Tuesday, 21 March 2023

Infinity Power acquires wind power platform Lekela

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, friends. The pre-Ramadan deluge of news doesn’t appear to be slowing down, giving us regional updates across the board.

THE BIG CLIMATE STORY- Infinity Power has completed its acquisition of Africa-based wind power platform Lekela Power, making Infinity Power the largest renewable energy company in Africa. We have all the details on this story and much more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- UN releases “survival guide for humanity” as the hourglass to curb warming to 1.5°C runs out of sand: A new UN-backed report released by the International Panel on Climate Change yesterday projects the world will breach the Paris-agreed 1.5°C warming limit in the next decade unless current emission levels are halved by the mid-2030s. The world is on track to warm by 3.2°C per year at current emission generation levels by the end of the century, the report finds, noting that meeting already pledged climate targets would still see warming levels increase by 2.2°C by 2100. UN Secretary General Antonio Guterres urged developed countries to bring forward their carbon neutrality targets by a decade to 2040 following the study’s findings.

Carbon levels are at a 2 mn-year high: The recorded rise in temperatures over the past 50 years is at a 2-millennium peak, the UN chief said in a recorded address yesterday. “Concentrations of carbon dioxide are at their highest in at least 2 mn years. The climate time-bomb is ticking,” Guterres warned.

The story is getting widespread coverage in the international press: Reuters | CNN | Bloomberg | BBC | Washington Post | New York Times | France 24 | Wall Street Journal | Financial Times | AP News.


OVER IN COP LAND- COP28 President-Designate Sultan Al Jaber called for speeding up climate mitigation, adaptation, and finance during his opening remarks at the two-day Copenhagen Climate Ministerial yesterday, Wam reports. Al Jaber urged countries to “scale up all available zero-carbon energy sources,” calling on the world’s governments to adopt policies that incentivize a faster rollout of battery storage, carbon capture, and hydrogen technologies. Al Jaber also pointed to the framework for the Global Goal on Adaptation (part of the Paris Agreements), expressing the urgency to double adaptation finance while adopting policies that can effectively help countries adapt to increasing climate disasters. With regards to finance, Al Jaber dialed in on the role of international financial institutions and multilateral development banks, and their capacity to “unlock much more concessional capital, lower risk, and attract more private finance.” The yet-to-materialize loss and damage fund was also mentioned, along with the need to move forward with its implementation. The UAE is co-hosting the ministerial — attended by more than 40 government ministers from around the world — with Egypt and Denmark.


WATCH THIS SPACE- VW’s answer to Tesla: A new USD 25K Volkswagen EV model is expected to hit European markets in 2025, Bloomberg reported. The ID. 2all’s relatively affordable price — despite having expensive batteries — is expected to compete with Tesla’s vehicles and boost sales for Europe’s largest automaker. The announcement comes days after VW revealed it will build its first non-European battery factory in Canada in a bid to localize its EV production chain in North America. The car will sport a range of 450 km off a fully charged battery and will borrow design elements from the Polo, Golf, and Beetle models.

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CIRCLE YOUR CALENDAR-

Italy will host the energy transition expo K.EY from tomorrow until Friday in Rimini. The event will gather experts in the fields of science, technology, and business to host energy-related discussions on technologies and services that direct a shift towards a carbon-neutral economy.

The US will host the UN Water Conference from tomorrow until Friday in New York. The conference is a midterm review of the International Decade for Action on Water for Sustainable Development launched in 2018.

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.

M&A WATCH

Infinity Power acquires wind power platform Lekela as part of expansion plans

Infinity Power is now Africa’s largest renewables player: Infinity Power — a joint venture between our friends at Infinity and UAE renewables player Masdar — has closed its acquisition of Africa-focused wind power platform Lekela Power, according to a press release (pdf). The transaction gave Lekela an enterprise value of USD 1.5 bn, the parent company of one of the selling shareholders said in a statement yesterday.

What it bought: Infinity Power now has a combined operational portfolio of 1.3 GW with a pipeline of 13.8 GW, making it the largest renewable energy company in Africa. Lekela currently has 1 GW of wind projects in Egypt, Senegal and South Africa in its portfolio and has another 1.8 GW in the pipeline.

Eight months in the making: Infinity signed an agreement last July to acquire 100% of the company from its two shareholders, private-equity firm Actis and Irish renewables developer Mainstream Renewable Power.

Where the money came from: The transaction was financed through equity investment from Infinity Power’s shareholders and debt from Absa Corporate and Investment Banking (Absa CIB) and the Mauritanian Commercial Bank, according to the press release. The Africa Finance Corporation and European Bank for Reconstruction and Development (EBRD) are key shareholders in Infinity, the latter of which has invested more than USD 100 mn since 2020.

Lekela wants to quadruple its energy production capacity: The company plans to invest USD 6 bn to increase its capacity to 4 GW over the next four years. A third of this will go to Egyptian projects, a third to South Africa and the remainder to other African markets.

Infinity Power has been active on green energy: Only this month, Infinity Power and Germany’s Conjuncta inked a MoU with Mauritania to build a massive green hydrogen plant in the West African country. The company is also part of a consortium of companies that includes Hassan Allam Utilities and the UAE’s Masdar building a 10 GW onshore wind farm in Egypt that will begin construction in 2024. The wind farm — which will cost at least USD 10-12 bn to build — will be one of the largest in the world with the capacity to produce nearly 48k GWh of clean energy a year.

Advisors: Cantor Fitzgerald, Absa CIB, Norton Rose Fulbright, Al Kamel Law Firm, Ernst & Young and AFRY advised Infinity Power on the transaction. Absa CIB and MCB were the mandated lead arrangers on the acquisition financing facilities. Citi and Clifford Chance provided advice to Actis and Mainstream.

DISTRICT COOLING

Empower will provide district cooling services to Dubai’s Sobha Hartland project

Empower set to cool Sobha Hartland luxury real estate development: Emirates Central Cooling Systems (Empower) signed an agreement with real estate developer Sobha Realty to provide district cooling services for eight of Sobha Harland’s buildings in Dubai, it said in a disclosure (pdf) to the Dubai stock exchange. The firm will extend its distribution network to supply 17k refrigeration tons (RT) of cooling capacity from its nearby Meydan station.

The details: Empower plans to begin delivering its cooling services for two of the eight buildings this year, the statement notes. No details were given about the investment cost, or the expected operation date for the remaining buildings.

About the Meydan plant: The Meydan district cooling plant is currently operating at a capacity of 45k RT, channeling cooling services to Meydan City, according to the statement. In August 2021, Empower signed an agreement with Meydan City Corporation to acquire the plant for over USD 27 mn, and invest USD 435 mn for the construction of four new district cooling plants that provide 382k RT to 750 existing and upcoming buildings in the new city, the statement notes.

This is the second major agreement for Empower this year: Last month Empower invested USD 122 mn to provide 63k RT of cooling capacity to the Dubai Maritime City project, its first signed project after the company IPO’ed on the Dubai Financial Market in November.

The district cooling market is on the up and up: The global district cooling market was expected to rake in USD 47.64 bn by 2022 due to surging demand for DHS systems in the Middle East. The value of the MENA market is expected to reach USD 15 bn by 2027.

WASTE MANAGEMENT

Egypt’s SCZone partners with Greece’s V Group on waste management facility

Egypt and Greece’s V Group will establish a waste management plant: Egypt’s Suez Canal Economic Zone (SCZone) and Greek waste management company Antipollution — a subsidiary of marine services company V Group — will form a joint stock company named Antipollution Egypt to establish of a waste treatment plant in Egypt’s SCZone, according to a statement.

The details: The waste treatment facility will process fluid and soluble waste collected from vessels transiting through the Suez Canal to be repurposed as part of Egypt’s efforts to boost its blue economy, the statement says.

And there’s plenty more renewables heading to the SCZone: The Sovereign Fund of Egypt (SFE) signed an MoU with Australia’s Fortescue to begin conducting feasibility studies on its planned USD 10 bn 9.2 GW green hydrogen project back in August, announcing in December that its plant could become operational as early as 2027, and noting that it is currently in talks with the country’s Suez Canal Authority for land allocation. In total, Egypt signed nine framework agreements during COP27 worth c. USD 83 bn with a number of companies to construct several green hydrogen and ammonia facilities in the Suez Canal Economic Zone.

ELECTRIC VEHICLES

UAE’s Al Futtaim Group launches new EV-focused company

The UAE’s Al Futtaim Group launches new EV-focused company: UAE-based retail giant Al Futtaim Group has established an EV-focused company named Electric Mobility Company that combines an EV dealership, charging stations, and an after-sales hub for the country’s EV market, according to a company statement.

Al Futtaim already secured an EV supplier: The new company has partnered with Chinese automaker BYD as its first new energy vehicle partner, the company noted in a separate statement. BYD showcased 2 of its EVs — the Han and Atto 3 — during the Future Mobility Day event held in Dubai last week, where Al Futtaim unveiled the launch of the new EV dealership.

And signed an agreement for the supply of EV chargers with Siemens: Al Futtaim also signed an agreement with Siemens for the supply and deployment of its Charge2Moov EV charging stations, it said in a statement.

Not Al Futtaim’s first foray into the EV sector: Al Futtaim Automotive group, which is Volvo’s UAE representative, will introduce the Volvo EX90 — a 7-seater EV SUV — in the UAE as early as 2024. Al Futtaim expects the EV industry to grow at a CAGR rate of 30% over the next five years in the UAE, Zawya notes referencing a company release.

RENEWABLES

Project Update: Acwa Power’s renewables agreements in Uzbekistan are bigger than previously reported

More details on Saudi’s Acwa Power Uzbekistan renewables plans: Saudi renewables developer Acwa Power signed three power purchase agreements totaling USD 2.5 bn with the National Electric Grid of Uzbekistan and the country’s Investment, Industry, and Trade Ministry for 1.4 GW worth of solar projects and three battery energy storage (BESS) units totalling a capacity of 1.5 GWh, according to a company statement. The scope of the agreements is larger than previously reported, with the company disclosing on Tadawul that the contract agreement will last 25 years and the plants are expected to come online in 3Q 2025 and 3Q 2026 — although it is unclear which projects will launch in which year.

The Tashkent project: The 400 MW PV plant will have an accompanying 500 MWh BESS facility, according to the statement. The specific timeline and exact investment ticket of the project was not disclosed.

Two projects in Samarkand: The new solar plants will collectively produce 1 GW of electricity, and will have a battery storage capacity of 500 MWh from a single BESS facility, the statement notes. The specific timeline of each 500 MW PV plant, and the financials of the projects were not disclosed.

And another BESS facility in Bukhara: A separate BESS facility will have a storage capacity amounting to 500 MWh, and will include overhead transmission lines to distribute power onto the national grid, according to the statement.

Uzbekistan is ramping up renewables: Uzbekistan has a target to source 35% of its electricity demand from renewables by 2035, planning to establish wind energy plants totaling 10 GW, and solar energy farms that would generate 5 GW of clean power by the end of the decade to offset a total of 16 mn tons of CO2 per annum. The three new solar energy projects would offset some 1.6 mn tons of CO2 equivalent annually, the company statement notes.

And Acwa is on an Uzbekistani roll: The company has already poured in a total of USD 5 bn to fund the five projects it owns and operates in the country — including onshore wind energy plants, the statement notes. Acwa plans to invest a total of USD 10 bn in Uzbekistan’s renewables projects over the next five years, and signed an agreement in January to build a green hydrogen plant and a green ammonia pilot project in the country. 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.

ELECTRIC VEHICLES

Canada’s VPorts to establish eVTOL “vertiport” at UAE’s Ras Al Khaimah airport

Vports is setting up an eVTOL “vertiport” at Ras Al Khaimah Airport: Canadian air mobility infrastructure developer Vports signed an MoU with UAE’s Ras Al Khaimah (RAK) Airport to build and operate a micro-scale airport — known as “vertiports” — designed for electric vertical take-off and landing (eVTOL) aircrafts, according to a company statement (pdf). Information on the expected project timeline and financial details were not disclosed.

The details: The RAK vertiport will be established on a 10k sqm site designed to accommodate all types of eVTOLs, the statement notes. By 2030, VPorts plans to extend its vertiport network to all major industrial areas across the UAE including Dubai South, Jebel Ali, Abu Dhabi and Sharjah.

Vports is expanding its presence in the UAE: The company signed in December a 25-year lease agreement with the UAE’s General Civil Aviation Authority and the Mohammed bin Rashid Aerospace Hub to build a 37k square meter eVTOL flight testing site at an initial investment of USD 40 bn over the next three years. The center — which is expected to become operational in 2024 — is expected to generate some USD 7 bn in direct revenues over the lease’s lifecycle. Japan’s SkyDrive will be testing its eVTOLs at the site as part of its preparation for its aircraft launch set for 2025, the company revealed yesterday.

MOVES

UAE’s district cooling company Tabreed has appointed Ali Al Rumaihi (LinkedIn) as the manager of Tabreed Bahrain, according to a statement released this week. Al Rumaihi will be in charge of growing Tabreed Bahrain’s district cooling portfolio in addition to managing the company's existing clients including Bahrain World Trade Centre, Bahrain Financial Harbour, Reef Island, and The Avenues Mall. Prior to his position in Tabreed, Al Rumaihi worked in transactional real estate and utilities.

ALSO ON OUR RADAR

UAE’s Crown Electric Ships And Boats is planning to establish a Dubai-based manufacturing facility to produce all-electric boats and yachts, according to a company statement. The company has already secured an initial investment agreement worth USD 10 mn with Kuwait’s Badr Sultan group for the supply of a variety of zero-emissions ships, including cabin cruisers and larger electric catamarans. The electric vessels would be earmarked for the MENA market.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

  • Some 61% of UAE residents practice sustainable tourism and are prepared to pay higher fares for environmentally friendly travel, preceded only by Indians with 68%. (YouGov)

AROUND THE WORLD

Denmark is developing a 500 MW wind-to-hydrogen production facility in the North Sea, Reuters reports. The project will be the first of its kind in the country and is scheduled to come online in 2031. The project is a step towards fulfilling the Netherlands’ goal of producing 4 GW of hydrogen from renewable energy by 2030, the newswire adds.

ALSO- French renewables company Lhyfe and the UK’s Centrica will jointly develop offshore green hydrogen in the UK, according to a statement released this week. Under the agreement, Lhyfe will produce clean hydrogen and Centrica will provide gas storage solutions and infrastructure. The new project will contribute to the UK’s plan to produce 10 GW of low-carbon and green hydrogen to decarbonize heavy industries by 2030.

ON YOUR WAY OUT

Does algae biofuel still have a wing and a prayer? US algae fuel company Viridos secured USD 25 mn funding from Bill Gates-led Breakthrough Energies, United Airlines and Chevron to continue developing the low-carbon fuel, Bloomberg reports. The new funding will go toward the company's efforts to genetically modify algae to produce low-carbon fuel for heavy, long-distance transport.

What is algae biofuel? Grown in ponds, algae biofuel or algal oil is an algae-based alternative to liquid fossil fuels that promises to produce lower-emission fuel, freeing up arable land for food crops.

ExxonMobil’s bye bye: The oil giant invested USD 350 mn in Viridos over the course of 12 years, but made a quiet exit — which was not made public until last month — from algae biofuel development. Exxon told Bloomberg that it is redirecting its investments to hydrogen, carbon capture and biofuels.

The latest in a string of Big Oil withdrawals: With the exception of Chevron’s involvement in Viridos’ latest funding round, big oil companies have largely stepped away from funding the development of algae biofuel, according to The Guardian. In 2011, Shell exited from the sector and BP and Chevron reported disappointing or insignificant results from their projects.

Why is it a risky investment? Algae researchers told The Guardian that developing the technology requires bns of USD to reap significant results and risks becoming a redundant investment for anything besides jets and boats as ground transportation has increasingly become electrified. The technology still has high potential for airlines, Bloomberg reports, with United Airlines’ backing — which comes from the airline’s USD mn sustainable flight fund launched last month — intending to explore how algae biofuels can be used for sustainable aviation fuel (SAF).

CALENDAR

MARCH 2023

22-24 March (Wednesday-Friday): K.ey – The Energy Transition Expo, Rimini Expo Centre, Emilia-Romagna, Italy.

22-24 March (Wednesday-Friday): UN 2023 Water Conference, New York, NY, United States.

27-29 March (Monday-Wednesday): First Meeting of the Transitional Committee in Egypt focusing on Adaptation and Loss and Damage.

APRIL 2023

6 April (Thursday): Arabia CSR Awards 2022 Clinic (online).

18-19 April (Tuesday-Wednesday): International Conference on Green Energy and Environmental Technology (ICGEET), Dubai, UAE.

MAY 2023

1-4 May (Monday-Thursday): Arabian Travel Market, Dubai, UAE.

2-7 May (Tuesday-Sunday): Salon International de l’Agriculture au Maroc (SIAM), Meknes, Morocco.

4-6 May (Thursday-Saturday): International 100% Renewable Energy Conference (IRENEC), Istanbul, Turkey.

8-10 May (Monday-Wednesday): Global Green Future Fuel, Dubai, UAE.

9 May (Tuesday): World Hydrogen 2023 Summit & Exhibition, Rotterdam, Netherlands.

9-10 May (Tuesday-Wednesday): The Solar Show MENA, Cairo, Egypt.

16-18 May (Tuesday-Thursday): Seatrade Maritime Logistics Middle East, Dubai, UAE.

29-31 May (Monday-Wednesday): Electric Vehicle Innovation Summit, Abu Dhabi, UAE.

30 May-1 June (Tuesday-Thursday): Global Sustainable Development Congress, King Abdullah University of Science and Technology (KAUST), KSA.

JUNE 2023

1-3 June (Thursday-Saturday): Envirotec and Energie Expo, Tunis, Tunisia.

12-15 June (Monday-Thursday): Saudi Plastics & Petrochem, Riyadh, KSA.

13-14 June (Tuesday- Wednesday) The Arab Green Summit, Dubai, UAE.

13-14 June (Tuesday- Wednesday) Bloomberg New Economy Gateway Africa Conference, Marrakesh, Morocco.

JULY 2023

3-7 July (Monday-Friday): The 36th Conference of the International Association of Climatology, Bucharest, Romania.

AUGUST 2023

20 August-24 August (Sunday-Wednesday): World Water Week 2023, Stockholm, Sweden.

SEPTEMBER 2023

9-20 September (Saturday-Wednesday): 2023 Sustainable Development Goals Summit, New York, U.S..

11-13 September (Monday-Wednesday): Global Congress on Renewable and Non-Renewable Energy, Dubai, UAE.

Chariot Limited and Total Eren’s feasibility study on a 10 GW green hydrogen plant in Mauritania to be completed.

OCTOBER 2023

2-4 October (Monday-Wednesday): WETEX and Dubai Solar Show, Dubai, UAE.

4 October (Wednesday): Arabia CSR Gala Awarding Ceremony, UAE.

16-18 October (Monday-Wednesday): Climate Week, Rome, Italy.

31 October – 2 November (Tuesday-Thursday): World Hydropower Conference, Bali, Indonesia.

NOVEMBER 2023

9-10 November (Thursday-Friday): International Renewable Energy Agency Investment Forum, Uruguay.

30 November – 12 December: Conference of the Parties (COP 28), Dubai, UAE.

EVENTS WITH NO SET DATE

End-2022

KSA’s Neom wants to tender three concrete water reservoir projects to up its water storage capacity by 6 mn liters.

2023

Early 2023: Egypt’s KarmSolar to launch KarmCharge, the company’s EV charging venture.

1Q2023: Oman will award two blocks of land for green hydrogen projects in Duqm, Oman.

Mid-2023: Sale of Sembcorp Energy India Limited to consortium of Omani investors to close.

Phase C of the 900-MW of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai to be completed.

Saudi Basic Industries Corporation (Sabic) steam cracker furnace powered by renewable energy to come online.

4Q2023: Oman to award four blocks of land for green hydrogen projects in Thumrait, Oman.

2024

End-2024: Emirati Masdar’s 500 MW wind farm in Uzbekistan to begin commercial operations.

QatarEnergy’s industrial cities solar power project will start electricity production.

First 1.5 GW phase of Morocco’s Xlinks solar and wind energy project to be operational.

2025

Second 1.5 GW phase of Morocco’s Xlinks solar and wind energy project to be operational.

UAE to have over 1k EV charging stations installed.

2026

1Q 2026: QatarEnergy’s USD 1 bn blue ammonia plant to be completed.

End-2026: HSBC Bahrain to eliminate single-use PVC plastic cards.

Iraq’s Mass Group Holding wants to invest EUR 1 bn on its thermal plant Mintia in Romania to have 62% of run on renewable energy, while expanding its energy capacity to at least 1.29k MWh.

2027

MENA’s district cooling market is expected to reach USD 15 bn.

2030

UAE’s Abu Dhabi Commercial Bank (ADCB) wants to provide AED 35 bn in green financing.

UAE targets 14 GW in clean energy capacity.

Tunisia targets 30% of renewables in its energy mix.

Qatar wants to generate USD 17 bn from its circular economy, creating 9k-19k jobs.

Morocco’s Xlinks solar and wind energy project to generate 10.5 GW of energy.

2035

Qatar to capture up to 11 mn tons of CO2 annually.

2045

Qatar’s Public Works Authority’s (Ashghal) USD 1.5 bn sewage treatment facility to reach 600k cm/d capacity.

2060

Nigeria aims to achieve its net-zero emissions target.

Enterprise Climate is available without charge thanks to the generous support of HSBC (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; and Infinity Power (tax ID: 305-170-682), the leading generator and distributor of renewable energy in Africa and the Middle East. Enterprise Climate is delivered Mon-Thurs before 4 am UAE time. Were you forwarded this copy? Sign up for your own delivery at climate.enterprise.press. Contact us on climate@enterprisemea.com.