Somber warnings as world leaders’ summit kicks off at COP27

Good morning, ladies and gentlemen. Between the first day of the world leaders’ summit at COP27 and the first interview in our Enterprise Climate CEO Poll series, we have a busy issue for you — let’s jump right in:

THE BIG CLIMATE STORY EVERYWHERE- COP27, naturally enough. Egypt’s President Abdel Fattah El Sisi opened the conference yesterday, calling on countries to tackle climate change “to the degree that they can,” followed by a series of somber speeches from world leaders filled with warnings of “irreversible” climate chaos.

SOUNDBITE OF THE DAY- UN Secretary General Antonio Guterres said “we are on a highway to climate hell with our foot still on the accelerator.”

This morning’s Enterprise Climate soundtrack is, naturally enough, this. Thank you, Angus Young.

We’re starting the second and final day of the world leaders’ summit, with more national statements on the docket. A video message from Ukrainian President Volodymyr Zelenskyy will play at the conclusion of the national statements. The session is expected to start at 10:30am CLT (11:30am KSA / 12:30pm UAE) and continue until the end of the day, according to the agenda (pdf).

Among those speaking today — according to the list of speakers (pdf):

• Arab leaders including Libyan President Mohamed Menfi, Lebanon’s Prime Minister Mohamad Najib Mikati, Tunisian Prime Minister Najla Bouden Ep Romdhan, Palestinian Prime Minister Mohammad I. M. Shtayyeh;
• European leaders, including European Council President Charles Michel, European Commission President Ursula von der Leyen;
• South African President Matamela Cyril Ramaphosa.

AND THEN WHAT…? Don’t expect any big announcements or major breakthroughs after leaders are done giving their speeches today. The key issues at play (loss and damage, emission reduction targets etc.) are being negotiated by government delegations over the next 10 days so we’ll likely have to wait until 18 November for a final agreement to come out of COP27.

Also today: Saudi Arabia’s Middle East Green Initiative gets underway in Sharm.

^^ We have the full rundown of what went down on Day 2 — and what to look out for over the next few days — in the news well, below.

KEY COP DATES-

Among the days and themes that we think are most relevant to MENA business leaders:

• Finance day: 9 November
• Decarbonization day: 11 November
• Saudi Green Initiative: 11-12 November
• Adaptation and agriculture day: 12 November
• Water day: 14 November
• Energy day: 15 November

Detailed schedule: Download as a pdf here or check out the website here.

COP27 app for attendees: App Store and the Google Play Store.

Do you have news coming out of COP? A top exec who would like to have a chat? Send press releases, statements, communiques and interview pitches our way on editorial@enterprise.press.

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The Enterprise Climate X Forum, our first industry-specific conference is taking place on Tuesday, 6 December. It’s a C-suite event for CEOs and top execs, investors, bankers and development finance folks.

In panels, live interviews and networking sessions, the Enterprise Climate X Forum will give insiders and newcomers alike the chance to talk about how to build a climate-centered business — and how to make sure your business continues to have access to the funds it needs to grow. Expect it to be heavy on lessons learned in Egypt and other global growth markets — and lots of success stories.

Some of the biggest names in business and finance are on board — are you? The Enterprise Climate X Forum is taking place with the generous support of our friends, including:

• Banking partners: HSBC | Mashreq | Attijariwafa Bank
• Telecom partner: Etisalat by e&
• Event partners: Hassan Allam Utilities | Infinity

DO YOU WANT TO ATTEND? The first wave of invites is going out now. If you’re a C-suite exec, business owner, climate professional, DFI staff, investor or banker, please email us at climatexrsvp@enterprisemea.com to signal your interest, letting us know your name, title and where you work.

You’re going to love the venue when we unveil it next week.

Want to reach our audience? Ping a note to Moustafa Taalab, our head of commercial, here.

Get Enterprise Climate

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DANGER ZONE- GCC coastal region at risk due to rising sea levels: Sea levels are rising faster than many of the Gulf’s coastal developments are built to accommodate, leaving these developments increasingly exposed to climate change, the National reports, citing engineering consultancy WSP Middle East. Many developments are built with conservative expectations that sea levels will rise approximately one meter, although a 2021 report (pdf) by the Intergovernmental Panel on Climate Change says sea levels could rise up to 2 meters if carbon emissions are not reduced significantly. Developers should invest in assessing their projects’ resilience to climate change and creating sand dunes for instance to ward off excess water, WSP says.

Waters are getting higher and warmer: The Arabian Gulf water temperature is expected to rise by 4.26°C by 2039, resulting in devastating effects on marine biology, including coral bleaching, the National reports. In Egypt, rising water levels could lead to the erosion of the Nile Delta, and global floods are expected to increase tenfold by 2050, endangering people, agricultural land, and wildlife.

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CIRCLE YOUR CALENDAR-

The Hawkamah annual conference will kick off next Tuesday, 15 November in Dubai. The conference will address governance from the perspective of investors including expectations and interaction with boards as well as the role of regulators and companies in preparing for IPOs to attract the right investors.

Saudi Arabia’s Education Ministry will host the Global Conference on Sustainable Partnerships on Wednesday, 23 November to Thursday, 24 November in Riyadh, bringing together ministers and senior officials from the private and public sectors.

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

COP27 got underway in earnest yesterday with some world leaders pressing calls to action to prevent “climate catastrophe”: World leaders struck a serious and somber note with warnings of “irreversible” climate chaos and calls for cooperation and shared responsibility on the first day of the COP27 leaders’ summit yesterday. Inaugurating the conference, President Abdel Fattah El Sisi said we are in a “world of suffering” and called on all countries to assume responsibility to tackle climate change “to the degree that they can” (watch, runtime: 19:50).

One clear message: The status quo can’t continue. “Greenhouse gas emissions keep growing. Global temperatures keep rising. And our planet is fast approaching tipping points that will make climate chaos irreversible,” said UN Secretary General Antonio Guterres (watch, runtime: 10:15). “We are on a highway to climate hell with our foot still on the accelerator.”

THE GREAT ENERGY DEBATE

Coming under fire? Slow-to-act developed economies: Global leaders have a “credibility problem” when it comes to taking action on climate change, said former US Vice President and long-time climate advocate Al Gore (watch, runtime: 14:50). Developed nations’ continued pursuit of Africa’s gas resources is “fossil fuel colonialism,” said Gore, and will lead to “climate chaos and bns in stranded assets, especially here in Africa.”

Africa could be the “renewable energy superpower,” Gore said. 40% of the global potential for renewables is in Africa, he added.

Rich countries have already turbocharged climate change — now they need to help emerging markets cope with the fallout. El Sisi called for “concrete action that has a clear, tangible impact” — and that helps emerging markets develop their economies. Guterres called for a “climate solidarity pact” to increase emissions reduction efforts (a rich-country demand), spur the energy transition and help vulnerable countries adapt to climate change. This pact should focus particularly on “phasing out” coal usage everywhere by 2040: “The two largest economies — the United States and China — have a particular responsibility to join efforts to make this pact a reality,” Guterres added.

But not everyone’s on board with a move away from fossil fuels: “The UAE is considered a responsible supplier of energy and it will continue playing this role as long as the world is in need of oil and gas,” said UAE President Mohammed bin Zayed Al Nahyan, who took the stage immediately after Guterres (watch, runtime: 7:33). Dubai will host COP28 next year. Senegal’s President and Chairperson of the African Union Macky Sall, underscored a similar point, saying: “We are for a green transition that is equitable and just, instead of decisions that jeopardize our development, including universal access to electricity to which 600 mn Africans remain deprived,” he said (watch, runtime: 07:48).

CLIMATE FINANCE IS THE CARROT-

The success of the drive to put climate at the top of the world’s agenda hinges on the delivery of climate finance, former UN climate chief Patricia Espinosa told Reuters. World leaders have been focused on the threat of a global recession and the war in Ukraine, making COP27 “a very important conference” to put climate change back at the top of the agenda, she said.

That makes finance for adaptation, loss and damage key, Espinosa told the newswire. Will we see rich countries agree at COP27 to set up a new funding facility for this? “I hope so, but I would not be that optimistic about it,” she said.

A “commitment to unlocking concessional funding for climate vulnerable countries,” is essential, said Barbados Prime Minister Mia Mottley, speaking at the summit opening (watch, runtime: 13:35). “There is no way that developing countries … can fight this battle” without this funding, she added.

Mottley wants the IMF to give the private sector more money for climate projects, reiterating her call from last year for the IMF to issue USD 500 bn a year in special drawing rights (SDRs) earmarked specifically for climate finance. SDRs are a kind of international reserve currency or asset designed to act as a supplement to IMF member countries’ reserves, EnterpriseAM noted previously.

Sobering testimony from Pakistan shows what’s at stake: Pakistan needs immediate debt relief and loss and damage compensation to get back on its feet after disastrous floods earlier this year claimed north of 1k lives, caused more than USD 10 bn of damage, and displaced >30 mn people, Prime Minister Shehbaz Sharif said at a joint press conference with Guterres yesterday (watch, runtime: 13:04). Climate compensation advocates — including Egypt climate czar Mahmoud Mohieldin — have repeatedly called for debt-reduction mechanisms and an emphasis on investment to help emerging market climate change adaptation.

AND THEN THERE ARE STICKS…

The price of carbon needs to more than double to average at least USD 75 / ton by 2030 for global climate goals to succeed, IMF Managing Director Kristalina Georgieva told Reuters on the sidelines of COP. Without this, “we simply don't create the incentive for businesses and consumers to shift,” Georgieva added, characterizing the pace of change in the real economy as “way too slow.” In many countries, “the acceptance of pricing pollution is still low,” said Georgieva. California currently prices carbon allowances at just under USD 30 / ton, Reuters notes.

FUNDING ANNOUNCEMENTS

We saw now grand single- or muti-nation announcement on climate funding yesterday. Instead:

Saudi Arabia is contributing USD 2.5 bn to its Middle East Green Initiative in the coming 10 years, Reuters reports Crown Prince Mohammed bin Salman saying yesterday. The initiative — launched by MbS last year — aims to reduce CO2 emissions from regional hydrocarbon production by over 60%. KSA previously said it planned to contribute 15% of the USD 10.4 bn needed for the clean energy projects it would run, Reuters notes. The Kingdom’s sovereign wealth fund, the Public Investment Fund, is also aiming for net-zero emissions by 2050, MbS added.

The ticket sizes got smaller and smaller from there:

• Belgium is earmarking EUR 2.5 mn for loss and damage out of a new EUR 25 mn support package to Mozambique from 2023-2028, Minister for Development Cooperation Frank Vandenbroucke said in a statement yesterday. It’s a pittance, but Belgium is only the third country — other than Scotland and Denmark — to pledge funding for climate change-driven loss and damage, Reuters notes.
• The UK is investing over GBP 100 mn (USD 115 mn) to help developing countries implement climate change adaptation measures, Foreign Minister James Cleverly said.

OTHER FUNDING-

The Bill & Melinda Gates Foundation has pledged USD 1.4 bn to increase resilience in the work practices of smallholder farmers in sub-Saharan Africa and South Asia, to ultimately improve food security, it announced in a statement yesterday. The funds will go towards climate smart agriculture projects, applying innovations like digital tech, and supporting women farmers — who make up some 43% of agricultural laborers in developing countries, but whose access to finance is often restricted, Reuters notes.

The Bezos Earth Fund announced USD 50 mn would be used to support Africa’s “locally led restoration movement,” as part of a USD 1 bn commitment to restoration made last year at COP26, in a statement. Still, philanthropic organizations shouldn’t be expected to fill the climate finance gaps left by governments, Bezos Earth Fund President and CEO Andrew Steer told the Guardian ahead of COP.

COOPERATION PLEDGES-

Over 25 countries launched a group yesterday to spur accountability and action on a pledge to end deforestation by 2030 announced at COP26, according to a statement issued by COP26 President Alok Sharma. The countries announced USD bns in additional financing to fulfill the pledge. The group collectively accounts for some 35% of the world’s forests and will aim to meet biannually for progress updates, Reuters notes.

Drought-stricken countries are banding together to share tech and expertise to manage water scarcity — with Senegal and Spain taking the lead, Reuters reported. The alliance will mobilize resources on an as-needed basis, Spain’s President Pedro Sánchez Pérez-Castejón is reported to have said in a statement, without revealing what level of funding would be provided.

Welcome to the Enterprise Climate CEO poll: With all eyes on Sharm El Sheikh as COP27 continues, Enterprise Climate and EnterpriseAM are presenting our inaugural Climate CEO Poll, a series of interviews with top CEOs attending the summit to discuss key issues including climate finance, regulation, and the green economy.

Mohamed Saad (LinkedIn) is president and CEO for NEA at Signify — formerly known as Philips Lighting, a global leader in energy-efficient lighting products, systems, and services including integrated solar street lighting, innovative solar lanterns, an LED-powered internet of things (IoT) platform, horticulture lighting, and LiFi systems.

When you aside what he does for a living and think about it, Saad’s message hits home: Efficient lighting is among the keys to our energy transition. Switching all conventional light bulbs to LED could reduce electricity consumption by 50%. Using connected lighting to power devices through the IoT could save another 30%, Saad says.

Lighting can even boost food security: The horticulture lighting Signify has installed in Egypt has improved agricultural growth efficiency, he notes. “The point of the energy transition is both to get the world to carbon neutrality and to help us to do more using fewer resources,” Saad says. Careful use of energy — like efficient lighting — could help Africa “leapfrog” its development, he adds.

Saad hopes both the public and private sectors will be receptive: Governments need to push for all lighting to be LED or ultra-efficient, he says. For private sector players, it’s about spurring a mindset shift. “I’d like them to think of reducing their operating costs by using LED, ultra-efficient light or connected lighting — where they could see a return on investment in just a few months — rather than the initial CAPEX costs.”

What does Saad want to see from COP? Concrete and faster action on climate-friendly tech deployment. “My biggest frustration with previous COPs is that we haven’t moved fast enough,” Saad told us. “Regulatory amendments are happening in Europe and in some parts of Africa, but not at the speed I’d like.”

How could this be done?

#1- Regulation and quota-setting: “I’d like to forbid all conventional lighting, which generates heat and weighs very heavily on national grids,” Saad says. He advocates for sustainability obligations on all new private sector projects, covering lighting, water consumption, circularity, and recycling. Governments should set the tone by measuring and reducing their own use of these resources — which some are already working on, he says.

#2- Regional collaboration: Encouraging the uptake of global tech could happen through large multinational companies and by establishing small regional innovation hubs — which is particularly important for MENA and Africa, says Saad.

#3- Financing: Large companies often don’t prioritize investment in “non-core” activities like lighting. If public and private equity funds finance efficient lighting or energy solutions through the “as-a-service” concept — where consumers don’t pay an initial investment, but only for what they consume — uptake could accelerate hugely, says Saad. “I’m definitely hoping to see progress on this during COP.”

For Signify, Saad hopes COP will open up large-scale partnership prospects with public and private sector organizations for more efficient lighting. Discussions about public lighting should focus on efficiency — for street lighting, residential and commercial compounds, or sports stadiums, he notes. “We hear a lot of talk today about saving energy by switching off public street lights, but I don’t think this is the solution,” he says. “We need to make public lighting smarter and more efficient. This has environmental benefits and a very direct link to safety and security.”

Africa, MENA, Turkey, and Pakistan are key markets for Signify’s future expansion: It’s eyeing more investment, an expanded footprint, and manufacturing localization, especially in Egypt, Morocco, Tunisia, South Africa, and Kenya, Saad says.

Egypt, Turkey and Saudi Arabia are potential export hubs: Signify is eyeing Egypt as an export hub for Africa, says Saad. As a signatory to multiple trade agreements with excellent shipping and transportation links and a qualified labor force, the country has major export advantages, he notes. Turkey could serve as an export hub to Eastern Europe and the Middle East, while Saudi Arabia — already a huge market — could be an export hub for the GCC.

Apicorp inks MENA region’s first Islamic financing agreement for voluntary carbon offsets: Saudi Arabian energy-focused multilateral financial institution Arab Petroleum Investment Corporation (Apicorp) has signed a USD 75 mn murabaha agreement with global energy and commodities firm Hartree Partners to fund voluntary carbon offsets, according to a company press release.

What is murabaha? It’s an Islamic financing structure where the seller and buyer agree to the cost and markup of an asset, making it sharia-compliant since it does not bear interest.

What will the agreement do? The facility will fund high-quality voluntary carbon offsets to develop environmentally friendly projects registered with the nonprofit platform Verra, a global registry for nature-based offsets.

A first in MENA: “The facility’s shariah compliance and syndication features can have major implications because they make it convenient for the regional market to adopt and enable additional banks to join and gain exposure to this asset class,” Apicorp CEO Khalid Ali Al-Ruwaigh said.

Advisers: Norton Rose Fulbright Dubai acted as the lender’s counsel and Reed Smith LPP Dubai provided counsel to Hartree Partners. Shariah advisory services and the issuance of an operating fatwa were provided by Shape Knowledge Services. DD&Co Limited supplied the London Metals Exchange with approved non-ferrous base metals for each Shariah-compliant murabaha transaction.

Arabian Cement Company signs new PPA for Suez facility solar plant: Egypt’s Arabian Cement Company (ACC) signed a PPA with utility firm Amarenco SolarizEgypt (ASE) for a 13.2 MW second phase of its solar plant in Suez, Egypt according to a company press release (pdf). The new phase will see investments between EGP 170-190 mn, SolarizEgypt Managing Director Yaseen Abdelghaffar tells Enterprise Climate.

The details: The second phase of the project will bring the solar plant’s total capacity to 20.6 MW. The project should be completed and brought online by September 2023.

Emissions savings: The new phase will eliminate some 13k tons of CO2 per year of emissions, in addition to the current savings of around 5.5k tons per year of CO2 emissions out of phase one, the statement says.

ACC wants more green energy: Phase 1 of the project generated some 3% of ACC’s operational energy needs. The addition of the second phase — which will use bifacial solar cells and solar energy tracker technology — could generate 10% of ACC’s total energy needs, Abdelghaffar tells us.

Orascom Construction explores 3D printing construction tech: Global engineering and construction contractor Orascom Construction is collaborating with Denmark’s COBOD to begin using 3D printing construction technology in Egypt, according to a statement (pdf) released last week. The Egyptian-Dutch cooperation will explore using the technology in printing entire buildings for more environmentally sustainable construction by reducing material consumption, construction waste, and reducing carbon footprint.

Egypt and Germany are looking to share technology for green hydrogen production, with the two countries signing a letter of intent last week, according to statements from Germany’s Federal Ministry for Economic Affairs and Climate Change and Egypt’s State Information Service. The two sides have agreed to cooperate on specific green hydrogen projects in Egypt and promote joint investment and research in the budding industry, as we reported previously.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• The Saudi Public Investment Fund-backed Marafiq’s IPO was 6.32x oversubscribed, closing with almost SAR 6.37 bn (USD 1.7 bn) worth of total orders, Arab News reports. Marafiq has core businesses including water supply, sewage and waste management and treatment.
• Italian chemical manufacturing company NextChem — a subsidiary of Maire Tecnimont — is setting up a plant for reprocessing and upcycling polymers in the UAE, according to a company statement (pdf).
• The Abu Dhabi Sewerage Services Company will develop a wastewater treatment plant in Tashkent, Uzbekistan in partnership with Uzsuvtaminot JSC, according to a company statement picked up by Zawya. The plant will have a daily capacity of 1.5 mn cubic meters.
• UAE’s Etihad Airways inked an agreement with Spanish oil company Cepsa to accelerate its adoption of sustainable aviation fuels (SAF), according to a company statement. Using SAF will reduce 80% of CO2-equivalent emissions compared to traditional kerosene, the statement notes.

FRV buys majority stake in Greek BESS facility: Spain-headquartered Fotowatio Renewable Ventures (FRV) acquired a majority stake in Greek renewables company Wootis SA’s 600 MW battery energy storage system (BESS) project, according to a company statement. The BESS facility is set to become operational between 4Q 2023 and 2Q 2024, the statement notes. The details of FRV’s investment were not disclosed.

FRV is on a renewables buying streak: FRV — a subsidiary of Saudi solar PV developer Abdul Latif Jameel Energy and Environmental Services — acquired two battery energy storage (BESS) projects in the UK with a combined capacity of up to 100 MW last month. FRV also has five battery energy storage projects in various stages of construction and development with a combined capacity of 340 MW, a company statement notes.

Amphibious electric aircraft unveiled during Abu Dhabi Air Expo: Swiss aviation startup Jekta Swiss Aviation showcased a model of its net-zero 19-seater electric airplane, which will enable people in coastal regions to travel using water routes, the National reports. The fully electric sea-faring aircraft is able to land on water and dry land, traveling within cities and decongesting roads by taking rivers, seas, and lakes as viable travel routes. The prototype of its EUR 280 mn hydro aircraft will be rolled out in 2026.

Specs: The fully electric aircraft — made from fiberglass, kevlar, and carbon materials — comes equipped with a solar power plant and a flight range of two hours and a cruising speed up to 130 knots. The aircraft will have a maximum flying altitude of 13k meters and can withstand wave heights up to 1.2 meters when sailing. Jekta aims to have it available for purchase in 2028 (watch, runtime: 02:35).