Bahrain’s Green Corp acquires an undisclosed stake in UAE’s Badia Farms

Good morning, wonderful people. We have a monetarily heavy issue for you today with a bit of M&A, development finance, and earnings updates. But first…

We’re only six days away from meeting with some of you at the Enterprise Exports and FDI Forum, taking place at the Four Seasons at the Nile Plaza on Monday, 15 May.

We’re proud to announce that our friend Hassan Massoud, associate director and head of private equity for the Southern Mediterranean region at the EBRD, is joining us for the forum. Are you? Hassan Massoud is going to be speaking at the forum about the steps to take to pull in foreign partners. He is joined on stage for that discussion by Hossam Abou Moussa, partner at Apis on how to figure out what any potential partner is looking for — and how that aligns with local firms.

They’re not the only ones: Among the CEOs, top execs, bankers, and development finance folks speaking at the conference are: Tarek Kamel, CEO of Nestle Egypt; Mohamed Talaat Khalifa, CEO of Concrete; Omar Elsahy, general manager of Amazon Egypt; Khaled Morsy, CEO of DB Schenker Egypt; Shady William, managing director of IDG; Tarek Hosny, head of investments and projects at Fertiglobe; Mark Wylie, CEO of Beyti; Kareem Abou Ghali, chairman and CEO of Pasta Regina; Hossam Sallab, CEO and vice-chairman of Sallab Group and Royal Ceramica; Nada El Ahwal, CSO of Transmar; Helmy Ghazi, deputy CEO of HSBC Egypt; Nadia El-Tawil, investment officer at AfricInvest; Mostafa Bedair, CEO of Giza Seeds and Herbs; Abdallah Sallam, CEO of Madinet Masr; Yassir Zouaoui, partner at McKinsey; and Mohamed ElGebely, team leader at USAID Trade.

Topics and live interviews will include:

• Why exports and FDI are the way forward and what lessons have worked from around the world;
• What lessons can we draw from white goods, fertilizers, and garments exporters who have increased our exports;
• What are the fundamentals to creating an export and / or FDI strategy;
• What it takes to secure a place in a multinational’s supply chain.
• How industrial clusters could expedite exports, FDI and possibly be an avenue for SME development;
• What are the industries of tomorrow around which we can export and bring in FDI.

For the full agenda please click here.

** Have you confirmed your attendance? Invitations have been sent out over the past few weeks. If you have yet to confirm your attendance and would still like to join us, please reply to the invitation with an RSVP.

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OUR TOP CLIMATE STORY- Bahrain-based agribusiness platform Green Corp has acquired an undisclosed stake in the UAE’s first urban vertical farming company Badia Farms and The Abu Dhabi Fund for Development will provide Mauritania with USD 30 mn in financing to support a national potable water project.

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

HAPPENING TODAY- The Solar Show MENA is kicking off today in Cairo and continuing tomorrow. The conference brings together policymakers, financiers, and others to develop and futureproof the region’s energy sector as one of the emerging players in developing clean energy solutions and energy infrastructure.

Over in Dubai, The Airport Show begins today and runs through to Thursday. The forum will bring together over 200 aviation companies and more than 100 buyers from 23 countries. It will shed light on leading innovations in airport sustainability, digitalization, and urban air mobility to facilitate the industry’s path towards sustainable and collaborative airport infrastructure development and operational transformations.

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THE BIG CLIMATE STORY OUTSIDE THE REGION- Climate-driven weather change in Canada has been picking up headlines in the international press, as the province of Alberta — home to the world's third-largest oil reserves — has been hit by an unprecedented amount of wildfires. Alberta declared a state of emergency earlier this week on Saturday, shutting production of at least 185k barrels of oil equivalent per day — about 2% of Canada’s total output — and displaced nearly 30k residents. As of yesterday evening, over 100 wildfires are still active and over 30 of them are classified as out of control.

The story grabbed headlines in the international press: Reuters | Associated Press | Bloomberg | Washington Post | BBC

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WATCH THIS SPACE #1- Climate is a main pillar of the World Bank’s new Country Partnership Framework with Egypt: The World Bank’s 2023-2027 Country Partnership Framework for Egypt will aim to shore up the country’s resilience to climate shocks through the rollout of adaptation and mitigation policies and combining development and climate goals in the industrial and agricultural sectors, according to a statement released this week. Egypt’s government has identified a financing gap of some USD 154 bn in investment towards carbon emission reduction projects and USD 95 bn in climate adaptation projects until 2050, Chairman of the Egyptian Stock Exchange Ramy El Dokani said.

BACKGROUND- Prime Minister Moustafa Madbouly and Regional Vice President of the World Bank Group for Middle East and North Africa Region Farid Belhaj kicked off the conference for the launch of the World Bank-Egypt framework, which will see the Bank lend Egypt USD 7 bn over the next five years to support climate action and private sector expansion, among other objectives.

Egypt is updating 2030 sustainable development goals soon: Egypt’s Planning Minister Hala El Said told World Bank representatives that Egypt’s government is updating its 2030 Vision to include emerging challenges such as population growth, climate change, and water scarcity, while also taking into account regional geopolitical changes, according to a statement.

ALSO- Green bonds with the help of IFC? The International Finance Corporation (IFC) is considering participating in a green bond issuance in Egypt, Masrawy quotes IFC’s Regional Director for North Africa Cheick-Oumar Sylla as saying at the launch event. The IFC has invested in the Commercial International Bank’s landmark issuance of Egypt's first private sector green bond in 2021, Sylla said, without providing further details about the bond issuances it is considering.

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WATCH THIS SPACE #2- A global renewables goal could be COP28’s hot topic: The EU could push for a global target for renewables during COP28 in November amid an expected pushback against phasing out of fossil fuels, Bloomberg reports. European officials are expecting resistance to language calling for emissions cuts, as was the case at COP27, when the EU and allies failed to secure commitments to phase out fossil fuels.

WATCH THIS SPACE #3- Germany can meet only 30% of its own green hydrogen quota and will need to source the remaining 70% from elsewhere, Reuters quotes German Economy Minister Robert Habeck as saying. Habeck, who also serves as deputy foreign minister, said it is important to find as many partners as possible to avoid too much dependency on individual nations. Green hydrogen is a vital part of Germany’s plan to move away from fossil fuels.

Germany has already signed a series of MoUs in the MENA region: UAE renewables developer Masdar inked an MoU with Austrian utilities company Verbund to co-develop green hydrogen for southern Germany. The company also signed an agreement with Germany’s Uniper last December to develop a green hydrogen plant in the UAE powered by 1.3 GW of solar energy. Germany has also provided Morocco with EUR 38 mn to develop its first green hydrogen plant.

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WATCH THIS SPACE #4- Soaring temperatures in southern Asia this year are sounding alarm bells that 2023 could be the world’s hottest year on record, Bloomberg reports. Vietnam reported its highest temperature ever of 44.2°C over the weekend, while temperatures in Laos reached 43.5°C. Scorching temperatures in the Philippines sent its heat index into the “danger zone,” indicating a potentially deadly mix of heat and humidity. The prolonged heat wave comes on the back of a growing El Nino weather pattern pushing temperatures to unprecedented levels. El Nino is likely to develop later this year, pushing the mercury up globally, the World Meteorological Organization warned last week.

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THE DANGER ZONE- Transparency woes from mining companies? Human rights groups are expressing worries that the involvement of mining companies in a proposed “battery passport” scheme could undermine the transparency in the mining of critical minerals, The Guardian reports. Mining companies Eurasian Resources Group (ERG) and Glencore are both founders of ReSource, a proposed JV which aims to make the global car battery chain more transparent by assuring buyers that the critical minerals used in their car batteries were mined ethically. However, critics believe that this would allow mining companies to “mark their own homework” and any such program should be managed by an independent body. The transparency concerns also come from an open investigation by the UK’s Serious Fraud Office against one of ERG’s subsidiaries, Eurasian Natural Resources Corporation, which has been accused of engaging in strategic lawsuits against public participation (Slapps), which are designed to dissuade scrutiny.

ERG has been shopping in our region: Last month, Luxembourg-headquartered ERG said it is looking to build up a portfolio of energy transition minerals by investing in mining activities in MENA and the GCC. The group said it will invest USD 50 mn in Saudi Arabia’s mining sector last January, planning large-scale and tech-driven, early-stage exploration for battery transition materials in KSA’s Dawadmi region where it has already secured licenses.

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CIRCLE YOUR CALENDAR-

The UAE is hosting the UAE Climate Tech forum tomorrow and Thursday in Abu Dhabi. The event will gather over 1k policymakers, CEOs, experts, and investors to discuss collaboration on innovative technologies and economic opportunities in advancing decarbonization across all sectors.

Japan will host the G7 Hiroshima Summit from 19 May to 21 May in Hiroshima. One of the key topics addressed at the summit will be ensuring energy security with the goal of achieving net zero by 2050 based on the Paris Agreement.

The first MENA Solar Conference is accepting applications from published researchers specialized in PV technology until next 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 and news triggers.

Bahrain-based agribusiness platform Green Corp has acquired an undisclosed stake in the UAE’s first urban vertical farming company Badia Farms, according to a statement by Green Corps’ mother company Gulf Islamic Investments (GII). The merger aims to grow Badia Farms’ sustainable food production projects across the Gulf region. The UAE currently imports more than 80% of its food requirements, the majority of which are vegetables, according to the Badia Farms website.

About Green Corp: The Green Corp platform was launched last month by Gulf Ventures Capital — a Bahrain-based subsidiary of GII — to initiate and develop sustainable agricultural, aquaculture, food processing, and production projects across the GCC countries, Trade Arabia reported at the time. Green Corp also aims to strengthen domestic and regional food distribution channels. GII currently has USD 3 bn in assets under management.

About Badia Farms: Badia Farms grows gourmet produce — mostly microgreens and herbs — in indoor vertical farms in Dubai, and sources it to the UAE’s top restaurants and hotels, according to their website. Their method uses 90% less water and is more energy efficient than open field growing.

Regional interest in vertical farming is growing: The Abu Dhabi Developmental Holding Company (ADQ) launched a vertical farming project in collaboration with Italy’s Zero Farms in ADQ’s AgTech Park last month. Once fully completed, the 40k sqm farm is expected to produce roughly 6% of the country’s consumption. In February, KSA’s sovereign wealth fund and US-based AeroFarms signed a joint venture to build and operate indoor vertical farms in Saudi Arabia and MENA.

Mauritania gets a boost from ADFD: The Abu Dhabi Fund for Development will provide Mauritania with USD 30 mn in financing to support a national project to provide the city of Kiffa with potable water sourced from the Senegal River, according to a statement. It is unclear whether the financing will be in the form of a grant or a loan. The estimated cost of the project — financed by multiple unnamed Arab and global financing institutions — is USD 320 mn.

About the project: The project involves the construction of a water intake from the Senegal River and a treatment plant with a production capacity of 50k cubic meters per second in Korai city. The water will then be pumped through a 250 km pipeline, passing through three pumping stations in the cities of Korai, Sélibabi, and Kankossa. The project also involves building three ground tanks with a capacity of 5k cubic meters each and 35 elevated tanks with capacities ranging from 25 to 500 cubic meters along the pipeline route. Some 92 towns and villages between the four cities are set to benefit from the project, which is expected to mitigate water shortages, especially during the summer, according to the statement.

Your bottle of Coke is getting greener: Equatorial Coca-Cola Bottling Company (ECCBC), Coca-Cola’s official bottling partner in Africa, has signed an agreement with the International Finance Corporation (IFC) for a EUR 64 mn loan to boost climate-friendly measures and increase plastic recycling across its operations in 13 countries on the continent, according to an IFC statement.

Who is funding the loan? Under the agreement, the IFC will provide a EUR 52 mn loan from its own account, EUR 8.5 mn from the Canada IFC Blended Climate Finance Program, and EUR 3.5 mn from the Alafaq Aljadida Middle East and North Africa Private Sector Development program.

Where’s the money going? The loan will cover refurbishing or replacing the beverage maker’s production lines, establishing a polyethylene terephthalate (PET) collection and recycling program in Algeria, replacing coolers in its distribution network for energy savings, installing solar panels at bottling plants, and piloting solar powered retail coolers in Ghana and Morocco. The strategy also includes initiatives to lower the company’s water and energy consumption in water-stressed areas like North Africa, according to a statement by ECCBC.

About the company: ECCBC is the official Coca-Cola bottler in 13 North and West African countries, according to the company’s website. It currently operates seven bottling plants and 44 production lines in Africa, serving over 160 mn consumers in its countries of operation, according to the IFC statement.

REMEMBER- Plastic consumption is a problem in MENA: Plastic consumption growth is most prominent in emerging countries in Africa and Asia. The 38 member OECD countries will still be the leading producers of plastic waste, though, producing 238 kg of waste per person each year in 2060, while non-OECD countries are estimated to produce less than half of that (77 kg).

A bad 1Q for SABIC: The Saudi Basic Industries Corp (SABIC) reported a 90% y-o-y fall in net income in 1Q 2023 to SAR 660 mn on the back of pressure on global prices, according to its earnings release (pdf).

Topline takes a hit: Sabic’s revenues plunged 25% y-o-y during the first quarter of the year to SAR 39.7 bn, according to the release. Average sales prices were down by 22% y-o-y in 1Q, while volumes decreased by 3% y-o-y in the same period.

What they said: “We are closely monitoring the changes and the recovery of the global market demand. New capacities in 1Q 2023 are adding more pressure on global prices, while there is limited relief on variable cost. We continue to keep our operating costs under control and maintain our strong balance sheet. Despite current market uncertainties, our determination to deliver on growth, innovation and sustainability remains intact,” SABIC CEO Abdulrahman Al Fageeh said.

A new boss at WNA: Emirati national Mohamed Al Hammadi (Linkedin) has been selected to chair the World Nuclear Association (WNA), becoming the first Arab to assume the post, Wam reports. Al Hammadi, who is currently the Managing Director and CEO at Emirates Nuclear Energy Corporation, will begin his tenure as WNA chief in 2024. He was also elected president of the World Association of Nuclear Operators in October 2022.

About WNA: The World Nuclear Association is a London-based international organization that represents the global nuclear industry, according to its website. It aims to promote a better understanding of nuclear energy among global stakeholders by producing authoritative data, developing common industry positions, and contributing to the energy debate.

Friendshoring critical mineral production is possible, but…: The US and key partners globally can significantly ‘friendshore’ the production of critical minerals, but this would require extraordinary technological and financial cooperation, Carnegie writes, citing a study by the Net Zero Industrial Policy Lab at Johns Hopkins University. Such partnerships among democratic states could produce sufficient minerals to allow the world to reach a global warming limit of 1.5°C, but this would require an unprecedented build-out of the mining industry. The study also identified “linchpin” countries with large reserves of minerals, such as Indonesia, Peru, Brazil, and Turkey, with which the US should “double down” its partnership. “The key will be making sure that the governments of these countries see value for themselves in being part of a resilient supply-chain partnership,” Carnegie says.

The new trade buzzword: Friendshoring, or allyshoring, is a strategy where supply chains are rerouted to countries deemed low-risk or politically and economically risk-free to insulate global supply chains from external shocks or disruptions, according to the World Economic Forum. The trade buzzword has mainly emerged following the pandemic and the Russian invasion of Ukraine, which strained global supply chains.

Speaking of critical minerals: Fears that a copper scarcity will hamper the energy transition are unfounded, as aluminum can serve as a substitute “for almost all applications,” according to a study by NEONresearch. The paper says that aluminum can conduct electricity as well as copper and is 1.2k times more abundant. It also argues that the shift could be good for the environment, since aluminum emits less carbon in electricity production.

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An open market for renewables in South Africa is proving to be a lifeline out of the energy crisis in the country, which has been grappling with ever-worsening blackouts since last year, Bloomberg writes. The government is now opening a door for renewables, abandoning some of the previous constraints impeding the use of renewables. The country is now seeing a boom in the trade of solar panels and lithium-ion batteries. However, this transition could be at risk after South Africa's ruling African National Congress voiced support for plans to extend the lives of sclerotic coal-fired furnaces to address the power cuts. Such a move could put the USD 8.5 bn global effort for clean energy transition at jeopardy, according to the business newswire.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• 15 species of invertebrates in the rivers of the European Alps could lose most of their habitat and face extinction, as the mountain range’s glaciers melt at an unprecedented rate. (The Guardian)

Oman and Belgium seek cooperation in green hydrogen: Omani Energy and Minerals Minister Salem bin Nasser Al Aufi signed a declaration of intent with Belgian Energy Minister Van der Straten to enhance cooperation in green hydrogen, as part of Oman’s plans to become a regional green hydrogen hub, the Omani ministry said.

The sultanate is ahead of the game in regional green hydrogen plans: Oman has signed 11 agreements — the second biggest number of green hydrogen preliminary agreements in the region, trailing behind Egypt’s 23 agreements. The International Renewable Energy Agency also said in February that Oman is one of four countries leading MENA’s green hydrogen development. To date, Oman is the only country to have released its strategy and aims to produce between 1 and 1.25 mn tons annually by 2030.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Funding for the US, UAE-led Agriculture Innovation Mission for Climate has grown to USD 13 bn since its launch in 2021. The fund aims to cut agriculture emissions from livestock, machinery and fertilizer use — which account for about 10% to 12% of greenhouse gas emissions. (Reuters)

Is California the “Saudi Arabia of lithium”? Mineral extraction companies are racing to strike lithium near the Salton Sea in California, a region that some are now calling the “Saudi Arabia of Lithium” or “Lithium Valley,” CBS News reports. CEO of lithium recovery company EnergySource Minerals Eric Spomer said that he is confident that the state is sitting on a supply of lithium that is over 300k tons a year — roughly over half of the world’s current lithium supply. According to Spomer, his company could recover enough lithium to support 7.5 mn electric vehicles a year, representing half of the total car and truck sales in the US.

Brine from the Salton Sea is the secret behind the abundance of lithium: While most lithium is extracted from rocks, or recovered from evaporation ponds, EnergySource Minerals is breaking ground on a “clean, [USD bn] facility in the next few months to extract lithium from the brine before reinjecting it underground,” CBS News writes.

REMEMBER- Lithium is a necessary component for the production of EV batteries and electronics. Several countries in the region have been doubling down on mining efforts in a bid to meet rising demand for the mineral, which is among several “green metals” considered key for the energy transition.

ALSO- China is set to unveil new policies to shield supply chains including possible subsidies for manufacturing, Bloomberg reports, citing analysts. China’s focus on protecting its supply chain comes as Washington moves to shun Beijing from advanced chip technology.

Amsterdam’s Schiphol Airport taking a hardline on emissions: The Netherlands largest airport Schiphol is negotiating a potential ban on night flights and private jets starting from 2026 in a move that may set the bar for how countries handle climate politics and the growing backlash against emissions, Bloomberg reported last week. The plan will come into effect depending on the outcomes of ongoing negotiations and litigation.

Efforts to curb emissions and noise pollution at Schiphol began last year: Airlines challenged the Dutch government’s proposal to cut the number of flights from 500k to 440k by 2024 in court, and won due to the government not following the “correct procedure,” the news outlet explains.

Private flights generate 20 times more CO2 per passenger than commercial flights, Bloomberg said, citing comments by Schiphol. Some 17k private jet flights crossed its runways last year alone. Around 30% to 50% of private jet flights from Schiphol go to holiday destinations that are also served by commercial flights.