Egypt set to build USD 1 bn integrated industrial complex for flat steel to be used in EVs and renewables components

Good morning, wonderful people. We’re capping the week with another relatively slow day on the climate news front as we slip into the weekend.

THE BIG CLIMATE STORY- Egypt is planning to set up an integrated industrial complex worth USD 1 bn with an unnamed global firm to produce flat steel for use in EVs and renewable energy components.

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

THE BIG CLIMATE STORY OUTSIDE THE REGION- EU launching probe over China’s “artificially low” EV pricing: The EU is launching an investigation into Chinese subsidies for EVs in efforts to ward off a flood of cheap imports. “Their [China’s] price is kept artificially low by huge state subsidies which is distorting our market,” head of the EU’s executive arm Ursula von der Leyen said on Wednesday in her annual speech to the European Parliament. Von der Leyen said that the bloc will fight back against China’s domination of the global car market through aggressive underpricing. Tensions between China and the EU have been simmering for months, with the bloc’s industrial core at risk of losing its share to faster Chinese companies. The investigation marks the first attempt to slow down competing state support for green technologies, after more than a year of ever larger subsidies in the US, China, the UK and Europe.

What could happen next? Depending on the results, it could move the trading partners toward “more aggressive, tit-for-tat protectionist measures,” Bloomberg explains, which would hit the bloc’s carmakers hard. Potential tariffs from the probe could have a far bigger impact than any previous anti-subsidy actions against Chinese imports given the market’s fast-paced growth.

If China continues in the same trajectory, it can control 15% of the EU market by 2025: The share of Chinese brands of EVs in the bloc was 8% last year, according to an EU official who spoke to Bloomberg. With Chinese models about 20% cheaper than domestic offerings, the expectation is that they will control 15% by 2025, the official said.

The EU probe is getting coverage from the international press: Reuters | Bloomberg | The Financial Times | The Associated Press | CNN | The New York Times | The Wall Street Journal

---

WE HAVE JUST FOUR DAYS TO GO until we see some of you at the Enterprise Finance Forum, which takes place 18-19 September (Monday and Tuesday) at the St. Regis Hotel on the Nile Corniche. This flagship forum is the latest in our must-attend series of invitation-only events, where CEOs, bankers, investors, founders, and corporate leaders will meet to discuss the trends shaping the future of banking, finance, NBFIs, and fintech — and of their clients.

What to expect: Join Karim Awad (CEO, EFG Holding), Hassan Allam (CEO, Hassan Allam Holding), Pakinam Kafafi (CEO, Taqa Arabia), Hazem Moussa (chairman, Contact Financial Holding), Tamer El Emary (group CEO, GB Capital), Hoda Kassem (Cairo global services center director, HSBC Egypt) and many others for talks on everything from investing in uncertain times, to whether NBFIs are a bubble. Stay tuned for the unveiling of our full list of speakers in the coming days.

Tap or click here to view the FULL AGENDA with SPEAKERS.

There will be plenty of parking available at the venue for all those attending.

** We are honored to count some of the region’s most important financial institutions as

our partners for this special event. The Enterprise Finance Forum could not take place without the support of our partners including Banque Misr, Al Baraka Bank, FABMISR, HSBC, Mashreq, Banque du Caire, CI Capital, Global Corp, Visa, Hassan Allam Utilities, the IFC, and Post for Investment.

---

OVER IN COPLAND- The second Global Dialogue in preparation for COP28 will take place in Abu Dhabi next month: In a closed session on the sidelines of the World Investment Forum, the second COP28 preparatory Global Dialogue will take place over two days with a focus on climate finance and investment, according to the forum website. The second Global Dialogue will aim to identify the “challenges, barriers and roadblocks in accelerating the just energy transition; develop actionable solutions and innovations for policies, institutional arrangements, finance and technologies; and explore avenues to direct finance flows towards the implementation of mitigation projects on the ground,” according to the event description. The dialogue will be held in partnership with the COP28 Presidency, the UNFCCC, the International Renewables Energy Agency (Irena), and the Abu Dhabi Global Market, and will incorporate finance related events from the World Investment Forum. The overall outcome of deliberations will feed directly into COP28 negotiations.

REMEMBER- The first global dialogue was held in Bonn earlier this year, where the agenda for the meetings failed to be agreed on, and the head of the UN’s Climate Body Simon Stiell expressed dissatisfaction with the outcomes at the time.

---

WATCH THIS SPACE #1- More cooperation between KSA’s Acwa and China is happening: Saudi Arabia’s Acwa Power has signed strategic MoUs with two state-owned Chinese firms in a bid to strengthen collaboration in green hydrogen, ammonia, renewable energies and integrated smart energies, according to a statement. The agreements were signed with China Southern Power Grid International Company and MingYang Smart Energy Group, according to the statement, without providing further details on the projects per the cooperation with Acwa Power.

An impressive portfolio with the Chinese: Acwa Power has implemented several projects with leading Chinese firms, including installing Central Asia’s largest wind turbine with China Energy Engineering Corporation (CEEC) and the awarding of a EPC contract for Rabigh 4 desalination project with a consortium of Power China, SEPCOIII and WETICO among collaborations.

IN OTHER KSA NEWS– The kingdom continues to ramp up its mining sector: Saudi Arabia aims to increase private sector investments in mining to SAR 171 bn (c. USD 46 bn) by 2030, Saudi daily business newspaper Al Eqtisadiah reports, citing statements by the country’s Industry and Mineral Resources Ministry. The kingdom is also aiming to increase investments to over SAR 120 bn by the end of the decade in several metal industries, including iron, aluminum, and chemical materials needed to manufacture electric vehicles.

REMEMBER- The Saudis are going big with energy transition metals: Saudi Arabia aims to become a global hub for green metals critical for the energy transition under efforts to diversify its economy away from oil. This includes tapping significant amounts of uranium and titanium discovered in the country, according to officials. KSA says it has untapped metals and minerals — including copper, zinc, phosphate, and gold — collectively worth USD 1.3 tn. KSA’s Manara — a recently established JV between Saudi Arabia’s sovereign wealth fund and state-owned mining company Ma’aden — sealed an agreement in late July with Brazilian miner Vale to grab a 10% slice of its base metals unit.

---

WATCH THIS SPACE #2- Masdar on track to double capacity by the end of year: The UAE’s renewables giant Masdar aims to boost its global renewables capacity to 40 GW by the end of the year, CEO Mohamed Jameel Al Ramahi said in an interview with Al Arabiya. Masdar’s capacity target for this year includes facilities that are operating, under construction, or are soon to begin construction, Al Ramahi said, adding that those in the early planning stage are not included in this target. Masdar aims to achieve this through a series of acquisitions that it has already kicked off, purchasing wind and geothermal businesses and projects in Europe, Africa, and Asia worth around USD 6 bn and adding an estimated 3.4 GW to its portfolio since the beginning of the year. The combined capacity for the company’s global portfolio is estimated at 20 GW across 40 countries.

REMEMBER- Masdar is planning to grow its global portfolio to at least 100 GW by 2030. It is also eyeing green hydrogen production of 1 mn tons per annum by 2030. The 2030 target of 100 GW is based on the gross capacity of projects in which Masdar will have stakes by that time, Al Ramahi told Al Arabiya.

---

WATCH THIS SPACE #3- The world is getting its first CO2 border tax next month: The European Union will kickstart the first phase of the world’s first carbon border next month, requiring importers to report the emissions emitted from products sold into Europe or risk fines, Reuters reports. Starting October, the CO2 levy’s initial phase will require firms importing steel, cement, aluminum, electricity, fertilizers and hydrogen into the EU to report CO2 emissions emitted during the production of such goods. If they fail to report such emissions, companies will be in risk of fines of up to EUR 50 per ton of CO2. A full CO2 equal to what European firms pay in Europe’s carbon market will be paid by importers once the levy enters full force from 2026, according to the business newswire.

Who will take the biggest hit: Turkey, Ukraine, China and Russia are expected to have their exports volumes hit the most by the CO2 levy, while industries in Europe, Ukraine and Britain will see minor impact during the first phase. Greater repercussions are expected when the full CO2 tax is applied in 2026.

IN OTHER EU NEWS- The European Parliament approved setting binding targets for European aviation to boost its use of sustainable aviation fuels to decarbonize the industry, Reuters reports. It aims to increase the use of SAF by ensuring fuel suppliers have 2% of the fuel accessible at EU airports as SAF in 2025, rising to 6% in 2030, 20% in 2035, and 70% in 2050. Some 1.2% of fuels must also be synthetic fuels starting 2030, rising to 35% in 2050. The targets should now get the greenlight from EU countries before it is adopted, according to the newswire.

---

WATCH THIS SPACE #4- Apple Watch going green: Three of the new Apple Watch models will have entirely fiber-based packaging as the company ditches leather in a bid to become carbon neutral by the end of the decade, according to a statement. Each carbon neutral Apple Watch will meet the criteria of 100% clean electricity for manufacturing and product use, 30% recycling or renewable material by weight and 50% of shipping with the use of air transportation. The change in criteria will result in a 75% cut in product emissions for each model.

Get Enterprise Climate

***
YOU’RE READING ENTERPRISE CLIMATE, the essential regional publication for senior execs who care about the world’s most important industry. Enterprise Climate covers everything from finance and tech to regulation, products and policy across the Middle East and North Africa. In a nod to the growing geographical ambitions of companies in our corner of the world, we also include an overview of the big trends and data points in nearby countries, including Africa and southern Europe.

Enterprise Climate is published by 5am CLT / 5am Riyadh / 6am UAE Monday through Thursday by Enterprise, the folks who bring you Enterprise Egypt, your essential 6am and 3pm read on business, finance, policy and economy in Egypt and emerging markets.

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.

Subscribe to Enterprise Climate here or reach out to us on climate@enterprisemea.com with comments, suggestions and story tips.
***

CIRCLE YOUR CALENDAR-

Morocco will host the World Power-to-X Summit from Tuesday 19 September to Thursday 21 September in Marrakech. The event brings together policymakers, industry leaders, and innovators in green hydrogen to showcase success stories in the carbon-free industry. It will also explore scaling-up projects throughout the Power-to-X value chain and hold discussions on harmonizing roadmaps of contiguous countries and adjacent regions.

Saudi Arabia will host the MENA Climate Week from Sunday, 8 October to Thursday, 12 October in Riyadh. The four-day summit will discuss climate solutions ahead of COP28. It aims to provide a platform for policymakers, businesses, and others to exchange climate solutions as well as discuss obstacles and avenues in different regions. It considers four major systems-based tracks: energy systems and industry, cities, urban and rural settlements, infrastructure and transport, land, ocean, food and water, societies, health, livelihoods, and economies. You can register here.

The UAE will host the UNCTAD World Investment Forum from Monday, 16 October to Friday, 20 October in Abu Dhabi. This year’s theme focuses on sustainable investments, with a diverse range of climate financing sessions on promoting investments in the blue economy, agrifood systems, sustainable infrastructure, carbon markets, the circular economy, strategic minerals for decarbonization, and sustainable tourism. Some sessions will tackle reform of financial institutions needed to reach net zero, such as a session on integrating nature-related risk into capital markets and financing an equitable nature economy. Public sector investments and stock exchange action on climate disclosures will also be discussed.

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

A flat steel project in Egypt for everything and anything: Egypt is planning to set up an integrated industrial complex worth USD 1 bn with an unnamed global firm to produce flat steel for use in EVs and renewable energy components, according to a statement. The project’s products will also be used in several industries including electric transformers, and the country’s metro, monorail, and high-speed rail, the statement notes.

Ironing out the details: The project will be built over 1.5 mn square meters in two phases, Egyptian Cabinet spokesman Nader Saad said. It will have a flat steel production capacity of 1.8 mn tons, with the first batch expected within 18 to 24 months from receiving necessary approvals, he added. The project will target exports to global markets as well as serve the local market, Saad said. The project has obtained approval from the General Authority for the Suez Canal Economic Zone, the statement notes.

We have some updates on Gabal El Zeit’s sale: Egypt has received five offers from investors interested in buying the country’s 580 MW Gabal El Zeit wind farm, Egyptian Planning Minister Hala El Said told Asharq Business, without revealing the names of the vying bidders.

One step closer: The government has granted an unnamed “international investor” two months to take a decision on whether to go ahead with the purchase, El Said said, adding that she expects the sale to be wrapped up by October or November.

Could it be Actis? Emerging-market private equity giant Actis is in line to acquire the state-owned 580-MW Gabal El Zeit wind farm, a government source told Enterprise last month.

REMEMBER- Egypt is selling off shares in the state-owned 580 MW Gabal El Zeit wind farm along with the state-owned 545-MW Zafarana wind farm, which are on the list of more than 30 companies and assets earmarked for privatization by the government. The sale comes under an ambitious plan by the government to bring in USD 5 bn in investment through the privatization of state-owned companies and assets. A leaked state ownership policy document to the press last month said that a joint committee between the Sovereign Fund of Egypt (SFE) and the country’s Electricity Ministry is negotiating the transaction with potential investors within specific parameters, including a tariff fee of USD 0.24 per kilowatt per hour (kWh), with 25% of it paid in EGP. The document said it expects the agreement to finalize in October this year.

Israeli waste-to-plastic startup raises 70 mn in latest funding round: Israeli waste-to-plastic startup UBQ Materials has raised USD 70 mn in a funding round led by Eden Global Partners to help fund its expansion to the US and European markets, according to a statement. UBQ previously raised USD 170 mn in 2021, and declined to disclose the company’s current valuation to Bloomberg.

Who else is in? Existing investors TPG Rise Climate, TPG Rise Fund II, Battery Ventures, and M&G’s Catalyst also contributed to this funding round.

About UBQ: UBQ has developed technology that transforms unsorted household waste into bio-based thermoplastics — raw materials needed for plastic manufacturing, according to their website. UBQ has produced plastic for car parts used in Mercedes-Benz vehicles and serving trays for McDonald’s in Latin America. The technology is able to use ordinary household waste such as half-eaten fast food, single-use plastic, and dirty diapers, Bloomberg explains.

If commercialized, the technology can help save tons of methane emissions: Keeping decomposing organic waste out of landfills and using it to create second-generation plastics instead could significantly cut methane emissions, a 2019 analysis by the Swiss environmental consulting firm Quantis commissioned by UBQ found, The Washington Post writes. Substituting a ton of UBQ’s plastic pellets for the same amount of oil-based polypropylene saves the equivalent of about 15 tons of CO2 emissions, Quantis concluded, adding that as little as 10% of its material can make the product carbon neutral depending on the type of plastic being created.

Polymer recycling is gaining traction in the region: Saudi oil giant Aramco, petrochemicals firm Saudi Basic Industries Corp (Sabic), and France’s TotalEnergies succeeded in converting oil derived from plastic waste into certified circular polymers for the first time in the MENA region last July. Morocco’s leading polyurethane foam and bedding brand Dolidol launched its greenfield plastic recycling business Dolicen earlier in June, while Japan’s Jeplan and Abu-Dhabi based recycling plastic trading platform Rebound signed a letter of intent to set up a recycled polyethylene terephthalate (PET) market in the UAE. Packaging solutions provider Felix Films received EUR 7 mn in April from the Egyptian Pollution Abatement Programme to help fund its EUR 16 mn plastic-to-PET project.

UAE and Germany explore hydrogen strategies and carbon markets: The UAE’s Ministry of Energy and Infrastructure and Germany’s Federal Ministry for Economic Affairs and Climate Action recently held an industry workshop focused on hydrogen strategies and carbon markets, Wam reports. The workshop, held in collaboration with the AHK Sustainability Guidehouse, facilitated knowledge exchange and explored possible synergies in hydrogen and carbon trading. Experts from both sides presented their national hydrogen strategies and discussed the UAE carbon trading outlook and voluntary carbon markets. The workshop also featured an interactive panel discussion on the design of the UAE carbon market.

REMEMBER– The UAE’s new energy strategy supports green hydrogen: The UAE government approved its updated National Energy Strategy last July, committing to increasing the country’s 2030 renewable capacity goal to 14 GW from 9.2 GW. The new goal represents triple the currently installed renewable energy capacity and will require AED 150-200 bn (around USD 41-55 bn) in funding. As of October 2022,the UAE had signed USD 10.3 bn worth of agreements for green hydrogen and ammonia, while a 2022 summary report found that the UAE has signed a total of 10 preliminary low-carbon hydrogen agreements. The UAE plans to snap up 25% of the global hydrogen market by 2030.

A fresh World Bank appointment for the region: The World Bank has appointed Stephane Guimbert (LinkedIn) as new Country Director for Egypt, Yemen, and Djibouti, effective 1 August, according to a statement. Prior to his new post, Guimbert served as the bank’s Operations Policy Director in its Operations Policy and Country Services Vice Presidency, where he led the Washington-based lender’s operations policy reform and review of all financing instruments. He also co-led the joint work of the IDA/IBRD COVID-19 vaccines program and the steering of the new Country Climate and Development Reports. He also served as director of the bank’s International Development Association Resource Mobilization and IBRD Corporate Finance Department.

Iran is looking to ramp up solar capacity: Iran said it will buy 1.5 GW of solar power from 10 domestic suppliers in what it described as the largest agreement of its kind in the country, Press TV reported on Tuesday, citing Iran's Renewable Energy and Energy Efficiency Organization (SATBA). SATBA’s head Mahmoud Kamani revealed that an oil refinery in Isfahan is the largest supplier of solar power under the contract, with the refinery expected to set up three PV solar plants with a total capacity of 1 GW. Nine other unnamed companies will supply the remaining 0.5 GW to the national grid, he added. He described the contract as a milestone in the country’s efforts to raise dependency on renewables in a bid to help the power grid remain efficient during peak demand days.

Big renewables targets: Iran’s renewables sector — which has a minimal share of the country’s total energy generation — relies mostly on solar, hydroelectric, and wind power plants to generate energy. Last year, Iran said it plans to add 10 GW of renewable capacity by August 2025. It also signed MoUs with the private sector last year to set up new renewable power plants across the country.

---

A fresh data analytics push for climate applications: Dubai-based AzurX and Bahrain’s National Space Science Agency (NSSA) are working with Scotland-based AstroAgency to facilitate partnerships in Earth observation and data analytics projects between the countries, the National reports. The potential partnerships could bring high-resolution carbon mapping sensors to the Gulf to monitor greenhouse gas emission management programs. It could also offer collaboration in water resource management, urbanization and infrastructure planning, monitoring carbon credit allocation, oil and gas leak detection, and natural disaster monitoring, the news outlet explains. Last month, both the UAE and Bahrain were awarded GBP 75k each under the UK Space Agency’s International Bilateral Fund which holds GBP 20 mn worth of investments.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• KSA and India partner up for renewables + desalination projects: Saudi Arabia’s Saline Water Conversion Corporation has signed an MoU with the Indian National Institute of Ocean Technology to explore joint investments in renewable energy and water desalination. (SPA)
• Dewa's new hydroelectric power plant is 74% complete: Dubai Electricity and Water Authority (Dewa)’s 250 MW hydroelectric power plant in Hatta is 74% complete. The AED 1.4 bn plant — the first station of its kind in the GCC region — is expected to be complete in 1Q 2025 with a storage capacity of 1.5 GWh and a lifespan of up to 80 years. (DFM)

Seychelles is facing financial constraint in protecting the Indian Ocean’s seagrass population in a bid to safeguard its natural carbon sinks, Bloomberg reports. The country requires an estimate of USD 61.3 mn per year for the next decade in support of its efforts to preserve seagrass meadows and other coastal habitats, but has a shortfall of USD 14.4 mn per year in meeting the financial requirements, according to the African Development Bank. Seychelles has approximately 12 species of seagrass covering 142k hectares which store 16.7 mn tons of organic carbon, equivalent to about 61 mn tons of CO2, Seychelles Conservation and Climate Adaptation Trust Chief Executive Officer Marie-May Jeremie told Bloomberg.

BP plans to increase investments in Germany's renewables and EV market: British energy giant BP plans to invest up to EUR 10 bn (USD 10.7 bn) in Germany's low carbon fuels, renewables, and electric vehicle EV charging, BP's board chairman Patrick Wendeler told Reuters. The plans include expanding BP’s existing local network of EV fast chargers, decarbonizing its refineries, developing wind power plants, and possibly a local hub to import low-carbon hydrogen. The new investment will include a EUR 678 mn payment toward the licenses BP won in July for Germany's offshore wind site tender. BP also plans to have up to 20k charging spots by 2030, Wendeler added.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• First round of Fukushima wastewater release is complete: Japan’s Fukushima Daiichi power plant has finalized the first safe release of treated radioactive water into the Pacific Ocean after it began discharging on August 24. The plant will carry out a facility inspection and cleaning before getting started with the second round in a few weeks. Japan has been facing fierce opposition from fishing groups and nations nearby to stop the process. (AP News)
• The US is on a path to halve CO2 emissions by 2030: The Inflation Reduction Act (IRA) has set the US on course to drop its CO2 emissions between 35-43% by 2030 from 2005 levels. The emissions should drop to a median of 3,300 MT from 6,130 MT. Electricity production emissions are set to drop by 49-83% by 2030, driven by the shift to renewable energy. (EPA report)