Masdar and Romania’s Hidroelectrica partner on wind + solar energy projects

Did you miss us? Enterprise Climate took a brief publication holiday last Thursday, which is why we were missing from your inbox, but we’re back with a packed issue this morning to make up for it.

THE BIG CLIMATE STORY- UAE’s Masdar signed a joint cooperation agreement with Romanian state-owned utilities firm Hidroelectrica to deploy 2 GW worth of offshore wind energy and floating solar energy projects, and Oman’s Power and Water Procurement Company has tapped Korea Western Power and EDF Renewables to co-develop the 500 MW Manah 1 solar plant. We have all the details on these stories and more in the news well, below.

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HAPPENING TODAY- Egypt is kicking off the first meeting of the COP27 Transitional Committee from today to Wednesday, 29 March in Luxor. The event will focus on adaptation and loss and damage. The Transitional Committee’s work will include presiding over COP27’s landmark loss and damage fund created to support climate-vulnerable countries, which will take into consideration the landscape of institutions responding to loss and damage.

SPEAKING OF COP- COP28 could see specific targets set for global renewable energy capacity generation and the fossil fuel phase out, Denmark's Climate Minister Dan Jørgensen said at the Copenhagen Climate Ministerial last week, according to Politico. The suggested target to meet the world's climate goals currently stands at 1 TW of annual growth, International Renewable Energy Agency Director Francesco La Camera said during the conference. Jørgensen called for more ambitious nationally determined contributions (NDCs) — climate pledges set by countries — to reduce national emissions, and highlighted the need to increase adaptation finance, speed up the implementation of the loss and damage fund, and the mobilization of climate finance, according to The National. On the first day of the conference COP28 President-Designate Sultan Al Jaber called for speeding up climate mitigation, adaptation, and finance.

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THE BIG CLIMATE STORY OUTSIDE THE REGION- Berliners voted in a referendum yesterday to make the German capital carbon neutral by 2030. The results could determine whether the German capital brings its net-zero targets forward by 15 years to 2030, a decade and a half earlier than the national target. Climate activists have already secured some 260k signatures in support of the proposal, but 25% of Berlin’s 2.4 mn eligible voters would have to vote in favor of the legally-binding referendum for the amendment to pass. Critics warn a binding target could strip the government of its ability to maneuver if the climate goal is not met, leading to disappointment.

The story got some coverage in the press over the weekend: AP News | Reuters | Washington Post | Deutsche Welle

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WATCH THIS SPACE #1- Tunisia plans to become carbon neutral by 2050: Tunisia’s Prime Minister Najla Boden Ramad unveiled the country's energy strategy for 2035, which sets a target to decarbonize the national economy by 2050, according to a cabinet statement. The strategy also includes the country’s green hydrogen production roadmap. Tunisia has unconditionally committed to pushing down its emissions from 2010 levels by 27% by 2030, and has set a conditional target to slash its emissions by 45% compared to 2010 by the end of the decade if it receives additional international support, according to the UNDP.

CLIMATE DIPLOMACY- The EU wants to invest in Tunisia in a number of areas including renewables and wastewater management, Tunis Africa Press Agency reported last week. The EU is prepared to support the north African country through its negotiations with the IMF to help restore a promising investment climate, Director General for the EU’s neighborhood policy and enlargement negotiations Gert Jan Koopman said during a meeting with Tunisia’s Economy and Planning Minister Samir Said. Investments in Tunisia can take several forms including Foreign Direct investments (FDI) and Private-Public Partnerships (PPPs) and private capital has the potential to boost bilateral collaboration.

WATCH THIS SPACE #2- US pushes for first steps in World Bank reform to prioritize climate finance by April: Germany’s acting governor to the World Bank Svenja Schulze and US Treasury Secretary Janet Yellen were in talks last week hoping to overhaul the World Bank’s financing structure ahead of COP28 to incorporate climate finance, pandemic control, and poverty reduction as top priorities, the Financial Times reports. Yellen and German allies are keen to see a solid “schedule for reform” of the World Bank as early as April, as the lender faces pressure for failing to address climate change. Earlier this month, the lender updated its regulations to align new financing with targets of the Paris agreement, but concern over the bank’s funding of fossil fuel drilling projects remains a sticking point, the news outlet notes.

REMEMBER- The bank wants to increase climate-focused lending capacity: The World Bank wants to remodel its funding programs to expand its lending capacity for climate change through planned capital increases and new lending tools. The shift signals a radical change from the bank’s model of working from project and country-specific loans. WB management will broach the topic with shareholders in April, discussing specific proposals to change its mission, operating model, and financial capacity as it looks to ready a document for approval by the joint World Bank and International Monetary Fund Development Committee by October.

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WATCH THIS SPACE #3- Some aircrafts may receive a green badge under new EU rules: Certain aircrafts may be eligible to receive the EU’s green label if they meet certain criteria including zero emissions or meeting outlined CO2 limits, Bloomberg reported citing a draft report by the EU Commission. According to the document, passenger aircrafts would need to use a minimum 10% share of sustainable aviation fuels starting 2030, and will be required to increase by 2% annually in order to qualify for the green label. Bloomberg expects that the addition of the aviation industry onto the list of economic activities that contribute toward the bloc’s goal of climate neutrality — called EU Taxonomy — will spark controversy amongst climate activists who have previously rejected the inclusion of heavily polluting industries such as gas and nuclear power. According to the Commission, adding such activities contributes to incentivising the private sector to speed up its green transition.

WATCH THIS SPACE #4- Is the Cypriot electricity grid ready for the influx of renewable power coming its way? Cyprus lacks the power storage capacity to accommodate the inflow of renewable power it will soon receive (partially from Egypt) through the USD 4 bn 2 GW EuroAfrica Interconnector and the 2 GW EuroAsia Interconnector with Greece as network overloads causing power outages in the country earlier this month, according to the Cyprus News Agency. The Transmission System Operator Cyprus (TSOC) — one of the country’s utility providers — noted to parliament that when energy generation peaks to 500 MW, it is forced to turn off 85 MW from its solar energy plants for lack of adequate power storage capacity. Power generation cuts are expected to push down energy production from the country’s PV units by 6-8% in 2023, TSOC executive director Stavros Stavrinos said, according to the news agency.

WATCH THIS SPACE #5- Saudi Aramco markets its energy transition strategy to Chinese investors at China Development Forum: Saudi Aramco CEO Amin Nasser highlighted how the company’s low-carbon strategies — including reducing increased carbon capture storage and increasing low carbon energy and renewables to their portfolio — can help strengthen China’s long-term energy security and zero-emission goals, according to a company statement. Nasser also emphasized that China’s venture capital space “offers significant investment opportunities to stimulate the technology development and innovation required,” pointing to a letter of intent signed this month between China’s Geely and France’s Renault to establish a JV specialized in developing more efficient gasoline engines and hybrid automotive systems.

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CIRCLE YOUR CALENDAR-

The UAE is hosting the International Conference on Green Energy and Environmental Technology (ICGEET) on 18 and 19 April in Dubai. The event will bring together stakeholders from academia, the healthcare industry, and the private sector to discuss energy conservation among other topics.

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.

Masdar partners with Hidroelectrica on solar and wind energy projects: UAE renewables giant Masdar signed a joint cooperation agreement with Romanian state-owned utilities firm Hidroelectrica to deploy offshore wind energy and floating solar energy projects totalling 2 GW in the country, according to a company tweet on Friday. The agreement was signed by UAE Vice President and Prime Minister Mohammed bin Rashid Al Maktoum and Romania’s President Klaus Iohannis during a meeting last week that saw both sides discuss bilateral cooperation in the renewable energy sector.

Not the first regional interest in Romania’s renewables: Emirates Nuclear Energy Corporation (ENEC) signed an MoU last week with Romania’s Nuclearelectrica to collaborate on nuclear energy program development in the two countries, as well as in Central and Eastern Europe. The collaboration aims to deploy nuclear energy for decarbonizing the power sector and heavy industry, as well as in the production of clean hydrogen. Back in August, Iraqi infrastructure and electricity developer Mass Group Holding acquired a 1.2 GW thermal power plant in the country.

Oman’s OPWP picks developer for Manah 1 solar plant: Oman’s Power and Water Procurement Company (OPWP) has tapped Korea Western Power (KOWEPO) and French EDF Renewables to co-develop the 500 MW Manah 1 solar plant in Oman under a build-own-operate model, according to a company statement released last week.

The details: The solar plant will cost USD 458 mn, according to the statement, and construction will begin in 3Q 2023 with commercial operations commencing by March 2025. OPWP will purchase the electricity generated under a 20-year power purchase agreement, the statement notes.

Background: Manah 1 is one half of a larger project by OPWP to build a solar plant with a combined capacity of 1 GW. The combined cost of Manah 1 and Manah 2 will amount to over OMR 300 mn (c. USD 780 mn) and will be the largest in the sultanate. A JV made up of Singapore’s Sembcorp Utilities and China’s Jinko Power were selected to develop the Manah 2 solar plant earlier this month.

South Korea has been on a renewables hunt in the region: Earlier this month, USD 1 bn was earmarked for financing green hydrogen and renewables projects in MENA by South Korea’s official export credit agency, the Export-Import Bank of Korea. Kepco signed an agreement with Saudi Arabia’s Public Investment Fund in November worth some USD 6.5 bn to build a hydrogen and ammonia plant. KSA’s Saudi Exim also signed in December an MoU to export green hydrogen and ammonia to the Korea Trade Ins. Corporation (K-Sure). Saudi Aramco and Sabic Agri-Nutrients shipped the world’s first commercial load containing 25k tons of blue ammonia to South Korea which arrived to Korean shores late in December.

The World Bank will lend Egypt USD 7 bn over the next five years to support climate action, among other objectives, according to a statement released last week. The Country Partnership Agreement, approved by the bank’s executive board last week, will see the International Bank for Reconstruction and Development (IBRD) extend USD 1 bn a year through to 2027 and the International Finance Corporation (IFC) lend USD 2 bn for the same duration.

Targets: The agreement looks to achieve its goals by upscaling the country’s climate mitigation and adaptation capacity, creating more and better private-sector jobs, and improving the provision of health and education services.

It’s been two years since Egypt’s last Country Partnership Framework (CPF) ended: The country’s previous CPF initially covered 2015-2019, and was extended for an additional two years to end in 2021. It included a total of USD 8 bn of WB financing — of which USD 6 bn was allocated from the IBRD and, again, USD 2 bn from IFC.

More WB funding coming Egypt’s way: Egypt is set to receive a USD 9.13 mn grant from the World Bank to tackle the management of e-waste and healthcare waste disposal systems. The grant — disbursed by the lender’s Global Environment Facility — will be used to improve waste management in healthcare and e-waste in a bid to reduce the release of Unintentional Persistent Organic Pollutants.

Egypt’s CIB entered into a partnership agreement with the International Finance Corporation (IFC) to jointly develop a climate risk management framework for the bank, according to a statement released last week.

The details: The IFC advisory project will see both sides work on developing a screening and testing mechanism against climate risk to ensure the Egypt-based bank discloses any climate-related financial risks in its portfolio, ensuring CIB’s regulatory compliance on climate action, the statement notes.

Why is this important? “Climate-related financial risks are increasingly becoming more relevant for financial institutions … IFC's partnership with CIB will further enhance the Bank's process of integrating the climate-related risks into the existing risk management framework, as well as to support aligning with the evolving international standards,” CIB's Chief Risk Officer Talha Karim notes in the statement.

IFC’s been backing CIB’s green moves: IFC subscribed to the full issuance of CIB’s first USD 100 mn noncallable, five-year, fixed-rate corporate green bond back in 2021. CIB also developed the first credit line dedicated to certified green building in North Africa with support from the IFC, the statement notes.

Egypt gets support for desalination projects: The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation will work with the Sovereign Fund of Egypt (SFE) to increase private-sector participation in four desalination plants powered by renewable energy, according to an EBRD statement and an Egyptian cabinet statement released last week. The two multilateral lenders will provide advice on how to structure and implement four public-private partnership desalination projects, and details regarding the type of renewable energy powering the plants were not disclosed.

Desalination is key for Egypt’s future water security: The plants are part of the government’s plan to add 8.8 mn cubic meters per day of desalination capacity by 2050. SFE’s CEO Ayman Soliman said in December that the fund will sign contracts for 21 desalination plants in 2023. As many as 28 companies were said to have bid for the contracts.

UN’s Water Action Agenda springs into effect: The United Nations’ first water conference since almost half a century closed over the weekend with the adoption of the Water Action Agenda under efforts to safeguard “humanity’s most precious global common good,” according to a statement released on Friday. The non-binding agenda adopted during the 2023 UN Water Conference outlines several commitments ranging from better food choices to having water reappraised as a leading economic driver.

What’s on the table? The 700 commitments would be put into action through having new and alternative food systems to slash the unfeasible use of water in agriculture and launching a new global information system to help achieve the Sustainable Development Goals (SDGs) and others. Those include appointing a Special Envoy for Water ahead of the SDG summit next September. The USD 300 bn in pledges made to back the agenda could help unlock at least USD 1 tn of socioeconomic and ecosystem gains, according to UN officials.

Who’s on board? The US announced it will provide up to USD 49 bn in investments under its commitment to the agenda “to ensure that climate-resilient water and sanitation remains a priority worldwide,” according to its statement during the conference. Under the plan, USAID will work with the US Congress to commit USD 700 mn until 2026 to for water solutions in 22 nations across Asia, Latin America, the Caribbean and sub-Saharan Africa. The UK will also provide GBP 18.5 mn for water in South Asia and sub-Saharan Africa, according to a statement by the British government. Separately, Saudi Arabia said it has allocated USD 80 bn for water projects in the coming years under efforts to provide safe drinking water for all, SPA reported citing statements by the Deputy Minister for Water at the Environment, Water and Agriculture Abdulaziz Al Shaibani.

The region wants more action: UAE’s Climate Change and Environment Minister Mariam bin Mohammed Almheiri urged more investments poured into water sustainability during the conference. She said water challenges once limited to desert countries or small developing nations were now seen. “Yet investment in the issue has never seen higher returns,” Amheiri said during an interactive dialogue at the conference. Egypt’s Irrigation and Water Resources Minister Hani Suwilem also took part in the conference, stressing on the necessity of not dealing with water as an economic good, according to a statement by the ministry. He spoke of Egypt being among states facing combined challenges resulting from climate change and water scarcity, highlighting a water deficit of up to 55%. Suwilem stressed the importance of an effective transboundary water cooperation for Egypt as he shed light on “unilateral moves” over the disputed Grand Ethiopian Renaissance Dam (GERD).

And there are bns at risk globally: Around 2 bn people — roughly 26% of the world’s population — do not have access to safe drinking water, a landmark report released by the UN ahead of the conference showed. Some 3.6 bn people lack safely managed sanitation according to the report titled UN World Water Development Report 2023 (pdf). Ensuring clean water under SDG goals for 2030 would cost between USD 600 bn and USD 1 tn annually, according to statements by the report’s editor-in-chief Richard Connor.

KSA inaugurated the kingdom’s first biofuel production plant in the country’s eastern province of Al Jubail, according to Al Riyadh and a company statement released last week. The production facility — operated by KSA’s The Biofuel Company — is wholly financed by Saudi investors, with financial backing from Aramco’s VC outfit Waed Ventures.

The details: The plant — which became operational in October — converts reclaimed cooking and palm oil into carbon-neutral biodiesel and has a yearly production capacity totalling some 4.2 mn liters of B100 biodiesel, the news outlet notes. The refinery’s green fuel would be earmarked for the local market, and any excess biodiesel output would be exported to the European market.

Where are they getting the oil from? KSA-based restaurants and corporations including Aramco would supply the plant with used oils, the news outlet quotes Al Hussein as saying, adding that the plant would capitalize on KSA’s ban on the export of waste materials to source the second-hand oil it needs.

Plans for another biofuel plant in Jeddah: KSA is looking to launch another biodiesel production facility in Jeddah to up its national production capacity in line with its 2060 carbon neutrality target, Al Hussein said, noting that the country wastes some 15k liters of oils on a monthly basis that can be converted into biofuels.

EU cracks down on e-waste: EU consumers may be able to request repairs for their worn-out home appliances between five to 10 years after purchase in a bid to crack down on consumer goods being trashed and replaced, Reuters reported. The new rule being discussed by the EU's executive branch would apply to fridges, vacuum cleaners, televisions, washing machines and other consumer goods deemed “repairable” under EU law. The inclusion of smartphones and tablets is also being considered. Companies could have the option to charge consumers for their repair once the guarantee expires, according to the newswire.

Is direct air capture too expensive? Capturing carbon from the air proved to be too energy intensive for it to play a significant role in reaching global climate goals, a future energy scenario modeled by Shell revealed, according to Bloomberg. Shell’s scenario illustrated that if the world limits its emissions in line with the Paris agreement, the demand for direct air capture would rise to 66 exajoules by the end of the century— more than the amount of energy needed to heat the world’s homes in the same period.

The Abu Dhabi Developmental Holding Company (ADQ) launched a vertical farming project in collaboration with Italy’s Zero Farms in ADQ’s AgTech Park, according to a statement released last week. The project’s pilot phase spans a surface area of 1k sqm and will yield 10 tons of produce per annum when it comes online by the end of 3Q 2023. An expansion reaching 40k sqm is expected to produce more than 40 kilo tons of crops annually — roughly 6% of the country’s consumption.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Norway’s DNV Group signed an MoU with Egyptian contractor Petrojet to support green hydrogen production in Egypt. DNV will provide technical expertise and assessments for the viability of potential projects including technical assistance in renewable power generation, energy storage projects, and infrastructure for hydrogen transportation. (Statement)
• Two Saudi astronauts will conduct cloud seeding experiments in microgravity during a 10-day mission to the International Space Station commencing on 12 May. (The National News)

Jera acquires Belgium's largest offshore wind energy platform: Japan’s largest power generation company, Jera, has fully acquired Belgian renewables company Virya Energy’s wind energy platform Parkwind for EUR 1.55 bn, according to a company statement. The transaction will see Jera add 771 MW of clean energy to its portfolio from Parkwind’s Belgium-based plants, 257 MW from the Arcardis Ost offshore farm in Germany, and 4.5 GW of renewable energy from Parkwind’s pipeline of global projects, the statement notes. The transaction is expected to close later in 2023, with both sides exploring the possibility of Virya re-investing in a minority stake of Parkwind’s Belgian wind energy assets, and potential co-development opportunities in the country.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Italian oil giant Eni is investing EUR 5 bn by 2030 to add 4 GW to its renewable energy capacity, and have 40% of the company’s power mix generated from green fuels. Solar plants will account for half of the 4 GW, while wind and green hydrogen will account for 1 GW each. Eni currently has a renewable capacity of 2 GW. (Reuters)
• Japan’s third largest oil producer Cosmo Energy Group will channel USD 1.1 bn to green energy investments by 2026. (Reuters)
• The US is allocating USD 200 mn to boost the country’s hydroelectric power and ocean energy generation capacity. (Statement)
• Transmission infrastructure for transporting green hydrogen between western Denmark and northern Germany will be ready by 2028, according to an agreement signed between the two countries on Friday. (Reuters)