Oman’s renewable energy projects could be getting a financing boost from the US

Good morning, friends, and welcome to Enterprise Climate’s 100th issue. We hope you’ve enjoyed reading our regional round-up of all things climate industry-related and beyond. It’s been a pleasure so far and we look forward to continuing for years to come.

THE BIG CLIMATE STORY- The US Export-Import Bank could provide Oman with USD 500 mn in financing to purchase a range of US goods and services including in the renewable energy sector under an MoU signed on Thursday. We have chapter and verse on this story and more in the news well below.

THE BIG CLIMATE STORY OUTSIDE THE REGION-

US President Joe Biden’s nomination of ex-Mastercard CEO Ajay Banga as World Bank’s president last Thursday was welcomed with positive fanfare at the G20 meeting over the weekend. Banga will be left to navigate an overhaul of the World Bank’s approach to climate financing and lending priorities after outgoing president David Malpass was criticized for being too ineffectual in financing climate initiatives and for the bank’s continued support for fossil fuel projects. Banga secured a round of endorsements from the world’s top finance leaders on Friday in India, leaving his confirmation in May all but assured. Member countries will have until March 29 to submit their nominations for alternative candidates and the World Bank’s board will announce a choice by early May.

The story attracted widespread coverage in the international press over the weekend: AP | Reuters | Bloomberg | Financial Times | Wall Street Journal | New York Times | Washington Post.

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HAPPENING TODAY- The Annual Gulf Ins. Forum kicks off in Dubai. The event will host panel discussions on sustainable ins. for ESG, the role of Gulf ins. companies in securing renewables, the future of ins. for Autonomous Vehicles (AVs), ins. solutions to address climate change and environmental pollution, and the banking sector’s experience in issuing green and sustainability bonds.

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WATCH THIS SPACE #1- Scatec becomes the latest to propose an Egypt-Europe electricity link: The CEO of Norwegian renewable energy developer Scatec proposed a new electricity interconnection project between Egypt and Europe in a meeting with Egyptian Prime Minister Moustafa Madbouly last week, according to a cabinet statement. The project would be backed by the Norwegian government, and would export power generated by renewable energy to Europe via a 3-GW link, according to the plan put forward by CEO Terje Pilskog.

Renewables on the agenda: The Norwegian company plans to sign a joint development agreement for a USD 5.5 bn green ammonia plant in Ain Sokhna with Egyptian Petrochemicals Holding Company (ECHEM) and state fertilizer company Mopco, the statement said, without disclosing a timeline or details on the planned facility.

WATCH THIS SPACE #2- Algeria earmarks USD bns for its green hydrogen sector: Algeria will allocate between USD 20-25 bn to boost its green hydrogen production capacity, Director of Economic Studies at Algeria’s Energy Ministry Miloud Medjelled said in an interview with Algerian Radio (watch, runtime: 17:07). Medjelled did not disclose the time frame of the country’s investment plan. Algeria signed an agreement with German gas firm VNG AG to co-develop a 50 MW solar-powered green hydrogen facility in the country last December and has a target to generate 15 GW from solar power projects by 2035, Medjelled added.

WATCH THIS SPACE #3- The EIB is seeking investors to fund Morocco’s green hydrogen projects: The European Investment Bank (EIB) is in talks with several private sector investors and the Moroccan Agency for Sustainable Energy (Masen) to explore investment opportunities in the country’s green fuel sector, EIB’s Director Lionel Rapaille told Asharq Business. The bank aims to get new green hydrogen production projects off the ground by 2025, though Rapaille notes that the country needs to attract “mns of EUR” in investments to realize that goal.

WATCH THIS SPACE #4- India’s Tata Motors wants Gulf investment for its EV unit: Indian automaker Tata Motors is in discussions with Gulf sovereign wealth funds and investors — including Saudi Arabia’s PIF, the Abu Dhabi Investment Authority, and the Mubadala Investment Company — to raise up to USD 1 bn through the sale of a “significant” minority stake in its EV business, Reuters reports, citing a report by The Economic Times. The company is also reportedly in talks with Singapore’s Temasek Holdings, KKR and General Atlantic. The majority of the proceeds will be used to pay off some of the company’s debt, while a small portion will be “infused” as primary equity in its EV unit, Reuters wrote, adding that the company is eyeing a valuation of about USD 10.5 bn.

Background: The company raised USD 1 bn for its EV arm from Abu Dhabi’s state holding company ADQ and US-based private equity firm TPG at a USD 9.1 bn valuation in 2021, and plans to invest USD 2 bn to advance its EV unit by 2026.

ICYMI- COP28 President Sultan Al Jaber said the UAE will explore “all opportunities” to partner with India to help develop the country’s low carbon infrastructure last week, pointing to India’s goal of bringing 500 GW of renewable energy online within the next seven years as “a powerful statement of intent.”

WATCH THIS SPACE #5- Qatar’s Qafco eyes blue ammonia production: The Qatar Chemical Fertilizer Company (Qafco) will begin producing blue ammonia by the end of 1Q of 2026, company COO Ahmed Rahimi told Asharq Business last week. The investment allocated to the project amounts to USD 1 bn, Rahimi added.

Qafco is the largest integrated producer of ammonia and urea in the world: The company produces 4 mn tons of ammonia and 6 mn tons of urea per year.

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COME TO OUR NEXT ENTERPRISE FORUM-

We are delighted to share with you that the Enterprise Exports & FDI Forum will be taking place on 15 May at the Four Seasons Hotel at Nile Plaza in Cairo.

DO YOU WANT TO ATTEND? The first wave of invites is going out soon. If you’re a C-suite exec, exporter, investor, official, banker, or someone who should be part of the conversation, please click here to request a spot at this exclusive event.

What’s the Enterprise Exports & FDI Forum? It is the latest in our series of must-attend, invitation-only gatherings for C-suite-level business leaders. The Enterprise Exports & FDI Forum will discuss the critical topics of exports and foreign direct investment (FDI) in Egypt.

We will be taking an in-depth look into some of the most vital industry topics, including:

• How to effectively break into new export markets
• How to leverage domestic trends in order to create export opportunities
• What foreign investors are looking for
• What the government’s role should be

Why now? Exports and foreign direct investment (FDI) have never been more important to Egypt’s economy — or businesses — than in the wake of the float of the EGP. We think we have a once-in-a-lifetime chance to build an export-led economy that makes Egypt a magnet for FDI, and all the benefits that will come with it.

Think of the Enterprise Exports & FDI Forum as a hands-on lab for how to turn the devaluation of the EGP into something that will turbocharge your company and our economy.

Who’s on board? Some of the biggest names in business and finance are on board — are you? If you’d like to partner with us on the conference, ping a note to Moustafa Taalab, our head of commercial, here.

CIRCLE YOUR CALENDAR-

Egypt will host the CSR Forum from Thursday, 2 March to Sunday, 5 March in Somabay, Hurghada. The event aims to further discussions put forth during COP27 and boost private and public sector cooperation on climate action. You can register for the event here.

Qatar will host the Earthna Summit from Wednesday, 8 March to Thursday, 9 March in Doha. The event will bring together industry leaders and policymakers to explore tailored solutions for the energy transition in hot climates. You can register for the event here.

The Arabia CSR Awards is accepting applications until Friday, 30 June. The awardwinners will be announced during a ceremony on Wednesday, 4 October.

The first MENA Solar Conference is accepting applications from published researchers specialized in PV technology until Sunday, 30 April. The Dubai Electricity and Water Authority will be hosting the conference from 15 to 18 November, in conjunction with the Water, Energy, Technology, and Environment Exhibition and the Dubai Solar Show 2023. Researchers can submit their papers here.

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

Oman could get US financing for renewables investment: The US Export-Import Bank (EXIM) could provide Oman with USD 500 mn in financing to purchase a range of US goods and services including in the renewable energy sector under an MoU signed last week, the export credit agency said Thursday. The agreement will see the two sides “explore options” for using EXIM financing, as well as promoting trade and investment in strategic sectors of Oman’s economy, according to a joint statement. No information was disclosed about the timeframe for dispersal of the funds.

What exactly is EXIM? EXIM is the official US export credit agency which offers financing including export credit ins., working capital guarantees, loan guarantees, and direct loans, the statement notes.

The details: The two countries will cooperate within key areas including clean energy, trade and investment, the joint statement notes. They looked at potential collaboration in areas including carbon removal, clean hydrogen and industrial decarbonization, clean energy policy, methane emissions reduction, Oman’s net-zero plans and COP28 participation. They also explored ways of working more closely on climate finance, research and knowledge sharing around decarbonization. Trade and investment discussions included maximizing the United States-Oman Trade Agreement, boosting investment and trade in areas including mining and agribusiness, and the issue of tariffs.

The MoU is part of a broader collaboration between Oman and the US: The MoU was signed at the end of the first ever Strategic Dialogue meeting between the US and Oman, which took place in Muscat last Thursday and aims to “build upon the strong partnership between the two countries,” according to the joint statement. US Undersecretary of State for Economic Growth, Energy, and the Environment Jose Fernandez led the US delegation at the Strategic Dialogue, where he met with senior Omani officials to discuss issues including approaches to the climate crisis and how to build more resilient supply chains, according to a US government statement.

ALSO- The US is holding climate-focused partnership discussions with the UAE: Fernandez also visited the UAE last week to attend the I2U2 Business Forum held in Abu Dhabi last week, according to a separate statement. The forum offered partner countries Israel, India, the UAE and the US the chance to look at ways of advancing cooperation in areas including management of the energy crisis and food insecurity. Fernandez met with senior UAE officials to discuss partnership in areas including clean energy and food security.

Masdar + Taaleri Energia inaugurate solar park in Jordan: UAE renewables firm Masdar and Finland-based investment management company Taaleri Energia have inaugurated the 200-MW Baynouna Solar Park in Jordan, according to a statement out Saturday. The project was developed via a power purchase agreement between Masdar and Jordan’s state electricity provider, the National Electric Power Company, and has been in commercial operation since 2020.

The details: The USD 260 mn project generates 560 GWh of electricity a year and offsets 360k tons of CO2 emissions, making it the largest clean energy project in Jordan. The project is expected to produce enough energy to power nearly 160k homes.

Who’s footing the bill? Financial institutions including the International Finance Corporation, the OPEC Fund for International Development, the KfW Group’s DEG, and the Japan International Cooperation Agency supported the project.

Background: Established in 2016, the Baynouna Solar Energy Company is a joint venture project established in 2016 between Masdar — who own a 70% stake — and Finland’s Taaleri Energia who own the remaining 30%. The two companies invested USD 230 mn into the company, according to Baynouna’s website.

Masdar already has assets in the country and more in the pipeline: The renewables giant inaugurated the USD 287 mn, 117-MW Tafila wind farm in the country’s governorate of Tafila in late 2015. The wind farm upped the country’s power production capacity by 3% when it became operational in September of that year. Masdar also inked an agreement with the Jordanian energy ministry to develop an additional 2 GW of renewable energy projects in the country, according to the statement.

Masdar makes an entry into geothermal energy: Emirati renewables giant Masdar has acquired shares in the geothermal unit of Indonesia’s state-owned energy firm Pertamina, according to a company statement. The value and size of the stake were not disclosed.

About Pertamina Geothermal: The state-owned energy company is one of the world’s largest producers of geothermal energy. It currently owns nearly 82% of Indonesia's installed geothermal energy capacity, and manages 13 geothermal energy projects which generate 1.87 GW of electricity, according to its website.

Targets: Pertamina wants to generate an additional 600 MW of geothermal power by 2028 in line with the country’s target to source 23% of their energy needs from renewables by 2025, according to the statement. Indonesia is expected to increase geothermal production volume to 3.4 GW in 2023, up from 2.8 GW in 2022, according to Pertamina estimates.

This is not Masdar’s first entry into Indonesia’s renewables sector: Masdar signed a power purchase agreement with the country’s electricity company, Perusahaan Listrik Negara, for a 145 MW Cirata floating solar power plant in 2020. More recently, it signed an agreement last year to co-develop solar energy projects worth 1.2 GW with Tuas Power, EDF Renewables, and PT Indonesia Power with an eye on exporting the energy to Singapore.

The company just opened an office in the country: Masdar opened an office in the Indonesian capital last week as it continues to expand its presence in the region.

UAE’s M Glory wants to set up EV assembly plants across MENA: UAE-based car manufacturer M Glory Holding plans to establish three electric vehicle production factories across MENA in Egypt, the UAE, and Jordan with an investment ticket of USD 550 mn, WAM reports. The agreements signed come as part of a raft of industrial agreements signed between the UAE, Egypt, Jordan, and Bahrain at a meeting for the Industrial Partnership for Sustainable Economic Development worth USD 2 bn, the statement notes. The timeframe for the projects has not been disclosed.

The details: The company signed agreements with the Egyptian military’s Arab Organization for Industrialization and Jordan’s Design and Development Bureau as manufacturing partners, and signed an agreement with Bahrain’s Gulf Aluminium Rolling Mill (Garmco) to source aluminum sheets, the news agency notes. M Glory is planning to produce 40k electric crossover SUVs in the first three years of operation.

M Glory owns the UAE’s first EV assembly plant: Al Damani Auto — owned by M Glory — inaugurated the UAE’s first EV assembly facility last December. The AED 1.5 bn EV plant can currently assemble 10k cars annually but plans to raise the production capacity to 55k cars per year over the coming few years. The factory will likely produce two models of Al Damani DMV300, which has a battery capacity of 52.7 kWh and can cover over 405 km on a single charge.

Lucid Group reports 32% q-o-q increase in 4Q 2022 revenue but is yet to break even: US-based EV manufacturer Lucid Group reported a 32% q-o-q increase to USD 258 mn in its 4Q 2022 revenue, up from USD 196 mn in 3Q 2022, according to its recent earnings release. Lucid’s 4Q 2022 revenue saw a whopping 876% y-o-y increase, up from USD 26.4 mn in 4Q 2021. The company has yet to turn a profit, but reportedly told the Wall Street Journal that its losses had narrowed to USD 2.56 bn in 2022, down from USD 4.75 bn in 2021.

Steady production growth despite general market uncertainty: Lucid produced some 3.5k vehicles in 4Q 2022, compared to 400 in 4Q 2021. Its 2023 vehicle production target stands at 10-14k vehicles — well up from its 2022 target of 6-7k vehicles, the recent earnings release notes. The 2023 target is “…representative of the degree of uncertainty in the marketplace,” Chief Executive Peter Rawlinson told the news outlet, while Chief Financial Officer Sherry House added that market uncertainty and higher interest rates are impacting consumer purchasing.

What they said: “2022 was “a challenging year for everyone,” due to “extraordinary supply chain and logistics challenges,” noted Rawlinson in Lucid’s earnings release. Still, Lucid managed to scale every part of its business last year, House is quoted as saying. 2023 will see further growth along with “comprehensive” cost reduction, she added.

Background: Saudi Arabia’s sovereign wealth fund PIF invested over USD 1 bn in Lucid Motors — the brand name of Lucid Group — in 2018, to hold a majority stake of over 65% in the firm. The company debuted on the Nasdaq in July 2021, after merging with the special-purpose acquisition company (SPAC) Churchill Capital IV. In April 2022 the government of Saudi Arabia signed an agreement with Lucid to provide 100k vehicles to the Kingdom and construction of the company’s Saudi Arabia production plant began in May 2022, kickstarting its initiative to have 80% of all EVs produced by Lucid be made in Saudi Arabia by 2030, and 155k EVs produced annually in the Kingdom by 2025, Lucid’s Vice President for MENA said. In January, rumors circulated that PIF was eyeing an acquisition of the remaining shares.

US investment in renewables is growing rapidly, but grid connection spells problems: Despite record US investment in low-carbon technologies — spurred by President Joe Biden’s landmark climate bill, the Inflation Reduction Act (IRA) — plans are failing to translate into action due to the outdated grid systems delaying projects, according to a New York Times long read out last week.

What kind of challenges are renewables providers facing? Recent soaring volumes of new connection requests and the limited capacity of local grids to accommodate new energy provision are key challenges in getting projects off the ground — requiring investment in grid upgrades and causing delays that ultimately impact project viability, the NYT notes.

And just how many projects are getting held up? Fewer than one-fifth of solar and wind proposals make it through the “interconnection queue” to begin the process of grid connection, according to the newspaper, citing research from Lawrence Berkeley National Laboratory. Some 8.1k energy projects — mostly renewables — were waiting for interconnection to different regional grids in the US at the end of 2021, up from 5.6k at the end of 2020.

If these issues aren’t resolved, the IRA will do little to slash US emissions: Electricity production currently generates some 25% of US greenhouse gases, according to the NYT. Though Biden’s IRA will provide some USD 370 bn in subsidies to boost low-carbon energy production — aiming to greatly reduce these emissions — it fails to tackle many practical barriers to getting projects off the ground, the NYT notes. These impediments, including delays in permit issuance, transmission constraints, and local opposition, could ultimately prevent the regulation from serving its intended purpose of emissions reduction, note unnamed experts cited by the publication.

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Whale detection tech to boost marine conservation: Offshore wind power developer Vineyard Wind is trialing an AI-powered computer detection system developed to avoid collisions with whales and other marine mammals, Bloomberg reports. Vessels transporting turbines to Vineyard’s USD 3 bn, 62-turbine project will be kitted with infra-red and visible light-sensitive cameras enabling 360-degree sweeps of the waters they traverse, providing an artificial intelligence algorithm with the intel it needs to determine the nature of objects in the vicinity of the turbine-ferrying ships.

Acwa Power’s 100 MW solar tower in the fourth phase of Mohammed Bin Rashid Al Maktoum Solar Park in Dubai is now operational, the company said in a filing to the Saudi stock exchange last week. This brings the current production capacity of the 950 MW fourth phase of the 5 GW project to 517 MW. Noor Energy 1 — a company co-owned by Acwa Power and Dubai’s Water and Electricity Authority established to develop the fourth phase of the project — had reported that the phase was 92% complete back in January. Acwa expects the fourth phase to be entirely operational by 1Q 2024.

The UAE, India, Israel and the US are exploring the possibility of setting up a 300 MW wind and solar station in India’s Gujarat under their I2U2 platform, Wam reported last week. The I2U2 group is a quadrilateral platform established in 2021 by the four countries to “encourage cooperation on geo-economic initiatives.” During the bloc’s first virtual meeting last July, the countries agreed to Emirati and Israeli support for USD 300 mn worth of clean energy projects in India.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Saudi-based food processing and packaging solutions company Tetra Pak Arabia signed a EUR 7.6 mn agreement with KSA’s Alesayi Beverage Corporation to provide the latter with processing equipment for its solar-powered beverage production facility in Jeddah, Saudi Arabia. (Zawya)
• Abu Dhabi’s Barakah Nuclear Power Plant’s third unit began commercial operations on Friday, adding 1.4 GW of clean electricity to the UAE’s national grid. (Statement)

Omani students develop graphene-based solar panel technique: Engineering students at Oman’s Sultan Qaboos University have developed a solar panel production technique that relies on polyethylene and graphene instead of crystalline silicon, according to Times of Oman. The new method can yield elastic, durable panels that are 60% more efficient at absorbing light than silicon-based alternatives, according to the students. The team will continue research with plans to manufacture solar cells at their university’s lab using locally sourced polyethylene.