COP27 launches Sharm El Sheikh Adaptation Agenda + Egypt lines up 25 GW of new renewable power

Good morning, friends — it’s day four of COP27 and we have a torrent of news for you.

As it has been since the start of the week, the summit is the BIG CLIMATE STORY EVERYWHERE: The COP27 Presidency launched the Sharm El Sheikh Adaptation Agenda yesterday with key targets for collective adaptation action, in partnership with the UN climate change high-level champions. The ultimate goal? Safeguarding “climate vulnerable” communities from “rising climate hazards, such as extreme heat, drought, flooding, or extreme weather.”

AND- The IFC is launching a USD 6 bn global food security platform, singling out Arab countries including Yemen, Iraq, Lebanon, Libya and Tunisia as being particularly at risk. The USD 6 bn financing facility aims to “support vulnerable communities, boost the flow of vital commodities to emerging markets, and help reduce food insecurity.”

The private sector has committed about a third of the capital to the fund, with USD 2 bn coming in from private investors, USD 3 bn from the IFC and another USD 1 bn being blended finance.

The IFC will invest in private-sector companies that help shore-up food security, including in agribusiness, infrastructure, manufacturing, and disruptive technology.

Want to go deeper? Check out the rundown here or the announcement here.

ALSO- Austria just became the fifth rich country to make a pledge of loss-and-damage finance for emerging markets — with the whopping pledge of EUR 50 mn over four years. Yes, folks, mn (not bn), that’s not a typo. Sure, it’s more than the EUR 2.5 mn that Belgium promised Mozambique earlier this week. But these sums are so small as to be insulting — they’re rounding errors compared to the needs in frontier and emerging markets.

HAPPENING TODAY-

IT’S A HUGE DAY FOR all of our besties in banking and finance as Egypt’s Finance Ministry hosts Finance Day.

What’s the big deal? Finance ministers, bankers, investors, multilaterals, development finance institutions, and anybody else with an interest in how governments and businesses alike access finance for climate will in meetings and rountables — or chatting on the sidelines. In addition to pushing lenders and investors to step up to the plate, state officials are looking at a series of facilitated and sustainable climate finance agreements for developing and African countries.

Prime Minister Moustafa Madbouly will kick off the day’s proceedings, setting the stage on main challenges and avenues for climate finance. Sessions throughout the day will discuss the role of policy in climate investment, reducing the cost of green borrowing, financing a just transition in Africa, the role of MDBs in unlocking climate finance, and financing loss and damage.

ALSO The COP27 Presidency will launch the Sharm El-Sheikh Guidebook for Just Financing.

AND- Expect plenty of announcements from banks, investors, DFIs and others today.

MEANWHILE- Speeches by world leaders wrapped up yesterday — now the real arm-twisting has begun behind the scenes. 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.

^^ 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:

• 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. 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.

Stay tuned very soon when we reveal the venue. You’ll love it, we promise.

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 today. 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.

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

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THE DANGER ZONE #1- Climate change could be twice as deadly as cancer in some regions, UN News reports. citing a study by the UN Development Programme and the Climate Impact Lab. By 2100, should emissions remain high, areas of Bangladesh could see climate change-related deaths rise to “nearly twice the country’s current annual death rate from all cancers,” according to the report. The impact of rising temperatures, which stress cardiovascular and respiratory systems, will vary by region depending on whether or not communities have the resources to adapt.

The impact will increase inequality significantly: Workers in industries like agriculture, mining, construction and manufacturing — who are most exposed to weather conditions — will be the most affected. Countries like Saudi Arabia have the resources to adapt, but climate change is still expected to increase the nation’s death toll to 35 per 100k, deadlier than Alzheimer’s disease. Communities like Pakistan’s Faisalabad, on the other hand, will witness mortality rates rise to 67 per 100k, causing more fatalities than strokes — Pakistan’s leading cause of death.

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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.

UAE will host The Big 5 Global Construction Impact Summit on Wednesday, 7 December at the Dubai World Trade Centre, bringing regional and global construction industry leaders together to discuss avenues to meet the region’s net-zero targets.

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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Enterprise Climate is published at 4am CLT / 5am Riyadh / 6am UAE Monday through Thursday by Enterprise, the folks who bring you Enterprise Egypt, your essential 6am and 3pm read on business, finance, policy and economy in Egypt and emerging markets.

Subscribe to Enterprise Climate here or reach out to us on climate@enterprisemea.com with comments, suggestions and story tips.

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Adaptation was the big theme of discussions at the COP27 leaders’ summit yesterday. Day three of COP27 saw speakers and organizers hone in on the need for meaningful measures on adaptation and more climate finance for communities vulnerable to climate change.

The highlights:

• Adaptation agenda unveiled: The COP27 Presidency took the lid off an ambitious new agenda that aims to mobilize USD 140-300 bn in public and private sector funding for adaptation and resilience by 2030.
• Calls for adaptation-focused investment: Bold-name speakers — including US climate envoy John Kerry, Pakistan’s Prime Minister Shehbaz Sharif, and Gates Foundation CEO Mark Suzman — called for more adaptation-focused investment.
• More discussions of adaptation: Two of the three high-level roundtable discussions held — water security (pdf) and climate change and the sustainability of vulnerable communities (pdf) — were strongly adaptation-themed.
• The pool of financing earmarked by rich nations for loss and damage grows — kinda. Austria became the fifth country to commit to loss and damage financing, following pledges from Germany and Belgium on Monday. (More on that in our next story, below.)

In terms of catchy COP27 soundbites, von der Leyen trails behind Guterres: European Commission President Ursula von der Leyen’s call for accelerated action on climate change yesterday was (let’s be honest) nowhere near as catchy as the call by UN Secretary General Antonio Guterres — who spoke of the world being on the “highway to hell” — the day before. “The global fossil fuel crisis must be a game changer. So let us not take the ‘highway to hell’ but let's earn the clean ticket to heaven,” von der Leyen told the summit (watch, runtime: 4:15).

ADAPTATION ROADMAP-

The COP27 Presidency yesterday launched the Sharm El Sheikh Adaptation Agenda (pdf) for collective adaptation action, in partnership with the UN climate change high-level champions, it announced in a statement (pdf). The agenda is a clear bid to zoom in on the need to provide adaptation support to climate change-ravaged communities. It is the “first comprehensive global plan to rally both State and non-State actors behind a shared set of adaptation actions that are required by the end of this decade,” the statement notes.

The ultimate goal? Protecting “climate vulnerable” communities from “rising climate hazards, such as extreme heat, drought, flooding, or extreme weather,” according to the statement. It identifies 30 adaptation outcomes designed to increase resilience by 2030 — targeting some 4 bn people, the statement tells us.

How will it do this? By putting forward “global solutions” — presumably, the action points of each of the 30 adaptation outcomes — that can be tailored to the needs of local communities. These focus on food and agriculture, water and nature, coasts and oceans, human settlements, and infrastructure — and include proposed action for the all-important areas of planning and finance, the statement notes.

Some key 2030 targets:

• Mobilizing USD 140-300 bn from the public and private sectors for adaptation and resilience. Providing at least USD 10 bn per year in “innovative finance” to increase access to clean cooking for 2.4 bn people.
• Protecting 3 bn people through “smart and early warning systems.”
• Increasing agriculture yields by 17% and reducing farm-level greenhouse gas emissions by 21%, through a shift to “climate resilient, sustainable agriculture.”
• Preservation of land… Protection and restoration of an estimated 400 mn hectares of “critical” land and freshwater ecosystems.
• …and mangroves: Channeling USD 4 bn into protection of 15 mn hectares of mangroves.

DECARBONIZATION-

Remove trade barriers for low-carbon tech, says WTO: The World Trade Organization needs to tackle trade barriers impeeding the sharing and use of low-carbon technology, as part of overall decarbonization efforts, according to a report (pdf) it published on Monday, with Director General Ngozi Okonjo-Iweala echoing the message in a Reuters interview. Tariffs for low-carbon industries are often higher than carbon-intensive ones, the report notes. Eliminating such barriers could boost global exports in clean tech — like solar panels or smart heating controls — by 5% by 2030, it adds.

Okonjo-Iweala wants to revive negotiations on a global environmental trade agreement, which stalled in 2016, she told Reuters. WTO discussions on how to use trade mechanisms to promote emissions reduction should also include services — like air pollution mitigation and wastewater treatment — she added.

OTHER PLEDGES-

Kuwait aims to be net-zero by 2060: Kuwait is making “a solid, serious pledge” to achieve carbon neutrality in its oil and gas sector by 2050 and in the whole country by 2060, Foreign Minister Salem Al Sabah told state news outlet KUNA on Monday.

Standard Chartered, African countries seek to “dramatically expand” use of carbon credits in Africa: A group of African countries, along with Standard Chartered, are backing an initiative that would see 300 mn carbon credits produced on the continent annually by 2030, and 1.5 bn by 2050, Bloomberg noted. The countries involved include Kenya, Malawi, Gabon, Nigeria and Togo.

Norway goes big on shipping emissions reduction targets: Norway is aiming to slash its shipping emissions by 50% by 2030, adding new detail on Monday to the “Green Shipping Challenge” agreement it signed with the US in May this year, maritime news outlet Rivera News reported. Norway also joined the Clean Energy Marine Hubs (CEM-Hubs) — a global green maritime fuel initiative of which only the UAE, US and Canada were previously members, after it launched earlier this year — along with Panama and Uruguay, the news outlet added.

OTHER COP NEWS-

The renewable energy sector is poised for huge growth as it emerges as a solution to both climate change and energy security risks, former Bank of England Governor Mark Carney told Bloomberg TV in an interview yesterday (watch, runtime: 10:23).

Apple and PepsiCo have joined the ranks of a corporate buyers club that’s committed USD 12 bn to purchase low-carbon steel and aluminum, among other products — all in the hope of “greenifying” supply chains, Bloomberg reports.

Corporate climate pledges slammed by UN group: 17 UN experts appointed by the UN’s Guterres at COP26 to “review the integrity of non-state net-zero commitments” have concluded that net-zero emissions pledges by companies, banks and cities are “rife with greenwashing,” in a report (pdf) released yesterday. “Too many of these net-zero pledges are little more than empty slogans and hype,” group chair Catherine McKenna said at a presser, according to Reuters.

On the financing front, we saw yesterday a handful of fresh funding commitments, including more countries committing to loss and damage financing and a new “trust fund” to pool together resources to finance the green transition. Heads of state and other big names in the climate scene continued to stress on the importance of equitable adaptation-focused financing for developing nations.

Germany joins a World Bank-hosted fund for loss and damage financing, committing EUR 170 mn: Germany is providing EUR 170 mn for a G7-funded “Global Shield Financing Facility” aimed at increasing “targeted” finance for disaster protection and ins. for the V20 group of 58 nations most vulnerable to climate change, according to Chancellor Olaf Scholz, who spoke on Monday, Reuters reports. Lebanon, Morocco, Palestine, Tunisia, and Yemen are all members of the V20. The World Bank will host the facility, which the G7 countries will pay into, President David Malpass announced at a meeting with Scholz, Reuters reported.

And Austria makes five (countries committing to loss and damage financing, that is): Austria is committing “at least” EUR 50 mn to help developing countries tackle loss and damage over the next four years, the country’s climate ministry told Reuters yesterday. Funds could go towards the UN’s “Santiago Network” — which provides technical support to countries that sustain damage from climate change-induced natural disasters — and an early warning system program, the news outlet reports. Austria will also add another EUR 10 mn to this year’s budget for climate finance, Climate Minister Leonore Gewessler is reported to have said. Austria joins Belgium — which pledged EUR 2.5 mn for loss and damage in Mozambique from 2023-2028, we noted yesterday — as well as Scotland and Denmark, the only other two countries to have ever pledged loss and damage funding — a major theme of this year’s summit.

Separately, the World Bank launched Scale yesterday, the “big trust fund” to “pool funding from the global community — including donor countries, the private sector and foundations — for scalable pathways to greenhouse gas emission reduction,” according to a statement. Malpass had announced the fund in mid-October, we reported. “I think of it as a giant resource need that can be filled by grants from the advanced economies,” Malpass told Bloomberg.

A thumbs up to South Africa’s decarbonization plan could open the door for promised funding: The EU and a handful of wealthy countries that last year committed to provide USD 8.5 bn in the form of grants, loans, investments, and “risk-sharing instruments” to help South Africa decarbonize its economy have endorsed the country’s plan to wean itself off coal — paving the way for the funding to be issued, they said in a joint statement on Monday. The funding will support “coal plant decommissioning; funding alternative employment in coal mining areas; investments which will facilitate accelerated deployment of renewable energy and investments in new sectors of the green economy.”

But South Africa’s President is pushing for a revamp of how climate finance is delivered: South Africa’s President Cyril Ramaphosa wants multilateral development banks to be less “risk averse” in their lending approach, he said during his speech yesterday, saying multilateral support was unobtainable for most of the world (watch, runtime: 16:45). He pushed for more funding in the form of grants and concessional loans, Bloomberg noted. The pledge from the International Partners Group — the US, EU, Britain, France and Germany — to fund South Africa’s decarbonization plan has drawn criticism for reportedly planning to provide some 80% of the USD 8.5 bn pledged as loans rather than grants.

A CHORUS OF CALLS FOR ADAPTATION-FOCUSED FINANCE-

Kerry appeals for “common sense” in climate finance delivery: US climate envoy John Kerry called out the failure of wealthy countries to deliver a promised USD 100 bn in climate finance, while some countries are still investing in fossil fuels, at a panel discussion on climate adaptation yesterday, Bloomberg reported. He warned that USD 11.4 bn in international climate finance promised by US President Joe Biden by 2024 might never materialize if Democrats lose control of Congress in Tuesday’s midterms. “If what I think will happen in today’s elections happens and the House is gone, you’re not going to see that money,” he said.

Adaptation needs to be a climate finance priority — and wealthy countries need to step up, Pakistan’s Prime Minister Shehbaz Sharif said yesterday, calling for “additional and sustained resources” to meet developing countries’ needs “with the speed and scale that’s required” (watch, runtime: 13:02). “A goal on adaptation needs to be prioritized” to help Pakistan — which saw devastating floods earlier this year — rebuild, without falling into a “financial debt trap,” Sharif said.

Big Oil, Western gov’ts came under fire from nations buffeted by extreme weather: Leaders of small island states called yesterday for a global carbon tax to be levied on oil and gas companies as a source of loss and damage funding, Reuters reported. Collectively, these companies see daily net income of some USD 3 bn, while “the planet is burning,” said Antigua’s Prime Minister Gaston Browne, speaking on behalf of the Alliance of Small Island States. Sri Lanka’s President Ranil Wickremesinghe meanwhile slammed the “double standards” of Western governments that have financed the Russia-Ukraine war, while missing climate financing targets (watch, runtime: 8:45). Many developed nations “deem it fit to wait on their climate financing contributions, but seem “to have no qualms spending for a war,” he said.

Gates Foundation CEO Mark Suzman also joined calls for more adaptation-focused investment, telling Reuters that despite increases, funding was still “far short of what is needed.” Multilateral development banks like the World Bank need to do more, Suzman said. The foundation pledged USD 1.4 bn to support smallholder farmers on Monday, we noted.

MENA saw a slew of green and renewable energy projects either being signed or kicked off on the sidelines of COP27 yesterday, but green hydrogen was by far the belle of the ball. We saw the commissioning of a landmark green hydrogen facility in Egypt — the country’s first — along with expectations of more projects in the pipeline. These developments come as green hydrogen is picking up steam in several countries across the region.

#1- Commissioning kicks off at Egypt’s Ain Sokhna green hydro plant: The Sovereign Fund of Egypt (SFE), Norway’s Scatec, the OCI and Adnoc joint venture Fertiglobe, and Orascom Construction began commissioning of the first phase of their 100 MW green hydrogen plant in Ain Sokhna, according to a statement (pdf). The launch came during a COP event attended by President Abdel Fattah El Sisi and Norwegian Prime Minister Jonas Gahr Store.

What they said: “As the first green hydrogen project on the ground, the commissioning is symbolic of how COP27 is the conference of action and implementation,” Egypt’s Planning Minister Hala El Said told Enterprise Climate yesterday. “This project represents a practical response to the need to meet rising energy demand with minimum emissions. The first integrated green hydrogen plant in Africa, delivered in record time, shows what can be achieved when we collaborate around a shared ambition,” UAE Minister of Industry and Fertiglobe Chairman Sultan Al Jaber said.

#2- Progress on the Al Nowais Sokhna green hydrogen project: Al Nowais subsidiary AMEA Power is finalizing the technical details for a USD 800 mn 500 MW green hydrogen plant in the Suez Canal Economic Zone in Ain Sokhna, company’s CEO Hussain Al Nowais told Bloomberg Asharq in an interview on the sidelines of COP27. AMEA Power will cover 70% of the investment cost, with the expected to break ground in 2H 2023, Al Nowais is quoted as saying. The project will be geared towards export to European and Asian markets, he added.

#3- Belgium eyes 500 MW green hydrogen project in Egypt: A consortium of Belgian private and public sector companies including DEME Group, the Port Authority of Antwerp-Bruges, and Belgian utilities company Fluxys presented a feasibility study on establishing a 500 MW green hydrogen plant on Egypt’s north coast, according to an Egyptian cabinet statement. Details of each parties’ investments were not disclosed.

Solar and wind projects are included: The Belgian consortium is looking to establish a 700 MW wind energy plant and an 800 MW solar farm to support the plant’s green hydrogen operations, according to the statement.

Not their first rodeo: DEME Group submitted a USD 3.6 bn proposal to build a green hydrogen project in Egypt’s Suez Canal Zone earlier in October.

#4- Oman’s green hydrogen push continues, with European export-focused MoU: Oman inked an MoU with the Netherlands that will see the two countries cooperate on green energy, specifically green hydrogen, with an eye to develop a route for green hydrogen export to Europe. The agreement will look to help both countries identify “fuel sources and raw material” by supporting existing companies in these fields, as well as supporting knowledge sharing within the overall green hydrogen value chain, the statement notes. Oman recently unveiled an ambitious strategy to increase investment in green hydrogen to USD 140 bn by 2050.

MORE WIND FOR EGYPT-

#5- Egypt lands another massive wind farm: UAE’s Masdar alongside our friends at Infinity Power and Hassan Allam Utilities signed an agreement on the sidelines of COP27 to build a 10 GW wind farm in Egypt, set to be one of the largest in the world, according to a press release (pdf). The agreement was signed in the presence of Egyptian President Abdel Fattah El Sisi and UAE President Sheikh Mohammed bin Zayed Al Nahyan.

The details: The wind farm will have the capacity to produce nearly 48k GWh of clean energy a year, and will offset some 23.8 mn tons of CO2 emissions — equivalent to around 9% of Egypt’s total emissions, according to the statement. It is expected to save the country an estimated USD 5 bn in annual natural gas costs, the statement said. The news comes just a week after Saudi renewable energy developer Acwa Power signed an MoU to build a 10 GW wind farm in Egypt with the country’s state-owned electricity firms.

#6- Scatec wants to add 5 GW to its Egypt wind portfolio: Norwegian renewable energy developer Scatec will look at establishing new wind projects in Egypt with a combined capacity of 5 GW. The firm signed an MoU with the Egyptian Electricity Transmission Company (EETC) and the New and Renewable Energy Authority (NREA) which will see it conduct feasibility studies for the proposed project, Scatec and the cabinet said yesterday.

25 GW: That’s A LOT of power. It’s almost half of the country’s current installed capacity, which at the end of 2021 stood at 59.5 GW, and more than 7x greater than the country’s total renewable capacity, which was 3.4 GW at the end of last year.

ALSO FROM THE GREEN ENERGY PROJECT PIPELINE-

Egypt is still on track to be a renewables exporter to Europe through Greece, Greek Prime Minister Kyriakos Mitsotakis told Bloomberg (interview transcript), referring to the EUR 3.5 bn 3 GW Greece-Egypt Interconnector (GREGY). Egypt and Greece have also previously announced other power linkage projects, including the USD 4 bn, 2 GW EuroAfrica Interconnector with Greece and Cyprus and a possible further 9.5 GW of renewable power for export to Greece. Greece has also been exploring green hydrogen imports from Saudi’s Neom, with plans to lay a cable connecting Saudi to Europe, we reported recently.

UAE’s Averda, WasteFuel to set up waste-to-methanol plant in MENA: UAE-headquartered waste management company Averda is partnering with US-headquartered low-carbon biofuels developer WasteFuel to establish a commercial-scale municipal waste-to-renewable-methanol plant in MENA, according to a statement picked up by Zawya. The plant will produce methanol to be used in shipping from non-recyclable waste currently being collected by Averda, the statement notes. By diverting waste from landfills to produce “renewable” methanol, it will help to decarbonize the shipping industry “at scale,” it adds. The plant’s location is still to be determined, but is expected to be in the UAE’s Jebel Ali. No details were given about investment in the new plant, or the time frame for getting it up and running.

KSA, Oman sign energy cooperation MoU covering renewables, CCUS, and more: Saudi Arabia and Oman signed an MoU yesterday to cooperate on energy — including renewables, carbon capture, use and storage (CCUS), hydrogen, digital transformation in the energy sector, electricity, oil and gas, according to statements from the Saudi Press Agency and Oman News Agency.

Enterprise Climate CEO Poll- Sherif El Kholy, Actis: 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 to discuss key issues including climate finance, regulation, and the green economy.

Sherif El Kholy (LinkedIn) is a partner and the head of MENA at Actis, a private equity firm that has been a top investor in renewables since long before it was cool. PE investment in the sector might be soaring now, but the industry has, by and large, been slow on the uptake. Actis, on the other hand, are seasoned vets when it comes to renewables, having been involved in clean energy projects for well over a decade. As COP gets under way, we talked to El Kholy about the role of private sector in the green transition and what needs to happen to draw more investment to the MENA region.

ENTERPRISE- Private equity has been reasonably late to climate as an investment theme, but Actis has been head-down in this for a long time. What’s with the lag?

Sherif El Kholy- We’ve been down and dirty in this for a very long time: We were one of the first to come into renewables — we did it at a time when it was niche and nobody wanted to look it. A decade later, we’ve owned, operated and developed 15K MW of renewable energy across global growth markets, and we continue to be deeply involved in it.

Now that it’s becoming more mainstream, the sector is attracting more interest, but we’re longtime investors here focusing on building sustainable infrastructure for a better tomorrow — it’s just that there are now a lot of followers coming in. Renewables are now firmly a very viable investment and a lot of capital is going into the theme of energy transition.

We’re also now seeing a lot of capital going into newer themes including green hydrogen; climate adaptation focused strategies, such as district cooling, water desalination, and sewage treatment. These are all mitigation- and adaptation-driven themes. So overall, these thematic investment verticals are becoming broader and they’re all intertwined. It's no longer just wind and solar, though wind and solar are the bedrock.

E: You’ve committed capital there…

S: These newer themes are center-stage for us. In the MENA region alone, we’ve closed two major deals so far this year in Yellow Door Energy, one of the largest solar commercial and industrial (C&I) players in the region, as well as in Emirates District Cooling (EmiCool) — one of the leading players in district energy.

As a leading investor in those spaces and others, we would like to see these technologies spread across the entire region. The spread has so far been uneven.

E: How so?

S: District cooling is very nascent in Egypt, for example, and we’re looking to bring that very important technology to Egypt with EmiCool. There are massive investments to be made. The same with solar C&I — the next phase of renewables in Egypt is diversification beyond utility scale projects with a single government offtaker, to commercial / industrial scale generation and distributed energy solutions.

E: How soon can we expect to hear news on either of those fronts?

S: Both companies are now in some very interesting discussions and our very clear plan is to support each of them and their expansion.

E: You mentioned green hydrogen, and certainly Egypt and other regional players are aggressively chasing investment there. But do you think it has legs given the move in the US toward producer subsidies and suggestions the EU could follow suit?

S: Everyone is now starting to realize that green hydrogen is likely to be a big thing and they’re putting in place incentives to both lock in domestic supplies and establish themselves as hubs. In our case, Egypt has comparative advantages in being so close to Europe, where EU members have so much need for this form of energy. Add to that our very significant renewable generation capacity and unique renewable energy resources. Egypt has a very clear advantage that we need to capitalize on. We need to become the hub for green hydrogen in this part of the world.

E: Can you see the European Union endowing a fund to pay producer subsidies here for green hydrogen destined for European markets?

S: I wouldn’t rule it out.

E: We’re seeing lots of M&A by GCC sovereign wealth funds targeting western renewables companies. What needs to happen to bring this investment to the Middle East?

S: Nothing. It’s coming. I think what’s happening now is at least in part a risk diversification strategy. And you need to remember that capital goes where the yield is. There are good opportunities in western markets right now, so there’s capital chasing it.

But from our experience, the best risk-adjusted opportunities are in global growth markets (GGM), and if anything, the balance is tilting in favor of these markets and not of developed economies. In GGMs, you see risk largely unchanged and yet the returns are attractive and, in cases, improving. In developed markets, you see risk rising, but the reward side of the equation hasn’t gone up in lock step.

E: A young entrepreneur comes to you and says, “Sherif, I want to start a business that you’d invest in five years down the road.” What would you tell her to do?

S: I think she should look at feeder industries related to renewables. Industries where technological innovations are required to make hydrogen a commercially viable thing. And businesses that further bring down the cost of delivering renewable energy to the market.

E: And what about an existing business that wants to put climate at the heart of its business? What’s the first step?

S: It all starts with governance. When we invest in a business, institutionalization is center stage for us — we want to see the right board, the right level and quality of reporting, and the right level of transparency. And then, in every single business we invest in, we create an ESG sub-committee of the board to focus on sustainability. It sets direction on issues including waste management, water use, and decarbonization. It also focuses on all aspects of the “just transition,” which we are firm believers in. We’ve done this across our portfolio, including with Edita [the top snackfoods maker in Egypt] when we were shareholders: We supported the company’s plans to reduce water consumption, transition from LPG to natural gas, cut down on waste emissions, and manage waste more responsibility, and there are many other examples in the leading businesses we have invested in in Egypt over the years.

What would make COP a success, in your view?

It’s a COP for Africa, so I’d like to see mitigation and adaptation funding for Africa — serious international capital coming in to provide the capital needed to drive change and fund companies and projects across the continent, with a big focus on “just transition” and building sustainable infrastructure for a better tomorrow.

EBRD, GEF, lend Taqa Arabia USD 5.5 mn for solar plant: The European Bank for Reconstruction and Development (EBRD) will extend a USD 5.5 mn loan — comprised of USD 4.95 mn from the EBRD and a USD 550k concessional loan from the Global Environment Facility (GEF) — to Taqa Arabia subsidiary Taqa PV for Solar Energy to build and operate a 7 MW solar plant in Minya, Egypt, the bank said in a statement. The loan comes as part of the EBRD’s lending program to green private-to-private renewable energy projects.

Details: The plant, which broke ground last month, will supply electricity to Qalaa Holding subsidiary ASCOM Carbonate and Chemicals Manufacturing under a 25-year PPA.

This is part of a USD 10 mn financing package: The EBRD loaned Taqa PV USD 4.2 mn in 2020 for a 6 MW solar plant supplying electricity to Qalaa Holdings’ Dina Farms, which kicked off operations late last year.

Jordan agrees to trade solar for water from Israel: The two countries inked an agreement that will see Jordan export 600 MW of solar power in exchange for 200 mn cubic meters of desalinated water from Israel, Reuters reports. No details about the cooperation project’s timeline or longevity were disclosed.

Background: Discussions about the agreement started in November 2021, after a letter of intent was signed by both countries. The completion of an initial feasibility study proving the project’s potential, the newswire notes.

Why is this important for Jordan? The Hashemite Kingdom is the world’s second most water-deficient country generating 400 cubic meters below the threshold that defines water scarcity per capita, according to UNICEF. The country already sources 50 mn cubic meters of water from Israel, as per an agreement signed in 2021 between the neighboring countries.

UAE-based DP World will invest USD 500 mn to cut carbon emissions by 2027, the cargo and port terminal logistics company announced via video message at COP27 on Monday. The company is planning to slash emissions up to 700k tons, a 20% cut from 2021 levels. Other sustainability measures taken will include replacing its diesel-powered fleet with an electric one as well as investing in renewables.

Oman’s SWF eyes stake in Acwa + Hassan Allam Holdings wind farm: Oman’s sovereign wealth fund, the Oman Investment Authority (OIA), signed an MoU with Acwa Power to explore investing in a 10% stake in Acwa Power and Hassan Allam Holdings’ USD 1.5 bn, 1.1 GW wind farm, the company said in a statement. That amounts to an investment of USD 150 mn by our math.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Omani OQ Group’s Centralized Utility Company, also known as Marafiq, inked an MoU with the German University of Technology in Oman to support research and innovation focusing on renewables, The Times of Oman reports.
• Dubai Water and Electricity Authority has appointed Ernst & Young as a consultant for the 900 MW phase six of the 5k MW Mohammed bin Rashid Al Maktoum Solar Park, according to WAM. The project will be operational in phases between 2025 and 2027.
• E-mobility companies Electromin and Quantron established a distribution partnership at Riyadh’s EV Auto Show allowing Electromin to distribute Quantron’s EV light truck in Saudi Arabia, Zawya reports,
• KSA’s NEOM is seeking investors for a USD 20 bn brine complex to convert brine produced from desalination into industrial materials, MEED reports.

KSA earmarks USD 25 mn to protect endangered species: As part of KSA’s USD 186 bn Saudi Green Initiative (SGI), the Sharaan Nature Reserve will work to restore 100 hectares of land for ecological rehabilitation projects by 2030, Arab News reports.

Protecting wildlife: Approximately 82.7k square kilometers will protect some 500 species of flora and fauna including 55 species native to the Arabian Peninsula. The Kingdom is funneling USD 25 mn to ensure the longevity of indigenous species including Arabian leopards, ibexes, and oryxes, according to Arab News.

Historic results: The King Salman bin Abdulaziz Royal Natural Reserve (KSRNR) reported the birth of its first wild Arabian Oryx since the 1930s back in June. KSRNR introduced over 400 oryxes into the wild as part of a resettlement program for endangered species — the rare animal had been hunted to near extinction and is listed as a threatened species by the International Union for Conservation of Nature.