Saudi Arabia wants to add 7 GW of renewable energy next year

Good morning, wonderful people. It’s a relatively quiet day on the climate news front in MENA, but we’re happy we’re getting some World Cup action again tonight after a two-day hiatus, with Argentina and Croatia kicking off the semi-final round at 11pm Dubai time.

THE BIG CLIMATE STORY- Saudi Arabia’s 2023 budget goes big on renewables: KSA is considering 10 renewable energy projects to generate some 7 GW, according to the country’s approved 2023 budget.

ALSO- EBRD, GCF give Moroccan SMEs some green love: The European Bank for Reconstruction and Development and the Green Climate Fund are providing a loan of up to EUR 25 mn to Morocco’s Banque Centrale Populaire for on-lending, with a focus on SMEs working on climate change mitigation and adaptation.

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

WATCH THIS SPACE- Adani Group wants to feed MENA’s hydrogen drive: India’s Adani Group signed a tech development and licensing agreement with Australia’s Cavendish Renewable Technology (CRT) for CRT’s electrolyzer technologies, Zawya reports. The aim is to develop hydrogen tech for mass production to meet the demand of MENA and India.

This isn’t Adani’s first foray in the region’s hydrogen space: The conglomerate was said to be exploring the feasibility of hydrogen production in Morocco and Oman last month. Adani also previously signaled it may invest in 10 GW of renewables projects in Morocco to supply green ammonia.

PSA- Egypt is hosting a climate hackathon next month: Egypt-based energy solutions company Elsewedy Electric, VC outfit Flat6Labs and the Knowledge Hub Universities are organizing a clean and deep tech hackathon program from 13-16 January, according to a statement (pdf). The hackathon will enable graduates of Elsewedy’s Graduate Development Program and Coventry University students to pitch tech solutions for climate-focused sectors including smart cities, agritech, energy, industry 4.0, and water management.

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THE BIG CLIMATE STORIES OUTSIDE THE REGION- EU closes in on agreement to impose levy on imported goods with heavy emission footprints: The EU Parliament convened yesterday to discuss the proposed Carbon Border Adjustment Mechanism (CBAM), which would impose a carbon tariff on imported goods that contribute to emissions. The CBAM would require the purchase of carbon certificates for cement, iron, and steel imports, among other polluting industries, to protect local industries and expedite the continent’s green transition. (Reuters | Bloomberg | Euronews)

Nuclear fusion will probably be all the rage today: US Energy Secretary Jennifer Granholm is set to announce news of a “major scientific breakthrough” on nuclear fusion in a media briefing today, media outlets report the US Department of Energy as saying. (Reuters | Bloomberg | CNN | CBS | Washington Post)

Wait, what’s nuclear fusion? It’s literally the type of reaction that powers the sun — it involves smashing together molecules of, say, hydrogen using a laser in a process that releases more energy than you put in to create the reaction in the first place. The announcement will likely see US scientists have for the first time produced more energy from a fusion reaction than it consumed.

^^ We get deeper into the nuclear fusion breakthrough in the news well, below.

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HAPPENING TODAY-

Tunisia will host the International Renewable Energy Congress today through Thursday in Hammamet. The event will provide a platform for researchers and industry leaders to showcase trends in the renewable energy sector.

CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Future Minerals Forum on Tuesday, 10 January to Thursday, 12 January at the King Abdulaziz International Conference Center. The forum will discuss the region’s critical minerals supply and creating resilient and responsible minerals value chains for the energy transition.

FURTHER DOWN THE LINE- UAE renewable energy firm Masdar will host Abu Dhabi Sustainability Week from Saturday, 14 January to Saturday, 21 January. The event will gather eight presidents and prime ministers and 30k participants in a series of conferences and summits including the Atlantic Council’s Global Energy Forum, the World Future Energy Summit, Masdar’s Green Hydrogen Summit, The International Renewable Energy Agency’s Youth Forum, and the Abu Dhabi Sustainable Finance Forum.

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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IMAGE OF THE DAY- Macabre methane monument: Delhi’s Bhalswa landfill stands 62 meters high with thousands of kgs of waste dumped in it daily as “Delhi doesn’t have a concrete solid waste action plan in place,” CNN reports, citing the country’s Center for Science and Environment. The landfill emits greenhouse gasses and toxins polluting the air and water and 14 fires have broken out so far this year as the methane in the trash overheats.

Saudi Arabia’s 2023 budget goes big on renewables: KSA is planning to develop 10 renewable energy projects to generate a combined 7 GW, according to the country’s approved 2023 budget (pdf). No details were given about the individual projects or the types of renewable energy. The planned projects are part of the SAR 72 bn earmarked for the kingdom’s economic resource development, which covers environmental infrastructure, energy sources, and desalination, as well as industry, tourism, and SME development, among other areas.

What else is in the pipeline? KSA is allocating SAR 34 bn for its transport and basic equipment sector, while earmarking an undisclosed chunk to mitigating carbon emissions from maritime transport systems through the development of its railway network. The Kingdom also plans to establish a climate change center in Jeddah in 2023, and says it will be developing its Al Khobar Corniche as the country’s first environmentally friendly beach under its SAR 63 bn municipal services budget.

Some notable achievements in 2022: The Kingdom signed MoUs for the construction of its first nuclear-powered electricity generation plant, and power purchase agreements totalling 1 GW from its Saad, Layla, and Ar Rass solar power projects, which the kingdom estimates will add some SAR 2.9 bn to its coffers, according to the budget document. Another agreement will see 80% of all EVs produced by US-based EV manufacturer Lucid Motors produced in Saudi Arabia by 2030. The Public Investment Fund (PIF) USD 3 bn sale in green bonds in October were almost 6x oversubscribed, as we previously wrote.

Morocco secures loan to support climate-focused SMEs: The European Bank for Reconstruction and Development (EBRD) and the Green Climate Fund (GCF) are providing a loan of up to EUR 25 mn to Morocco’s Banque Centrale Populaire (BCP) for on-lending to private sector entities — particularly SMEs — working on climate change mitigation and adaptation, according to a statement issued by the EBRD yesterday. This is the third facility to be provided to BCP by the EBRD under the Green Economy Financing Facility (GEFF), the statement says.

A raft of support to build BCP’s capacity: The EBRD, EU, and GCF are also providing a technical cooperation package that includes a EUR 4.4 mn grant to build BCP’s capacity and conduct awareness-raising activities on climate change and mitigation tech among the on-lending beneficiaries, the statement notes. These funds will also be used in the preparation, implementation and monitoring of the on-lending program, it adds.

Driving investment in climate change mitigation and adaptation tech: The EU will provide another EUR 2.7 mn grant to BCP to be used as a 10% cashback incentive for the on-lending beneficiaries once their projects have been successfully implemented, the statement notes. This is being done to encourage investment in climate change adaptation and mitigation tech, it adds.

A push to reduce gender disparities in accessing green finance: BCP’s staff will receive training on gender-responsive green finance — an approach that aims to “integrate gender-based factors in investment and lending processes” — to help offset gender-specific issues around financing climate projects, the statement notes.

This is one more boost for regional on-lending to climate focused SMEs: Jordan is set to receive USD 40 mn for on-lending from the EBRD, EU and GCF through the GEFF program, which has already financed facilities worth USD 22 mn to the country so far this year. Morocco’s Bank of Africa – BMCE Group recently secured EUR 13 mn in loans to use for on-lending to SMEs, with EUR 9.75 mn of this funding coming from the EBRD and EUR 3.25 mn from the GCF, and the EU providing a separate EUR 1.43 mn grant. Last year, the EBRD greenlit a USD 25 mn loan to the National Bank of Kuwait Egypt in April, a USD 50 mn loan to QNB AlAhli in June, and a USD 100 mn facility to Egypt’s Banque Misr in November.

IN OTHER CLIMATE FINANCE NEWS-

The EBRD is providing a new EUR 100 mn loan to Morocco’s government-owned Société Nador West Med for construction of the Nador West Med Port, according to a statement (pdf). The loan is an additional second tranche issued under a EUR 200 mn loan agreement reached in 2015, the statement notes. The EBRD will also extend a EUR 1 mn technical cooperation package to assess the port’s potential role in the hydrogen value chain, the statement notes. Société Nador West Med was created specifically to develop the port.

Vortex Energy invests another EUR 46 mn of equity capital in Spain’s Ignis Energia: EFG Hermes’ clean energy investment platform Vortex Energy has invested EUR 46 mn of equity capital investment in Spain’s integrated renewables group Ignis Energia, Egyptian media outlet Al Borsa stated yesterday. The investment was made through the Vortex Energy IV Fund — which reached its first close of USD 200 mn in July 2021 — Al Borsa noted. A representative from EFG Hermes declined to comment when Enterprise Climate reached out.

This is part of a planned EUR 625 mn equity investment that could eventually see Vortex owning a 49% stake in Ignis, the two companies announced in a joint statement (pdf) in October 2021. In return, Vortex will receive an equity stake — reported by Reuters to be 49% — in Ignis. Vortex is due to invest a further EUR 176 mn of equity capital in Ignis in 1Q 2023, according to a June 2022 statement (pdf).

By our calculation, Vortex has now invested EUR 268 mn into Ignis, following its announcement in June that it had invested EUR 222 mn so far. The remaining EUR 181 mn is due to come over the course of 2023, Vortex Energy CEO Karim Moussa told EnterpriseAM at the time.

Ignis is using the investment to expand its portfolio, EnterpriseAM reported previously. Ignis has secured permits to add over 1 GW of capacity since the start of its partnership with Vortex, and as of June was set to begin construction on around half of that within months, EnterpriseAM reported. Most of this will be on solar projects in Spain, Moussa told EnterpriseAM. Ignis has been involved in developing some 14 GW of solar and wind projects inside Spain and c.11 GW in other parts of the world — primarily Italy, the US, and the UK, he added.

Advisors: Santander and Royal Bank of Canada were financial advisors on the EUR 46 mn capital injection, while Watson Farley Williams served as legal advisor. Citi provided financial advisory services and Cuatrecasas provided advisory services, according to Daily News Egypt.

A nuclear fusion breakthrough could spell good news for clean energy — and MENA: Scientists at a California lab have reportedly made a breakthrough on nuclear fusion energy, paving the way for an “abundant zero-carbon alternative to fossil fuels,” the Financial Times reports, citing three sources with knowledge of the matter.

In a nutshell: A recent experiment at the lab saw the first ever net energy gain — meaning more energy was produced than consumed — from a fusion reaction. Fusion power is high-energy and produces virtually no carbon and no radioactive waste, but traditionally, reactions have always consumed more energy than they produced. In the recent experiment, an estimated 2.5 megajoules of energy was produced — that’s 120% of the 2.1 megajoules of energy used to power the reaction. This could be a major step towards providing an alternative to fossil fuels and conventional nuclear energy, the FT notes.

SOUND SMART- Nuclear fusion is a reaction that could potentially generate unlimited energy by fusing atoms’ nuclei — as opposed to splitting the nuclei in a conventional nuclear fission reaction. Fusion reactions, which power stars, need temperatures equivalent to 100-200 mn °C, so it had been relegated to the realm of science fiction. The total addressable market for the energy source is on the order of USD 1 tn per year, former CEO of General Fusion Christofer Mowry told Bloomberg (watch, runtime: 20:38).

The UK previously made some strides in this area, having greenlit the world’s first fusion station in October. The caveat: The UK government said that there are “no guarantees” that the GBP 20 bn plant, which is set to be complete in 2040, will work.

And the technology is receiving considerable investments from governments and VCs globally. Canadian startup General Fusion, founded in 2002, has attracted investors such as Amazon CEO Jeff Bezos. Another nuclear fusion startup creating a lot of buzz is Helion Energy, which raised USD 500 mn in its series E funding round, and has attracted renowned investors such as co-founder of Paypal Peter Thiel and former president of Y Combinator Sam Altman, according to Bloomberg Quicktake (watch, runtime: 22:31).

THE HOMETOWN ANGLE- Bill Gates thinks MENA can be a hub for nuclear energy: Bill Gates emphasized the impact MENA nuclear power projects — such as the Barakah nuclear energy plant in the UAE — have in helping accelerate the transition to low-carbon energy sources, the National reported in October.

The region could leapfrog into fusion: MENA could lead by developing nuclear fusion reactors that “are safe and cheaper than traditional energy sources,” Gates noted. But up until yesterday, researchers have been able to generate well beyond 100 mn °C during experiments, but were unable to sustain fusion power for more than five seconds.

GO DEEPER- Check out this Twitter thread on why nuclear fusion is much closer to becoming reality than we think.

Oman is getting an e-waste recycling facility… Canadian waste management outfit ERS International is launching Oman’s first e-waste recycling facility in 1Q 2023, Access Wire reported. The facility — located in the Dhofar province capital Salalah — aims to process at least 500k pounds of discarded electronic devices in its first year of operation. Oman has been exporting e-waste and storing some in anticipation of opening a recycling facility, the statement notes.

…and sets a date for USD 1 bn green ammonia project: The Marubeni-led consortium’s one mn ton per annum green ammonia SalalaH2 project is projected to become commercially operational by 1Q 2028, the Oman Observer reports. The plant will have a generational capacity of 1k tons per day and will be powered by nearly 4 GW worth of electricity produced by pre-existing or new wind and solar power plants, the news outlet notes. Japan’s Marubeni is the largest developer in a consortium which includes Oman’s OQ Alternative Energy and German chemicals company Linde.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Amea Power’s 100 MW solar plant in Tunisia will break ground in 2H 2023. The solar facility in northern Tunisia’s Kairouan is part of a national push to build solar plants with a combined capacity of 500 MW across the country. (Babnet)

• KSA’s King Abdullah Petroleum Studies and Research Center inked an agreement with China’s Economics & Technology Research Institute to cooperate on energy and environment research. (Saudi Gazette)
• The UAE approved the second phase of Dubai’s 2040 Urban Master Plan with a focus on enhancing food security and reducing the city’s carbon footprint. (Statement)