overseeing project execution and stakeholder coordination.

Oman’s energy and minerals ministry will regulate the sector, noted Abdulaziz Al Shidhani, director general of renewable energy and hydrogen.

Hydrom’s first tender is going to be “accelerated”: Requests for qualifications for Hydrom’s first tender will open on 6 November. Companies will have until January 2023 to submit their bids.

2023 will see six land blocks awarded to project developers: By the end of 1Q 2023, two blocks of land for project development will be awarded in Duqm, followed by an additional four blocks of land in Thumrait by the end of 4Q 2023.

REMEMBER- This is the latest policy move the sultanate has made this year to promote the development of its hydrogen industry. The country has been studying a hydrogen export terminal and repurposing its natgas infrastructure to transport hydrogen.

Not to mention its green hydrogen project pipeline: Oman has lined up a pipeline of projects worth around USD 48.9 bn — second only to Egypt in MENA, according to MEED’s project tracker. Most notably:

• Saudi’s ACWA Power and US-based Air Products teamed up with OQ on a “multi-bn USD” green hydrogen project in Oman’s Salalah Freezone.
• OQ is also working with Hong Kong’s InterContinental Energy and Kuwait’s EnerTech on a USD 30 bn facility which will be powered by 25 GW of wind and solar energy.
• India’s ACME and Norway’s Scatec are partnering on a green ammonia plant that will produce 1.2 mn tons of ammonia powered by 3.5 GW of renewable energy.

KSA and India eye possible renewable energy grid connection via sub-sea cable: KSA and India are said to be exploring the commercial viability of creating a linked renewable energy grid via sub-sea cable, according to an article published on Friday in India’s Economic Times, citing sources close to the matter. The topic was slated to take center stage in discussions during KSA’s energy minister Abdulaziz bin Salman visit to New Delhi last Friday ahead of Saudi Crown Prince Mohamed Bin Salman’s visit to India next month.

A two-way power flow to address renewables intermittency: The project could see a cable run from India’s Gujarat coast to the UAE’s Fujairah (covering some 1.6k km), or even across Oman (covering some 1.2k km), the article notes. “The plan is to have bi-directional flow of power in 15-minute blocks,” Economic Times quotes a power transmission company CEO saying. “Interconnections will solve the intermittency issue associated with wind or solar energy.”

It could cost USD 15-18 bn: The project’s costs could go for USD 15-18 bn, Economic Times notes. But with no information given about its potential generation capacity, we don’t know how these figures were calculated, while sources noted they “aren’t final.” A 3 GW sub-sea cable project alone would require capex of USD 5 bn — including the cost of cables and installation — the article notes industry experts saying.

KSA is said to be seeking industry buy-in: KSA’s ambassador to India has reportedly invited Indian companies working in power generation and transmission — including Reliance Industries, Adani, Tata Group, JSW and Sterlite Power — to weigh in on the discussions, Economic Times notes.

Yet another sign that grid connection is gathering steam in MENA: Apart from the Morocco projects noted above, Egypt has been eyeing multiple power linkage projects, including the USD 4 bn, 2 GW EuroAfrica Interconnector with Greece and Cyprus, the EUR 3.5 bn 3 GW Greece-Egypt Interconnector (GREGY), and a possible further 9.5 GW of renewable power for export to Greece.

Dubai Islamic Bank (DIB) has set up a new green financing framework ahead of issuing green and sustainable Shariah-compliant bonds (sukuk), the bank said in a statement on Friday. The bonds will be used to fund projects pertaining to renewable energy, energy efficiency, sustainable transport, green buildings and wastewater management.

DIB is the first Islamic bank in the UAE to set up this kind of green financing framework, the statement notes. The bank already has several sustainable financing initiatives in place, including a green auto offering for electric and hybrid vehicles, it says. Standard Chartered Bank supported DIB to develop the framework, the statement tells us.

The GCC specifically has been spearheading green bond issuances in the past few months: Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), sold USD 3 bn in green bonds earlier this month that was nearly 6x oversubscribed. Similarly, Abu Dhabi Commercial Bank (ADCB) raised USD 500 mn in a green bond sale in September — an issuance that was almost 4x oversubscribed, demonstrating strong investor demand in sustainable bonds.

AND- Egypt had kicked it all off back in 2020: Egypt pioneered the use of green bonds in MENA, taking the region’s first sovereign green bond issuance to market in 2020, raising USD 750 mn from investors to channel into green projects. Egyptian-headquartered bank CIB also issued Egypt’s first corporate green bond in 2021, raising USD 100 mn in a five-year, fixed-rate offering.

And it plans to issue more: Egypt wants to roll out USD 500 mn in green bonds before the end of the fiscal year, which ends in July 2023, Egypt’s Finance Minister Mohamed Maait told Bloomberg Asharq on Thursday, reiterating previous statements from the ministry. But the issuance hinges on “the betterment of global economic conditions,” he added.