Masdar inks roadmap agreement for 500 MW worth of solar projects in Ethiopia

Good morning, wonderful people. We’re experiencing a slight lull in the news cycle, but we have a few updates for you from the region and beyond.

THE BIG CLIMATE STORY- UAE renewables giant Masdar inked a roadmap agreement with the government of Ethiopia to develop two solar farms with a total generation capacity of 500 MW.

^^ We have all the details on this story and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- Fukushima’s radioactive water disposal is happening: Japan will begin the disposal of over 1 mn metric tons of treated radioactive water from the tsunami-hit Fukushima into the ocean tomorrow. It will initially be discharged in smaller portions, with the first discharge totalling 7.8k cubic meters for 17 days starting tomorrow. The announcement comes a day after the Japanese government said it reached “a degree of understanding” from the fishing industry after months of opposition on how it would impact their livelihood.

Some still see it as “selfish”: China has described the move as “extremely selfish” and filed a formal complaint, saying it “will take all necessary measures to protect the marine environment, food safety, and public health” without disclosing which measures would be taken. Hong Kong has also described the disposal as “irresponsible” and said it would “immediately activate” import controls on Japanese seafood coming from Tokyo and Fukushima starting tomorrow.

The disposal is dominating coverage in the international press: Reuters | Bloomberg | The Guardian | BBC | The New York Times | The Washington Post | The Associated Press | The Wall Street Journal

---

OVER IN COPLAND- We have an official thematic schedule: COP28 has released a two-week program with key themes including Health; Relief, Recovery, and Peace; Nature, Land Use, and Oceans; Food and Water Systems; Just Energy Transition; Industry; Trade; Youth, Education, and Skills; Finance; Gender Equality; Cities, Regions, and Urbanization; and Transport.

When are the major days happening? The World Climate Summit — which will bring together world leaders and heads of state to discuss the climate crisis and related issues — is set to be held on 1-2 December, and the final days of negotiations will take place between 11-12 December.

ALSO- Irena will announce outcomes of its accelerator platform at the summit: The International Renewable Energy Agency (Irena) will announce the results of its Energy Transition Accelerator Financing platform (ETAF) at COP28, Wam reports, citing statements by UAE Permanent Representative to Irena Nawal Al Hosany. The UAE-backed multi-stakeholder climate finance platform has attracted some USD 1.25 bn in pledged resources to back energy transition under a target to provide financing for 5 GW of projects by 2030. Last month, the Inter-American Development Bank (IDB) committed USD 100 mn in financing for renewables projects in Latin America and the Caribbean.

---

WATCH THIS SPACE #1- Will Vestas’ 250 MW Egyptian wind farm come online in December? An international consortium led by Denmark’s wind turbine developer Vestas is set to begin trial operations on a 250 MW wind farm in Egypt’s Gulf of Suez next month before bringing the project online in December, Masrawy reports, citing a source from Egypt’s New and Renewable Energy Agency (NREA). The project — owned by NREA and implemented by a Vestas-led consortium — is expected to cost c. EUR 220 mn, and will be funded through an agreement between Egypt and European partners, including the French Development Agency, the EU, the European Investment Bank, and the KfW Development Bank.

WATCH THIS SPACE #2- Lithium ion BESS prices set for a dramatic drop by 2050: Prices for lithium-ion battery energy storage systems (BESS), which are essential for electrified transportation and the transition to clean energy, are expected to drop 16-49% by 2030 and 28-67% by 2050, according to a report (pdf) by the US National Renewable Energy Laboratory. BESS costs could fall by 47% by 2030 and by 67% by 2050, the report notes.

Why is this happening? Market demand, material costs and availability, and supply chain expansions are all expected to contribute to the drop in lithium ion battery cell price tags, the report notes. Between January and March 2023, lithium prices dropped 20% to return to 2022 levels, which stood at USD 151/KWh, according to the International Energy Agency. An anticipated 40% uptick in global lithium supplies coupled with a slow down in demand for 1Q contributed to the trend, IEA noted, adding that if the drop in prices is sustained, a drop in EV battery costs will follow.

REMEMBER- A giga-scale lithium ion battery plant is coming to our neck of the woods: UK-based renewables company Xlinks — the project developer of the GBP 18 bn Morocco-UK Xlinks interconnector — plans to build a 20 GWh lithium ion battery storage facility in Morocco.

---

THE DANGER ZONE- Egypt’s acute water scarcity is ringing the alarm bell: Egypt is nearing acute water scarcity with an annual share of water per person of 500 m3, according to a statement. Irrigation and Water Resources Minister Hani Sewilam said several measures are underway to help deal with the crisis, including a new law managing the use of water and adaptation solutions in several parts of the country.

REMEMBER- Addressing water challenges has been a top priority for Egypt, as concern continues over the impact of the Grand Ethiopian Renaissance Dam (GERD) on water supply. In efforts to diversify its water resources, Cairo has announced plans to help ensure its water security, including the EGP 18 bn Bahr El Baqar wastewater treatment facility and a USD 2.5 bn plan to build 17 solar-powered desalination plants. Egypt’s USD 50 bn water plan could even grow to cost EGP 1 tn (around USD 66 bn) by 2037, President Abdel Fattah El Sisi previously said.

---

MISSED OUR PREVIOUS FORUMS? The Enterprise Podcast has you covered: The Enterprise Podcast’s forum series has been bringing you audio recordings of what was said on stage at the Enterprise Exports and FDI Forum and Enterprise Climate Forum.

WANT TO LISTEN? Head to: Apple Podcast | Spotify | Google Podcast | Anghami | Omny.

IN THIS WEEK’S EPISODE- In our second panel from the Enterprise Climate Forum, We dive deep into what the business leaders in the climate industry in Egypt and the region have to say about how the private sector is adopting greentech, where they see the opportunities and what they’d like policymakers to do to encourage further participation. We were joined by Amr Allam, co-CEO of Hassan Allam Holding, Mohamed Ismail Mansour, CEO and co-founder of Infinity, and Sherif El Kholy, longtime partner and head of MENA private equity at Actis.

Get Enterprise Climate

***

YOU’RE READING ENTERPRISE CLIMATE, the essential MENA publication for senior execs who care about the world’s most important industry. We’re out Monday through Thursday by 5am Cairo / 5am Riyadh / 6am UAE.

EXPLORE MORE OF ENTERPRISE ON THE WEB — tap or click here to read EnterpriseAM, EnterprisePM, and The Weekend Edition on our powerful new website packed with reader-friendly features.

Were you forwarded this email? Get your own subscription without charge here or reach out to us on climate@enterprisemea.com with comments, suggestions and story tips.
***

CIRCLE YOUR CALENDAR-

The Dominican Republic will host the COP27 Transitional Committee from Tuesday, 29 August to Friday, 1 September. The meeting aims to establish institutional arrangements, modalities, governance structures, and terms of reference for the landmark Loss and Damage Fund. It also wants to expand sources for climate funding under the program.

Saudi Arabia will host the Sustainable Maritime Industry Conference from Monday, 4 September to Wednesday, 6 September in Jeddah. Organized by KSA’s Transport and Logistic Services Ministry, the event will feature over 50 speakers to spotlight sustainability, new technologies, and digitization efforts in the maritime industry. Speakers will include International Maritime Organization Secretary General Kitack Lim and World Ocean Council CEO Paul Holthus.

Kenya will host the Africa Climate Summit from Monday, 4 September to Wednesday, 6 September in Nairobi. The event will bring together government leaders and investors to share pathways to increasing Africa’s climate resilience and serve as a platform to inform and frame commitments, pledges, and outcomes, ultimately leading to the development of the Nairobi Declaration on Climatic Change.

India will host the G20 Heads of State and Government Summit from Saturday, 9 September to Sunday, 10 September in New Delhi. A G20 Leaders’ Declaration will be adopted at the conclusion of the summit, stating commitment towards priorities discussed and agreed upon during previous ministerial and working group meetings through the year, the organizers note. The last meeting of G20 energy ministers in July failed to reach consensus on a fossil fuel phasedown as several major producing nations, led by Saudi Arabia, blocked the move. Among other expected announcements, the Global Biofuels Alliance is scheduled to be launched at the summit.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

UAE’s Masdar makes solar ambitions in Ethiopia official: UAE renewables giant Masdar inked a roadmap agreement with the government of Ethiopia to develop two solar farms yielding 500 MW in the country’s Afar and Somali Regional State regions, the company said. Masdar did not provide a timeline for the projects’ completion, nor did it disclose its estimated investment ticket for the solar ventures.

We knew this was coming: The Emirati developer said it would deploy solar energy projects yielding 2 GW in Ethiopia back in January. Masdar said it would initially establish solar energy plants generating 500 MW during its initial phase of operations in the country, with plans to expand output by an additional 1.5 GW.

Masdar also has a wider African expansion mapped out: The agreement with Ethiopia falls under the UAE’s Union 7 plan, which aims to mobilize climate financing for renewables projects across Africa in a bid to meet the electricity demands of 100 mn people on the continent by 2035, the company noted. Masdar has plans to similarly deploy 2 GW of solar power in Zambia, signing an agreement to build solar farms in the country through a JV with Zambian state-owned power company Zesco. The first of the planned projects would initially have a 500 MW capacity, with plans to gradually reach a total of 2 GW.

It’s been a busy week: Ethiopia’s Agriculture Ministry and the UAE’s state-owned Abu Dhabi National Oil Company signed a letter of intent (LoI) to expand cooperation in biofuel feedstock production, carbon credit generation, and agriculture earlier this week. The LoI was penned during UAE President Mohamed bin Zayed Al Nahyan’s visit to Addis Ababa on Friday, which saw the two countries sign 17 MoUs, including Masdar’s roadmap agreement.

Superheated bricks could be the next big thing in energy storage: New technology from US-based start-up Rondo Energy could help industries cut emissions by using superheated bricks as a low-cost and zero-emission means to store industrial heat and power to high-emitting industries, according to a statement.

How it works: The Rondo Heat Battery — which is often described as a brick toaster — uses electric heating elements like those found in a toaster or oven to transform available power into high-temperature heat, according to the startup’s website. It captures intermittent electricity from wind and solar and stores it at very high temperatures in brick materials to help supply industrial heat on demand. It based its new technology on materials widely used in heating and heat storage: brick and iron wire. It says that energy stored under the system comes at half the cost of other technologies like green hydrogen and chemical batteries.

Superheated indeed: Air flowing up through the brick stack is superheated up to 1.5k degrees celsius, with the delivery rate adjusted easily by altering air flow. Automated AI patented controls help ensure that heat at the outlet is delivered at desired temperatures and pressure to meet industrial facility demands, it says. A recycling mechanism also occurs, with exhausted air recycled back through the system to help lower heat loss and boost efficiency.

Your household items operate on the same concept: There’s nothing special about the tech, your blow dryer does the same thing. “We developed a new combination of materials for the storage. You can then deliver heat continually by circulating air into the stack of that material and getting superheated air out,” CEO John O'Donnell told TechCrunch. This heat is then turned into steam in a conventional boiler or delivered in high-temperatures for heavy industrial use, he said. O’Donnell says such technology operates at a small fraction of the cost of any electrochemical battery and half the cost of any hydrogen system.

And Rondo has big backing: The rollout of the technology could be accelerated further after the company recently raised USD 60 mn in new financing from industry leaders, including Microsoft’s Climate Innovation Fund and Saudi Arabia’s leading petrochemicals firm Saudi Basic Industries Corp (SABIC) and Aramco Ventures, the statement notes. The funding will help Rondo expand overseas operations and develop and establish storage facilities globally.

And that’s not all: The US startup started operations this year at its first commercial unit to help bring down the carbon intensity of biofuel produced by Calgren Renewable fuels. The project is the US’ first commercially operating electric thermal energy storage system and the highest efficiency and temperature energy storage of its kind globally. It also announced a current Heat Battery storage production capacity of 2.4GWh/year with Siam Cement Group (SCG). It aims to ramp up storage production capacity to reach 90GWh/year.

What are gigafactories? Gigafactories are mega plants that produce bns of GWs worth of batteries in an end-to-end manufacturing process which facilitates renewable and non-renewable energy storage. The term was first coined by Elon Musk in 2013 when referring to the massive battery production facility Tesla was building, and the mega plants have cropped up in China, Europe, India, the US, and regionally, in Morocco.

Where we stand: The number of gigafactories in the construction or planning phase by 2030 is estimated at 401 amid an EV battery production bonanza, according to a recent report by Benchmark Mineral Intelligence. The latest addition to the pipeline is India’s Tata Group’s 40 GWh UK-based gigafactory — its first outside of India — which has netted some GBP 4 bn (USD 5.2 bn) in investments and will help provide nearly half of the battery production that Britain needs by 2030. The facility will launch in 2026 and provide electric batteries to Jaguar Land Rover’s future EV models.

Gigafactories are key to the growth of the EV market: These mega plants will power a booming EV industry. The EV market size in the Middle East and Africa is projected to boom to c.USD 7.7 bn by 2028 from USD 2.7 bn in 2023 at a CAGR of 23.2%, data by Mordor Intelligence showed. Such a growth will be driven by efforts to promote the use of EVs and increased awareness about energy storage solutions in the sector.

Expect a giga-boom: Gigafactories are being built in countries with automotive industries transitioning to EV manufacturing, which are increasingly looking to maximize value chain efficiency. Investments in gigafactories are set to grow tenfold by the end of the decade, Investment Monitor writes, citing research by GlobalData. It estimates between USD 106 bn and USD 177.6 bn will be poured into building the facilities as they become larger in capacity and more widespread globally.

So what makes a region attractive for investment? Aside from traditional tools like subsidies and tax breaks, other strategies being used to attract gigafactory investments such as implementing combustion engine phase out policies, emission reduction targets geared to the transport industry, strong local and regional demand for EVs, strong EV charging infrastructure, and providing clean energy supply to power the plants. Regions with industrial clusters to support battery and EV production, robust battery supply chains with raw materials, and midstream products and battery recycling facilities have proven attractive for gigafactory investment.

It’s no surprise that China reigns supreme: China is home to 125 gigafactories, over ten times the combined number in Europe and North America, according to a 2022 report by Benchmark Market Intelligence. The country is expected to have 226 battery plants in operation by 2030, representing some 4.5k GWh of annual production or 70% of global capacity. Chinese giant CATL, the world’s biggest battery maker, controls 37% of the world’s electric batteries market and is worth USD 139 bn by market value. It kicked off its overseas gigafactories presence in Germany, with the 14 GWh plant forecast to make 30 mn cells annually at full capacity, or enough to power up around 350k EVs with a 40 kilowatt-hour battery. It is projected to be Europe’s largest battery maker in Europe when its planned 100-GWh facility in Hungary reaches full capacity. It aims to kickoff production at the mega battery plant within two to three years, according to company officials.

But Chinese companies are eyeing our region: Morocco signed an MoU with Chinese battery maker Gotion High Tech in June to build a roadmap for setting up a gigafactory for EV batteries and energy storage systems. Under the agreement, Gotion High-Tech will set up a “gigafactory” with investments estimated at MAD 65 bn (c. USD 6.4 bn) in Bouknadel. The facility, which will be the first of its kind in Africa, will have a production capacity of 100 GWh and will create 25k jobs.

The region’s EV value chain plays a key part: Egypt is supporting Abou Ghaly Motors and other private sector players with incentives to get a homegrown EV industry off the ground, with the country’s environment minister expecting the first locally-assembled EVs to roll off production lines in 2024. Turkey rolled out the country’s first homegrown electric vehicle Togg last year, with plans to begin exports to Europe from the end of 2024. KSA’s sovereign wealth fund, the Public Investment Fund, holds a majority stake in EV manufacturer Lucid Motors. Construction of the EV firm’s Saudi Arabian production plant began in May this year, with the company eyeing having 80% of all its EVs made in Saudi Arabia by 2030. The kingdom’s first EV brand Ceer — a JV between PIF and Taiwanese multinational electronics contract manufacturer Hon Hai Precision Industry Company (Foxconn) — are partnering up to set up an EV production plant in Saudi Arabia’s King Abdullah Economic City (KAEC).

The upper limits of where trees are capable of growing are shifting upwards due to climate change and changing temperatures, The Guardian reports, citing a study published in Global Change Biology journal. Treelines — the lines or altitudes above which no trees can grow — are rising regularly by 1.2 meters per year on average and 3.1 meters in tropical areas, according to the study, which analyzed 243 treelines between 2000 and 2010 using remote sensing technologies. 70% of the treelines have moved upwards and continue to do so at an accelerated pace, according to the study conducted by scientists from Southern University of Science and Technology in Shenzhen, China.

Human interference makes no difference: Despite the focus on “closed-loop” treelines — treelines that completely encircle a mountain and are therefore less likely to have been influenced by human land-use change — researchers still found that treelines shifted up, indicating that they are sensitive to climate change regardless of human interference.

What does this mean? Although treeline movement may have advantages, including increasing the volume of trees and therefore reducing carbon in the atmosphere, the phenomenon could put alpine species at risk and might affect water supply to some areas as more trees block rainwater from reaching the soil.

Kaust launches new fund for financing green startups: KSA’s King Abdullah University of Science and Technology (Kaust) has launched a SAR 750 mn (c. USD 200 mn) tech fund to finance renewables and sustainability-centered startups as part of a wider new strategy for the university, according to a statement. The new fund will serve as a vehicle for early stage investments in both local and global companies across priority sectors including energy, environmental protection, and health and wellness industries. Kaust’s new strategy is expected to support ongoing biodiversity efforts in the kingdom as well, supporting among other programmes, the Kaust Reefscape Restoration Initiative in partnership with NEOM, which since 2021 has been working on cultivating and restoring hundreds of thousands of coral reefs in the Shushah Island in the Red Sea.

Egyptian real estate firm Golden Coast Company is reportedly looking to raise some EGP 8 bn (c. USD 259.5 mn) through a green sukuk issuance on the Egyptian bourse, Daily News Egypt reported last week, citing sources it says have knowledge of the matter. The company will channel the proceeds from the issuance to finance one of its development projects in Egypt’s Soma Bay. Al-Ahly Pharos will reportedly serve as financial advisor and promoter of the issuance and Al-Derini and Co. will act as legal advisor. Egypt issued MENA’s first sovereign green sukuk bonds earlier this year, selling USD 750 mn in climate-friendly securities in an issuance that was almost 5x oversubscribed.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• A helping hand by LONGi for Egypt’s solar panels? Chinese solar panel maker LONGi is considering supplying solar panels to over seven solar plants with different capacities in the Egyptian market. (Al Mal)

Denmark is allocating DKK 26.8 bn (c. USD 3.9 bn) for carbon capture and storage (CCS) projects over a 15-year period, Reuters reports. CCS developers that are looking to capitalize on the state’s incentives have to bring their projects fully online by 2029 in a bid to lock in as much as 2.8 mn tons of greenhouse gas emissions annually. The state plans to earmark DKK 10.5 bn for a CCS tender in June 2024, and DKK 16.4 bn for a tender in 2025 under plans to mitigate some 900k tons and 1.4 mn tons of CO2 respectively, according to the newswire. In January, the European Commission greenlit a EUR 1.1 bn Danish carbon capture scheme aimed at offsetting 400k tons of CO2 per year as part of Denmark’s target to push down its greenhouse gas emissions 70% by 2030 compared to 1990 levels. By 2030, the country’s CCS capacity is expected to mitigate some 3.2 mn tons of CO2 output, Reuters notes.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Historic drought causing trouble in the Panama Canal: The Evergreen Marine ship — which was scheduled to set a record for carrying the most containers through the Panama canal earlier this month — was forced to unload thousands of containers after the canal authority reduced maximum ship weights in response to lower water levels caused by the Panama drought. The restriction has impacted 170 countries that use the canal to transport key goods. (Reuters)
• Ecuador says no to Amazon oil drilling: Ecuadorians voted in a historic referendum in favor of an oil development ban in the Yasuni Amazon reserve. (Reuters)
• TotalEnergies buys stake in Norway CO2 storage project: French oil giant TotalEnergies has bought a 40% stake in a CO2 storage exploration license owned by Norwegian energy infrastructure company CapeOmega. The license is for an area located off the shore of Bergen in Norway, and the first phase will be operational next year. (Statement)

Dead flies could be turned into environmentally-friendly plastic: Black soldier flies could be turned into biodegradable plastic, helping reduce plastic production while reducing pollution, The Guardian writes, citing research by Texas A&M University. The researchers used adult flies — regarded as waste in fly farms due to their short life span — to produce the polymers. Fly farms are often established to provide feed for animals.

The recycled plastic could be used to build products needed for climate adaptation: Using the remains of the flies, the researchers were able to create a hydrogel — a network of polymer chains with an ability to absorb water — to absorb a lot of water during flood periods, to then be slowly released during droughts, according to the principal investigator. The hydrogel built was able to absorb 47 times its weight.

Why black soldier flies? Black soldier flies have an exoskeleton that is rich in nutritious compounds like chitin, which is a sugar-based polymer that provides support for insects, and is extracted by humans for chitin powder, the news outlet describes. The flies can also consume any plastic waste from the process, contributing to a circular system of zero waste as they do not have any competing uses like sugarcane, for example.

The region is looking for creative ways to recycle waste: Saudi Arabia’s Sabic and Aramco along with France’s TotalEnergies were able to transform plastic waste into circular polymers for the first time in the MENA region. Morocco set up a MAD 1 bn textile recycling project to recycle fabric waste from textile factories in the country. UAE’s Terrax is importing a new technology from Brazil to recycle waste into plywood materials.

And it's not the first time animal waste is repurposed: New-York fashion based startup TomTex created biodegradable leather using the chitosan in shrimp shells to produce a product that feels and looks like leather.

Plastic plays a main role in the climate crisis: Plastic production generated 1.8 bn metric tons of greenhouse gas emissions in 2019 globally. It is estimated that from 2010 to 2025, Egypt’s level of plastic waste will double from 0.25 to about 0.5 megatons annually. The UAE has an annual overall waste of 912.5 kilogram per capita. Plastic affects marine life and damages soil and it has toxic chemicals that may cause fatal diseases like cancer and cardiovascular disease.