Acwa Power continues Uzbekistan expansion

Good morning, wonderful people, and welcome to a busy start to the week. We have a raft of regional updates to get through so let’s dive right in.

THE BIG CLIMATE STORY- Saudi renewable energy giant Acwa Power has signed a USD 2.5 bn power purchase and investment agreement with Uzbekistan's Energy Ministry to develop two solar stations and three storage facilities, and Italian energy giant Eni inked an agreement with UAE’s Adnoc for cooperation for future energy transition projects including green hydrogen and carbon capture.

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

THE BIG CLIMATE STORY OUTSIDE THE REGION- UN finalizes historic marine conservation agreement: Over 100 countries struck a landmark agreement over the weekend to protect at least 30% of international waters by 2030. The UN High Seas Treaty reportedly took over 36 hours of negotiations before being hammered out on Saturday. Notable sticking points stalling the consensus included a clause on the share of “marine genetic resources,” with negotiators reportedly locking horns on the division of rewards from new marine resources. The treaty — which would provide a framework for the establishment and management of marine protected regions and set out environmental requirements for deep sea exploration — has been under discussion for 15 years, and would build on the UN’s Law of the Sea convention. 11 mn square kilometers of ocean would need to be placed under protection between now and 2030 to realize the treaty’s target, according to Greenpeace.

The story got widespread coverage in the international press: Reuters | Bloomberg | Financial Times | Financial Post | Bloomberg| Washington Post | The New York Times | BBC | AP News | The Guardian

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WATCH THIS SPACE #1- Denmark discusses renewables investments in Egypt: Egypt’s Planning Minister Hala El Said met with a delegation from Copenhagen Infrastructure Partners (CIF) to discuss joint cooperation on potential investments in Egypt’s green sector, according to a cabinet statement on Saturday. No information was disclosed on which specific projects were discussed. CIF has approximately EUR 20 bn invested in wind and solar energy around the world, according to the statement.

WATCH THIS SPACE #2- Masdar gets its sustainability ducks in a row: UAE renewables giant Masdar’s inaugural Green Finance Framework (GFF) has received a sustainability score of SQS1 — the highest rating — from Moody’s Investors Service ahead of its first planned green bond offering this year, according to a company statement released on Friday. The GFF will act as a reference for any green financial instruments by Masdar to help finance investments for projects locally or abroad, the statement said. It will provide adequate information to allocate the proceeds from the instruments in a way compatible with the highest ESG investors, it added.

WATCH THIS SPACE #3- UK energy giant Shell is reviewing plans to slash its oil output by 1-2% yearly by the end of the decade, Reuters quotes Shell CEO Wael Sawan as telling The Times on Friday. The company notes that it may backtrack on its oil slashing target depending on “right market guidance.”

WATCH THIS SPACE #4- Aramco inches closer to joining new Renault-Geely JV: Saudi energy giant Aramco signed a non-binding letter of intent last week to obtain an undisclosed minority stake in a new Renault-Geely joint venture, according to a joint statement released last week. Aramco was reported in January to be targeting a 20% stake in the Renault-Geely JV, with Renault and Geely retaining 40% each. The new company will produce vehicles with internal combustion engines and hybrid and hybrid plug-in electric vehicles, targeting a combined annual production capacity of 5 mn cars once operational. Aramco’s planned investment in the project was not disclosed in the statement, but the companies noted it would be channeled toward hydrogen and synthetic-fuel-focused research. The venture will have a network of 17 powertrain plants and five research and development centers across three continents, the statement notes.

WATCH THIS SPACE #5- Egypt established a working group tasked with drafting incentives for green hydrogen production, according to a cabinet statement published last week. The group will submit proposals within two weeks, timed with the expected release date for Egypt’s long-awaited hydrogen strategy. Egyptian Prime Minister Moustafa Madbouly stressed that the incentive policies are crucial for activating the preliminary agreements already signed, while also attracting more investments to the nascent sector.

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CLIMATE DIPLOMACY- Egypt and Hungary discussed renewables cooperation: Egypt’s International Cooperation Minister Rania Al Mashat and Hungary’s Foreign Affairs Minister Péter Szijjártó discussed renewable energy and transportation among other areas of cooperation during a meeting last week, according to a cabinet statement. The meeting took place at the Egyptian-Hungarian Business Forum, two days after President Abdel Fattah El Sisi and Hungarian Prime Minister Viktor Orbán focused on boosting economic ties between the two countries — including boosting Hungarian investments in the country, especially in the Suez Canal Economic Zone. Egypt and Hungary signed several agreements to forge closer economic ties at the first meeting in four years of a joint economic committee in Budapest last month.

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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-

The UAE will host the Middle East Energy exhibition from Tuesday, March 7 to Thursday, March 9 in Dubai. The two-day event will gather regional stakeholders and experts including the International Renewable Energy Agency, Siemens Middle East, energy ministers and climate activists to discuss the energy transition. 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.

Oman will host Oman Sustainability Week from March 12 to March 16 in Muscat. The event aims to create discourse amongst leaders to drive change, and movement within businesses and communities towards adopting a sustainable lifestyle.

The UAE will host the Arab Aviation Summit from March 14 to March 16 in Ras al Khaimah. The event will bring together global stakeholders to address sustainability in the aviation industry among other topics.

Germany will host The Infrastructure Investor Global Summit from March 20 to March 24 in Berlin. The four-day event will gather industry leaders from the global infrastructure sector to map out a course for the industry to upscale its ESG-focused operations and investments. 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.

KSA’s Acwa Power will develop two solar plants with battery storage in Uzbekistan: Saudi renewable energy giant Acwa Power signed a USD 2.5 bn power purchase and investment agreement (PPA) with Uzbekistan's Energy Ministry to develop two solar stations and three storage facilities, Reuters reported on Saturday. The two solar stations will have a combined capacity of 1.4 GW, while the three storage facilities — two of which will be integrated with the new solar stations — are expected to have a capacity of 1.2 GW. No further financial details or a proposed timeline on the projects has been disclosed.

The details: The first 400 MW solar station located in the Tashkent province will be equipped with a storage facility with the same capacity. The second solar station will be built in the Samarkand region with a capacity of 1 GW, and will have 400 MW of battery storage. A third 400 MW battery storage facility will be built in Bukhara province. Uzbekistan's Energy Ministry will purchase the energy produced from the stations from Acwa power under the agreement.

Acwa is on an Uzbekistani roll: Acwa Power signed an agreement in January to build a green hydrogen plant and a green ammonia pilot project in Uzbekistan. The company also inked another PPA and investment agreements with the National Electric Grid of Uzbekistan worth USD 2.4 bn for a 1.5 GW wind energy farm in the country.

Eni is tapping into UAE’s renewables: Italian energy giant Eni signed a MoU with UAE’s state oil giant Abu Dhabi National Oil Co (Adnoc) for cooperation on future energy transition projects including green hydrogen and carbon capture, according to a statement released on Saturday. The agreement comes as Italy tries to forge closer ties with energy-rich countries in the region as it tries to wean itself off Russian gas imports in the wake of Russian invasion of Ukraine.

The details: Eni and Adnoc will explore prospective cooperation in several renewable energy areas, including in blue and green hydrogen, carbon capture and storage (CCS) to slash greenhouse gas and methane emissions and others in a bid to “support global energy security and a sustainable energy transition.” Both energy players will also look into cooperation for sustainable development and sustainability promotion in the industry.

Eni is exploring regional ventures: The Italian firm and Algeria’s state-owned oil firm Sonatrach signed two agreements in January aimed to boost decarbonization and energy security. Under the agreements, Eni and Sonatrach will identify prospects for greenhouse gas and methane emissions reduction, as well as initiatives in fields spanning energy efficiency, renewable energy, green hydrogen, and carbon capture and storage.

And Italy is strengthening ties with the Emirates ahead of COP28: Italy and the UAE announced a declaration of intent meant to boost strategic cooperation between the two countries in Dubai-hosted COP 28 later this year during a meeting between UAE President Sheikh Mohammed bin Zayed Al Nahyan and Italian Prime Minister Giorgia Meloni, Wam reported on Saturday. The strategic partnership would allow both countries to “expand prospects of cooperation in … sustainability, food and water security, advanced technologies and industries, climate change, renewable energy and clean technologies.”

The news also got ink from Bloomberg and Reuters.

Turkey preps for its local EV with a customs slap on China: Turkey will impose a 40% customs duty on Chinese electric vehicles in a bid to promote its first locally-produced electric vehicle, Bloomberg reported on Friday, citing a decree in Turkey’s Official Gazette (pdf). The government has supported the Automobile Joint Venture Group (Togg) with tax cuts, low borrowing costs, and a purchase pledge of 30k vehicles annually until the end of 2035, the business information service reports.

REFRESHER- Turkey revealed its first locally-produced electric car late last year as part of its efforts to position itself as a key regional automotive producer. Turkey’s Togg — a local joint venture set up in 2018 — plans to launch five models by the end of the decade, with a C-segment SUV primed for on release at the end of 3Q 2023.

Marubeni scouts green hydrogen plant with KSA’s PIF: Japanese trading and investment conglomerate Marubeni signed an agreement with Saudi Arabia’s sovereign wealth fund the Public Investment Fund (PIF) to jointly conduct a feasibility study for a green hydrogen production facility in KSA, according to a company statement released last week. The location, timeframe, and financials of the project have not been disclosed, but Marubeni noted that it would eye exporting some of the green hydrogen to international markets.

They’re already active in Oman: Marubeni is the largest developer in a consortium working on a USD 1 bn green ammonia SalalaH2 project in Oman. The plant — powered by clean energy projects totalling 4 GW — will have a generational capacity of 1k tons per day and is set to become commercially operational by 1Q 2028.

GCC and MENA have been on Marubeni’s radar for some time: The conglomerate signed an agreement with UAE’s Masdar and Egypt’s Elsewedy Electric to build wind farms generating 700 MW in Egypt at an investment ticket of USD 900 mn in 2018. In 2021, it partnered with the Abu Dhabi National Energy Company (Taqa) to develop a greenfield industrial steam, water and electric cogeneration plant and seawater desalination plant for Saudi Arabian energy giant Aramco. Earlier this year, it announced a partnership agreement with Siemens Energy, TotalEnergies, and the UAE’s Masdar that will see them collaborate on obtaining licenses certifying the feasibility of producing sustainable aviation fuel from methanol gas. More recently, Marubeni recently entered into an agreement with Saudi Arabia’s Ajlan & Bros for Trading and Qatar’s United District Energy International to set up a district cooling joint venture in KSA.

Oman’s Power and Water Procurement Company (OPWP) has received approval to award the Manah 1 and 2 solar energy projects to foreign investors, Oman Daily reported last week. The two projects will contribute a total of 1 GW to the national grid, each yielding 500 MW. The total cost of the two projects will amount to over OMR 300 mn (c. USD 780 mn) and will be the largest in the sultanate.

The projects will break ground this year: Construction of the projects will begin in 3Q 2023 and commercial operations will be completed by the middle of 2025 after the Authority for Public Services granted its approval to OPWP, according to the news outlet.

OPWP is ramping up renewables projects in the sultanate: OPWP launched three wind IPPs across Oman last month. The Duqm wind project and Jaalan Bani Bu Wind will come online in 2Q 2026 followed by the Harweel Wind project in 4Q 2026 and will yield between 100 to 200 MW each.

ALSO- Oman has nickel mining in the pipeline: Oman’s Energy and Minerals Ministry inked an agreement with British company Knights Bay to obtain concession rights to extract nickel ore in mining area No. 21 located in the North Al-Sharqiyah Governorate, the National reported on Thursday. The initial investment in the exploration and evaluation phase is between USD 25 and 30 mn over the course of the first three years, according to a tweet by Oman News Agency.

Saudi Arabia’s Acwa Power reported SAR 1.5 mn in net income in 2022, rising 103% y-o-y, according to the company’s earnings release. The uptick in net income came on the back of “higher operating income before impairment and other expenses,” along with lower impairment losses compared to 2021 and revenues generated under Acwa’s settlement of “long-term financing and funding facilities and divestment of a partial stake in the company’s Sirdarya project in Uzbekistan,” the company notes.

Dividend payouts: Shareholders in Acwa Power’s parent company will receive dividends of SAR 2.11 per share.

What they said: “Our first full year as a public company involved many operational and financial developments — in addition to expanding in existing markets, we actively engaged in the

debt capital markets and effectively recycled our capital in line with our long-term

strategy,” CFO Abdulhameed AlMuhaidi noted in the statement, adding that Acwa Power raised SAR1.8 bn in February in sukuk that was 2.24x oversubscribed.

Algeria launches tender for 15 solar plants: Algeria’s Sonelgaz Renewable Energies — a subsidiary of state-owned Sonelgaz — has launched a tender for the construction of 15 solar plants with a total capacity of 2 GW, according to a company statement released last week. The company says the submission of tenders and the opening of bids are scheduled for 29 May for the projects that will produce from 80 to 220 MW each.

KSA renewables projects set to receive government incentives under Shareek: Neom’s green hydrogen project and Ma’aden’s Wa’ad Al Shamal Phosphate 3 project are among 12 private-sector projects selected for government incentives and support under the Shareek program, according to an official statement released last week. The program helps local companies that fall within the qualification criteria accelerate the pace of implementing their projects, and explore new investment opportunities to increase the volume of investments. The combined value for the 12 projects approved is USD 51 bn, with Neom and Ma’aden’s projects representing USD 8.5 bn and USD 278 mn respectively.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Oman’s Transport Ministry and a consortium of companies have inked an agreement to extend feasibility studies for tidal power at the Masirah sea bridge, with the results to be presented at the end of the year to guide the investment decision. UK-based consultancy Translucidus partnered with Norwegian wave-power company Havkraft last week to establish Oman’s first wave energy power generation facilities. (WAF Oman)
• The Executive Council of Dubai approved the Green Procurement Policy, an initiative aimed at broadening the use of sustainable materials in the local supply chain, and developing environmental standards for procuring green products. The policy will focus on four categories in its first phase: construction materials, information technology devices, lighting materials, and the waste management sector. (Wam)
• Emirates Water and Electricity Company met total power demand for Abu Dhabi in renewables by 80% for the first time in February. (Wam)

China says coal is here to stay: Top coal consumer China will maintain dependence on coal despite Beijing expanding in the clean energy industry, Chinese Prime Minister Li Keqiang said at the National People’s Congress yesterday, according to Bloomberg. China mines and burns half the world’s coal, with the premier touting the benefits of the fossil fuel in keeping energy supplies and prices at home in check despite rising global inflation. Despite the support for coal, the country is still committed to clean energy generation, with authorities saying mega renewable projects, electricity storage and power grid upgrades will remain a priority this year. China aims to peak emissions by 2030 and achieve net zero by 2060.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• French President Emmanuel Macron pledged EUR 50 mn to support countries working on protecting their forests and biodiversity at the One Forest Summit in Gabon on Thursday. The USD 53 mn is part of a joint EUR 100 mn commitment to launch a new global program that rewards countries protecting and restoring their forests. (Reuters)
• The US will provide some USD 1.2 bn in aid to revive battered nuclear power plants under the Biden administration’s commitment to boosting renewable energy generation. (Reuters)
• The US will allocate USD 6 bn to bankroll 77 climate-focused projects globally and 34 marine conservation projects. USD 5 bn would be allocated to finance climate-focused projects and the remaining USD 1 bn will be channeled toward financing marine conservation projects. (Statement)

Could space seeds be the answer? Sorghum and cress seeds are being exposed to intense solar radiation by the International Atomic Energy Agency (IAEA) under efforts to boost their resistance to feed people on an increasingly warming planet, Bloomberg reports. Exposing the seeds to cosmic radiation would allow crops to endure hotter weather, increasingly barren land, a spread of pests and rising sea levels.

Why is this important? Most of astrobotany has focused on examining how plants can be grown to provide food for astronauts for possible space colonies, but this new experiment is designed to “help people on Earth adapt to climate change,” IAEA’s head of genetics and plant breeding Shoba Sivasankar told the business information service. Global yields continue to be hit by the adverse impacts of climate change, with rising temperatures and weather disturbances bringing food productivity down by nearly 13% since 1961, according to latest UN estimates.