Acwa Power receives USD 40 mn in financing from OPEC Fund for Uzbekistani wind farms

Good morning, wonderful people. We have a light and springy issue for you today with a couple of green tech reads to round things out.

THE BIG CLIMATE STORY- The OPEC Fund for International Development approved two separate loans worth USD 20 mn each to finance two of Saudi renewables company Acwa Power’s wind farms in Uzbekistan. We have the details on this story and more in the news well, below.

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HAPPENING TODAY- A Cypriot delegation is arriving in Cairo today, and renewables are on the agenda: Cypriot President Nikos Christodoulides is arriving in Cairo today with his Energy and Commerce Minister George Papanastasiou to meet with Egyptian President Abdel Fattah El Sisi and a number of cabinet ministers, the Financial Mirror reports. Among the items on the agenda are energy projects, likely including renewables given Cyprus’ plan to import renewable energy from Egypt through the USD 4 bn, 2 GW EuroAfrica Interconnector and the 3 GW Greece-Egypt Interconnector (GREGY).

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THE BIG CLIMATE STORY OUTSIDE THE REGION- The US will shell out USD 450 mn to deploy renewables projects at coal mines: The Biden administration issued guidance yesterday for clean energy developers looking to capitalize on the Inflation Reduction Act’s tax breaks and the incentives of the USD 1 tn 2021 infrastructure law to build renewables plants. The administration will make available USD 450 mn for renewables projects that will be located at current or decommissioned coal mining sites across the country, according to the statement. Up to five clean energy projects will be eligible to receive a portion of the financing package the White House has earmarked for the carbon-neutral energy projects, with at least two of the five projects set aside for solar plants. The new regulation seeks to spur investments in energy communities — especially coal communities — that have been hard-hit by prolonged declines. Interested developers will have until the end of August to submit applications for planned projects, with grant decisions set to be announced early on in 2024.

The story got some coverage in the press yesterday: Reuters | Associated Press | The Washington Post

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WATCH THIS SPACE #1- The Saudis want in on Egypt’s clean energy projects: Three Saudi companies have reportedly submitted requests to invest up to USD 1.5 bn in Egypt’s renewables, green hydrogen, and ammonia sectors, Al Borsa reports, citing sources it says have knowledge of the plans. One of the three unnamed companies was in talks with the country’s Electricity Ministry for the development of a 500 MW onshore wind farm, for which the firm says it has secured initial approval for funding from an undisclosed European bank. The two remaining Saudi developers are each eyeing separate green fuel production plants in the country, and they both have agreements in place with global renewables firms for their proposed projects.

WATCH THIS SPACE #2- Egyptian carbon credit platform coming soon? Egypt’s International Cooperation Ministry is working closely with the EGX and the European Bank for Reconstruction and Development (EBRD) to launch the country’s much-anticipated carbon credit platform, Al Borsa quotes International Cooperation Minister Rania Al Mashat as saying. The launch of the platform is part of efforts to implement pledges made during COP27, Al Mashat said, without providing further details on the platform or an expected date of launch.

REMEMBER- We’re still awaiting the EGX’s launch of Africa’s first voluntary carbon market (VCM), which officials said will launch in mid-2023. As of late November, the EGX was close to finalizing contracts with a Canadian fintech to supply the technology for the carbon credit platform.

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WATCH THIS SPACE #3- Xlinks’ Morocco-UK Power Project could be getting a boost from the region: Abu Dhabi National Energy Company (Taqa) is in advanced talks to pour investments into UK-based Xlinks’ ambitious Morocco-UK power project, Sky News reports. Taqa is in negotiations to acquire a “significant” stake in the GBP 18 bn project, which involves the construction of a 3.8k km undersea cable between Morocco and the UK. British renewables investor Octopus Energy is also reportedly financially backing the project. Once completed, the “first of a kind” project is expected to supply 8% of the UK's electricity needs.

“Without commitment,” the UK continues to mull the viability of the 10.5 GW project, according to the Powering Up Britain – Energy Security policy paper released last week. Progress on the project — which would see 3.6 GW of clean energy generated in Morocco transported to the UK — has been “frustratingly slow,” Xlinks Executive Chairman David Lewis said last year. Xlinks could decide to divert the power produced elsewhere if the UK does not commit to financing the scheme.

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WORTH READING- Al Jaber a powerhouse for climate progress or a patron of the oil industry? While COP28 President-Designate Sultan Al Jaber alone cannot force a consensus among all countries at the UAE-hosted climate conference in November, his role gives him the power to set limits on what kind of progress is possible, and many are skeptical given his position as chief executive of Abu Dhabi National Oil Drilling (Adnoc), Bloomberg writes.

There’s a lot on the line: The continued expansion of Adnoc’s production capacity raises doubts that Al Jaber will push for goals that are crucial for avoiding large-scale climate disasters, including reaching a conclusion on a phase-out plan for oil and gas and pushing countries to fulfill their unmet promises of allocating USD 100 bn in annual climate funding to developing countries, the business information service says. Climate groups have been bringing up Adnoc’s track record of exaggerating its renewables operations and its failure to report its aggregate emissions. One watchdog group, Climate Action Tracker, has said that Adnoc’s plans are “highly insufficient.”

But some think Al Jaber’s background is a plus: US climate envoy John Kerry suggested that Al Jaber’s position, both as a businessman and a diplomat, will help solutions “move faster and at scale.” The president-designate agrees with critics that a solution to the climate crisis is urgently needed, and that initiatives need to be seen through instead of “gathering dust at a showy reception.” However, Al Jaber is yet to present a clear plan on how that will be achieved, Bloomberg notes.

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THE DANGER ZONE- Unchecked climate change could turn deadly for MENA: Annual heat-related deaths could soar in the MENA region by the end of the century if global warming is not reined in, according to research by the Lancet Planetary Health. The research suggests the region will see 123 deaths per 100k people by 2100 under a high-emissions scenario. This is over 60x the current rate for the region, which is at two deaths per 100k people. This current rate is low compared to other regions due to the young population and existing adaptation strategies to hot weather.

All eyes on…: Under a high emissions scenario, all or most of MENA is forecast to see substantial warming by the 2060s, with temperatures increasing the most in North Africa and the Arabian Peninsula, the research paper said. However, Iran, despite being in neither of these two areas, is expected to suffer the biggest hit in the region under the high-emissions scenario, seeing some 423 deaths per 100k of the population. Mortality rates will also be high in Palestine, Iraq, and Israel. However, the smaller Gulf countries (Qatar, Oman, and the UAE) will see the greatest percentage increases in heat related deaths. Egypt comes first in terms of highest absolute number of heat-related mortalities in the region, with a current annual rate of nearly 2.6k deaths.

But there could be a way out: The projected death rate by the end of the century could be slashed by more than 80% if warming is brought under control, the study said. “Global warming will need to be limited to 2C to avoid the catastrophic health impacts estimated in our study,” lead author of the paper Shakoor Hajat said, according to Bloomberg. “Even with stronger action, countries in the region need to develop ways other than air-conditioning to protect their citizens from the dangers of extreme heat,” Hajat said.

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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.

Turkey is hosting the International 100% Renewable Energy Conference from 4-6 May in Istanbul. The event will bring together experts to discuss the integration of renewables, renewable energy technologies and applications, and the Roadmap to 2050.

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.

OPEC Fund extends USD 40 mn to Acwa Power for wind farms: The OPEC Fund for International Development approved two separate loans worth USD 20 mn each to finance two of Saudi renewables company Acwa Power’s wind farms in Uzbekistan, according to a statement.

Where’s the money going? The credit line extended by the OPEC Fund will be channeled toward the construction, operation, maintenance, and development of 128 km transmission infrastructure for Acwa’s USD 658 mn 500 MW Dzhankeldy Wind Farm, according to the statement. The Saudi developer will also funnel a portion of OPEC’s financing towards the construction and installation of 160 km transmission infrastructure for its USD 690 mn 500 MW Bash Wind Plant to connect it to the national grid, the news outlet notes.

Who’s paying in? A consortium including AFD Group’s Proparco, German development bank Deutsche Investitions- und Entwicklungsgesellschaft, as well as the Industrial and Commercial Bank of China, and the Asian Development Bank is financing the loan packages. The European Bank for Reconstruction and Development will serve as the technical bank for the transaction and Standard Chartered Bank as the documentation bank.

There’s lots more in Acwa’s pipeline: Acwa Power signed three power purchase agreements totaling USD 2.5 bn in March 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. Earlier in January, Acwa signed an agreement to build a green hydrogen plant and a green ammonia pilot project in the country.

And the investments will keep rolling in: Acwa has already poured in a total of USD 5 bn to fund the five projects it owns and operates in the country — including the wind farms OPEC is financing. The company plans to invest a total of USD 10 bn in Uzbekistan’s renewables projects over the next five years.

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. Both projects will offset some 1.8 mn tons of CO2 equivalent over their life-cycle, Zawya notes.

Can water-based batteries plug the EV industry’s need for lithium? In a bid to wean off reliance on lithium as a critical mineral for EV battery production, automakers and researchers around the world are looking at alternative battery minerals that are not as expensive or as rare, with viable alternatives being studied including sodium-ion cells. Researchers at Texas A&M University in the US are developing water-based, non-metal battery conductors, according to research published in Nature Materials.

Water-based how? Similar to regular batteries, the models the researchers have been developing over the past few years entail the same building blocks of conventional cells: cathodes, anodes, and electrolytes. The significant differences in the cells they are developing is the use of electrodes (battery conductors) sourced from polymers instead of metallic alternatives, and the use of electrolytes (essential minerals such as potassium, calcium, and sodium) sourced from water and organic salts. The polymers, unlike metals that swell up when interacting with electrodes, are more heat-resistant and do not expand when in contact with electrodes, leading to a power storage capacity that is 1k% higher than lithium counterparts, the study notes.

What they’ve learned: The recording of redox reactions — oxidation-reduction interactions that see electrons transferred between different materials, as is the case of polymers reacting with water-based electrolytes — by the Texas A&M scientists is making the case that non-conjugated polymers are ideal materials to create high discharge voltage electrodes for a host of different applications, including EV battery production.

Next steps: The researchers are working on resolving reactions between their polymer electrodes and electrolytes, which see simultaneous transfers of ions, electrons, and water molecules. They also plan to conduct simulations to study the energy storage capacity of radical polymers in aqueous environments.

In spite of being one of the regions most affected by climate change, MENA is falling behind on funding innovation to mitigate and adapt to the effects of it, according to a report (pdf) by the Clean Energy Business Council (CEBC). The report found an absence of patient capital necessary to return investments on climate tech as well as misperceptions that climate tech is still not a profitable endeavor. Despite the findings, four regional VC funds we spoke to said that they were eyeing investments in climate tech in the near-term, and all of them noted an increased appetite among VCs and investors for climate and clean tech as development money pools into the sector — with all of them comparing the sector to the early days of fintech.

Climate-focused funds on the rise: Egypt-based Flat6Labs announced a USD 95 mn fund in March that will go to 160 startups working in climate and cleantech in East, West and North Africa. In February, Dubai-based deep-tech VC fund 8X Ventures — which has 12 companies in its portfolio, mostly in the UK, India and Bangladesh — announced plans to allocate USD 25 mn to cleantech and climate tech in the region. Hossam Allam and Sherief Kesseba co-founded the pan-African Climate Resilience Fund in September, which will deploy USD 25 mn to agrifoods over the next two years. The fund supports startups working in agrifood and nature-enabled solutions across Africa and focuses on investing at the intersection of agrifood and climate, Allam tells us.

Impact investors are shifting to climate tech: The UAE-based VentureSouq — a venture capital firm for global early-stage tech startups — includes climate tech in its conscious collective investment thesis, created for investing in founders harnessing technology to address critical economic, environmental, and societal issues. VentureSouq senior investment associate Lola Flores tells us they have developed a climate thesis and are seeing a “large appetite” for climate tech investing as the ecosystem matures. Other VCs with a climate tech mandate include Nairobi-based Catalyst Fund and Norway’s Katapult, which have invested in agtech, waste management, and energy startups in Egypt, Morocco, and Tunisia. Others like Morocco’s EmergingTech VC and Iraq’s Euphrates Ventures have made investments in agritech startups in their respective countries.

From fintech to climate tech: Algebra Ventures Managing Partner Tarek Assad and Flat6Labs’ CEO Ramez El-Serafy agree climate tech appears to be following the same trajectory as fintech, with global, impact-driven capital increasingly being directed to climate and greentech solutions. Assad tells us that governments, development finance institutions (DFIs), local investors and global investors, as well as large commercial organizations are seeing the benefit and the trend and want to get in early but it takes time to assemble the sector, since proprietary tech is hard to come by. He tells us that building local and regional climate and clean tech will require a different model that depends on homegrown talents and, in some cases, technology. El-Serafy agrees, attributing the uptick in the climate tech pipeline to capital flowing into greentech solutions.

Climate tech needs more innovation and technical know-how: El-Serafy tells us that, in spite of surging interest in the sector, developing an organic pipeline for climate tech and creating mechanisms for tech transfer from universities to market will take time. “We have really good engineering talent in Egypt and we’re trying to work with students and academic bodies to drive innovation in this space and take it to the market,” he adds. On the flipside, Assad notes that adapting models that have worked elsewhere is no guarantee for success in climate tech, and that the skill sets needed are still being developed, with big projects likely to benefit the green job market. “In some cases, you need strong locally developed tech components, so the teams that emerge to work on climate tech will definitely have a stronger technical side. Those that have that domain expertise will get ahead, although it’s still not clear how they will acquire the skills needed to develop the sector,” Assad says.

So, which sectors are drawing the most interest? Assad notes rising interest in EVs and EV components, but points to clean tech, waste management and agrifoods as areas of interest as well. Energy, waste management and water treatment are all emerging as areas of interest, El-Serafy notes, with many startups that aren’t asset-heavy focusing their efforts on improving operational efficiency and innovating in the process. Hossam Allam tells us that VCs are increasingly eyeing agritech and agrifood, as they see “the size of the prize.”

Where do the big bucks for green transition go? Tns of USD needed for the green transition globally would require joint efforts from both the private and public sectors and some areas of the green transition will draw in more funding, CNBC reports, citing asset managers. Global head of Macquarie Asset Management’s Green Investment Group Mark Dooley sees a large portion of the investments going towards transmission grids with a growing appetite for new technologies related to energy transition, including electric vehicles. “It’s a tall order, but the feeling that we have, the experience we have, is that the investor appetite to be part of this transition is enormous,” Dooley said. Clean energy investments need to reach over USD 4 tn by 2030, according to the International Energy Agency, while the International Renewable Energy Agency puts the number at USD 44 tn by 2030 if the world stays on track towards the 1.5 degrees global warming goal.

Miners look beyond China: Growing interest in the processing of energy transition metals outside China is being triggered by growing geopolitical conflicts and chances of industrial decoupling, one of Asia’s leading hedge funds Tribeca Investment Partners told Bloomberg. Portfolio Manager John Stover said miners will look into appending processing capacity along large deposits with a move downstream. “It’s just supply chain 101, you don’t want to be concentrated in an area where you have doubts about the future in one way or another,” partner at Tribeca Capital Scott Clements said. “Geopolitically, it’s pushing people to do that and governments are throwing money at it,” Clements added.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Ice melting in Antarctica is slowing down the ocean’s water flows and could have an impact on marine food chains and the stability of ice shelves, a new study published in Nature found. The slowed movement of water flows hinders the delivery of heat, carbon, oxygen, and vital nutrients around the globe. (Reuters)
• The companies developing the 2 GW Al Dhafra PV park in Abu Dhabi — which include Taqa, Masdar, EDF Renewables, and China’s Jinko Power — have completed installation of the plant’s solar panels, which total some 3.5 mn PV units. (Zawya)
• Mining debris could be a lifeline for rare earths as the West tries to wean themselves off supplies from China. (Reuters)

UAE’s carbon sequestration plan gets a push: UAE-based business conglomerate Essa Al Ghurair inked an agreement with the UAE’s Climate Change and Environment Ministry to plant 500k to 1 mn mangrove tree seeds and seedlings in the next decade, Wam reports. Under the agreement, the ministry will provide technical assistance on mangroves planting, including soil and water studies on the place of planting. The cooperation comes under the UAE’s National Carbon Sequestration plan in which the country targets planting 100 mn mangroves by 2030. The project — carried out by the ministry in collaboration with the private sector and international NGOs — will increase the number of mangroves to 100 mn from 30 mn in a bid to create a carbon sink to sequester carbon.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Morocco will have 2.5k EV charging stations by 2026: Morocco’s Intersectorial Association for Electric Mobility (APIME) plans to roll out 2.5k EV car charging stations in the key cities of Tangier, Rabat, and Casablanca by 2026. APIME was established earlier this year with the aim of accelerating the building of EV infrastructure in the country. (Morocco World News)
• Oman’s state energy company OQ will plant 250k wild tree seedlings as part of an agreement signed with Oman’s Ministry of Agriculture, Fisheries and Water Resources. The agreement is part of Oman’s Green Initiative which aims to plant a total of 10 mn wild trees. (Oman News Agency)

Health concerns from e-waste piling up in East Africa’s landfills grow: Tech stakeholders and authorities in Kenya, Tanzania, Uganda, Rwanda and Burundi are warning of serious environmental concerns stemming from the lack of facilities available for the safe disposal of electronic gadgets, Kenyan outlet the East African reports. A report by the World Health Organization (WHO) singled out thyroid dysfunction, reduced fertility, and certain cancers as possible consequences of e-waste exposure. Over 1k harmful substances — including lead, mercury, nickel, brominated flame retardants and polycyclic aromatic hydrocarbons (PAHs) — are found in e-waste landfills, according to WHO.

France joins in the global carbon subsidy war: Renewable companies in France are fearful of falling behind due to the Biden administration’s subsidies under the Inflation Reduction Act, leading French lawmakers to propose offering tax breaks and subsidies of their own, Reuters reports. The proposals suggest the size of a company's investment and how much it generates in renewables will determine the amount of tax breaks and subsidies the companies are eligible for. If passed, the policy would target producers of batteries and critical metals, electrolysers, heat pumps, next-generation nuclear plants, PV and wind generators, as well as carbon capture and storage technologies.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Dubai-headquartered water management solutions provider Metito has signed an agreement with Tanzania’s Dar Es Salaam Water Supply and Sanitation Authority to design, build, and operate a new 6k cubic meter per day wastewater treatment plant. The plant is expected to be inaugurated in October 2024. (Zawya)
• Japan is set to revise its hydrogen strategy to 12 mn tons by 2040 as demand on the cleaner fuel alternative picks up. (Reuters)

Solar powered EVs, anyone? Automakers are on a quest to manufacture functional solar-powered electric vehicles, and while many firms have abandoned their projects for lack of capital to push development forward, Toyota and Hyundai may have cracked the code, Bloomberg writes. The new Sonata sports a roof made up of solar cells able to generate 200 watts of solar energy, enough power to add an additional 6-6.5 km of range per day depending on cloud cover, TechCrunch writes. Toyota also has an add-on option for the hybrid versions of its Prius models which enables motorists to equip their car roofs with solar panels, adding some 1.25k km in solar-powered driving range annually, Bloomberg notes.

More to come: Both Hyundai and Toyota plan on outfitting upcoming models with solar cells, including the Ioniq 5 EV. The automarker also plans to design its new all-electric EV the bZ4X with a similar system. Other companies are jumping on the bandwagon, with Tesla CEO Elon Musk telling customers the new electric Cybertruck would have an option to equip the EVs with solar cells.

Solar-powered EVs are not unheard of in MENA: Netherlands-based firm Lightyear — which declared bankruptcy in January this year — had showcased its solar-powered EV Lightyear 0 at the Sharjah Research, Technology and Innovation Park (SRTIP) back in October.