Sawiris’ backed OCI Global signs an offtake agreement with US green hydrogen developer New Fortress Energy

Good morning, wonderful people. We have a packed issue with updates from around the region this morning, but first…

IT’S TODAY- The Enterprise Finance Forum is taking place today and tomorrow 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.

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OUE TOP CLIMATE STORY- Netherlands-based chemicals producer OCI Global — in which Egyptian bn’aire Nassef Sawiris owns a 38.8% stake — has signed an offtake agreement with US-based project developer New Fortress Energy (NFE) to purchase green hydrogen from NFE’s planned large-scale green ammonia plant in Texas.

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

THE BIG CLIMATE STORY OUTSIDE THE REGION- California is taking big oil to court for downplaying fossil fuel risks: The state of California — the world’s fifth largest economy — is suing oil majors including BP, Exxon, Chevron, Shell and ConocoPhillips for causing USD bns in economic and environmental damages by misleading the public on the impact long-standing fossil fuel extraction has on the economy and communities. The lawsuit brought forward by the state’s Attorney General Rob Bonta to San Francisco’s County Superior Court alleges big oil firms and trade groups— including The American Petroleum Institute — have known since at least the 1960s that their operations are warming the planet and causing “tens of bns of USD” in damages, and seeks to create of a carbon abatement fund aimed at mitigating the impact of continued oil and gas extraction. “For more than 50 years, Big Oil has been lying to us — covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet,” California Governor Gavin Newsom told the press following submission of the state’s 135-page complaint.

The story grabbed headlines in the international press: New York Times | The Guardian | AP News | Reuters | Financial Times | Bloomberg | CNN | France 24 | Deutsche Welle

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WATCH THIS SPACE #1- Algeria wants to partner with US oil giants on renewables: A delegation from Algeria’s state-owned oil firm Sonatrach and state-owned gas firm Sonelgaz are heading to the US in November to discuss potential partnerships in renewables and green hydrogen with ExxonMobil, Chevron, and Occidental Petroleum, Zawya reported on Friday. The meetings will take place from 7 to 9 November as part of the annual US-Algeria Energy Forum, attended by delegations from the relevant government ministries. “The main topic of the meeting this year is the setting up of US renewable energy projects in Algeria … we are especially interested in green hydrogen projects,” head of the Algerian-US Business Council Ismail Shaikhoon told Algeria’s state radio.

But the US isn’t a big fan of Algeria’s investment climate: The United States has criticized Algeria’s state enterprise-dominated economy, saying it has an “inconsistent regulatory environment,” an executive summary of its 2023 Investment Climate Statements on the North African country reveal. “Algerian government officials frequently encourage US companies to invest in Algeria with particular focus on agriculture, information and communications technology, mining, hydrocarbons, renewable energy, and healthcare,” the summary notes, “however certain regulations explicitly favor local firms at the expense of foreign competitors, and frequent, unpredictable changes to business regulations have added to the uncertainty in the market.”

Heavy on fossil fuels: The country’s hydrocarbon production accounts for 95% of export revenues and c. 40% of government income, the summary notes. Despite Algeria emerging as a main source of gas to European countries due to the Russian invasion of Ukraine, rising domestic energy consumption and underinvestment in production may be an obstacle for the country to boost its exports, according to the report.

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WATCH THIS SPACE #2- Oman has big green hydrogen plans: Oman is targeting 8 mn tons of green hydrogen production by 2050 in a bid to establish itself as a green industrialization hub, Director General of Renewable Energy and Hydrogen at the Ministry of Energy and Minerals Firas Al-Abduwani said in an interview with Gulf Leaders Circle. The sultanate plans to nab 8% of the global amount of tradeable green hydrogen — which is expected to reach 100 mn tons by 2050 — and aims to convert green hydrogen to synthetic aviation fuel in an effort to supply sustainable aviation fuel to the region, Al-Abduwani said. Oman also intends to reduce its carbon footprint by decarbonizing transportation, incentivizing the adoption of EVs, and establishing an electric vehicle charging network.

WATCH THIS SPACE #3- TotalEnergies could sink USD mns in Adani Green: French oil giant TotalEnergies is in talks to invest up to USD 700 mn in Adani Green’s renewable projects, Bloomberg reported on Friday, citing people with knowledge of the matter. While negotiations are currently ongoing, the investment would increase TotalEnergies presence in the Indian energy market and give Adani Green more funds to develop new renewable energy projects. TotalEnergies is the second largest shareholder of Adani Green, with a 19.75% stake, according to data compiled by Bloomberg. The company bought a 20% stake in Adani Green in 2021 as well as 50% interest in some of Adani Green’s solar farms in a USD 2.5 bn transaction that was among the largest foreign investments in India.

REMEMBER- The Qatar Investment Authority reportedly bought shares worth USD 500 mn in India’s Adani Green Energy last month, representing some 3% of Adani’s green energy arm, sources close to the matter told the Economic Times. If confirmed, the investment by QIA would provide a lifeline for Adani after alleged fraud battered investor confidence earlier this year .

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WATCH THIS SPACE #4- Beijing condemns EU probe into Chinese EV subsidies: China slammed a fresh probe by the European Commission into China’s subsidies for electric vehicles, saying it will have a “negative” impact on economic and trade ties, Reuters reported on Thursday, citing a statement by the country’s Commerce Ministry. "China believes the investigative measures proposed by the European Union are in reality to protect its own industry in the name of 'fair competition'," it said. "It is a naked protectionist act that will seriously disrupt and distort the global automotive industry and supply chain, including the EU, and will have a negative impact on China-EU economic and trade relations,” the ministry said.

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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 carbonfree 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.

OCI Global inks offtake agreement in the US: Netherlands-based chemicals producer OCI Global — in which Egyptian bn’aire Nassef Sawiris owns a 38.8% stake — has signed an offtake agreement with US-based project developer New Fortress Energy (NFE) to purchase green hydrogen from NFE’s planned large-scale green ammonia plant in Texas, according to a statement released on Friday. The financial details of the agreement were not disclosed.

The details: The green ammonia plant will be powered by a 100 MW electrolyzer and the agreement allows OCI Global to increase its green ammonia production capacity to 160k tons per annum, the statement notes. Contractors developing the tech on behalf of NFE — including Poland’s ZeroParks — are utilizing the proton exchange membrane (PEM) technique, which allows for the separation of hydrogen from oxygen.

Part of larger plans: NFE’s planned project in its Texas-based Zero Parks will have an initial targeted production volume of 80k tons per annum by 2025, with plans to later double the generation portfolio to 160k tons a year later in 2026, the statement notes. The company says it is leveraging incentives in US President Joe Biden’s USD 369 bn inflation reduction act to expand operations in the US. “By leveraging its existing infrastructure, OCI can scale production to meet growing demand at pace and without significant capital expenditure, while leveraging the incentives offered under the Inflation Reduction Act’s 45V program,” the company notes in its statement. The company plans to double its current 200k ton green fuels production portfolio in Texas alone in the coming years, and says green methanol demand from OCI operations — aside from other green hydrogen derivatives like ammonia — will exceed 6 mn tons by 2028, according to a separate statement.

OCI-Fertiglobe’s green hydrogen project in Egypt is up and running: The company began in November commissioning of their 100 MW green hydrogen plant in Egypt’s Ain Sokhna, which will generate feedstock for green ammonia production once operational in 2024.

IN OTHER OCI NEWS– OCI Global now have a six-month permit to refuel ships in Port Said: The SCZone’s board of directors approved on Thursday a six-month renewable permit to OCI Global’s HyFuels to provide a green methanol ship bunkering service in the ports of East and West Port Said, according to a statement released on Thursday. The SCZone has established a committee to work on creating a new system of bunkering and marine services in Egyptian ports, including setting requirements for granting permanent licenses to practice ship bunkering with green fuels.

What they said: “We’re very pleased with this partnership with Egypt and the SCZone following the successful bunkering of the first ever vessel running on green methanol in East Port Said. Egypt will prove to be an important green bunkering hub in the coming years and will play an essential part of our global bunker network,” Bashir Lebada, CEO of OCI Methanol-OCI HyFuels said in emailed statements to Enterprise Climate.

Mubadala-backed Infracapital co-invests in British battery storage startup Zenobe: Infracapital — the infrastructure fund of British asset manager M&G backed by UAE’s Mubadala and Pantheon Infrastructure — has successfully closed a co-investment in London-based battery storage company Zenobe, according to a statement released on Thursday. The investment — which follows an initial investment by Infracapital in 2020 — is its largest co-investment to date, the statement notes.

It was a busy week for Zenobe: The London-based startup said last week that it had secured an investment of GBP 600 mn from New-York-listed buyout firm KKR, with GBP 270 mn of equity invested by existing shareholder Infracapital, according to a separate statement. The transaction — subject to customary closing conditions and regulatory approvals — will make both KKR and Infracapital joint majority shareholders in Zenobe. Japanese power giants Jera and Tepco Power Grid will remain minority strategic shareholders in Zenobe, the statement notes.

Where the funds are going: The co-investments will help boost Zenobe’s expansion in the UK, North America, Europe, Australia, and New Zealand — supporting the company’s integration of wind power into the British national power grid to back its target to commission c. 1.2 GW of storage in the UK by 2026. It will also help it with its goal to develop an additional 2.5 GW of battery energy storage assets in North America and Australia by 2030.

About Zenobe: Founded in 2017, Zenobe is a UK-based EV fleet and grid-scale battery storage specialist. It now operates in Europe and Australasia with expansion planned to North America, according to the statement. It currently has 430 MW of battery storage in operation or under construction with another 1.2 GW of projects in the works in the UK. It holds a 25% market share of the UK electric vehicle bus sector and supports c. 1k electric vehicles globally.

Emirates NBD (ENBD) has made a second investment in Turkish climate fintech startup Erguvan, according to a statement released on Thursday. No financial details on ENBD’s investment were disclosed. Erguvan secured funding via ENBD for carbon credits valued at USD 7.3 mn in a seed round last month.

Where’s the money coming from? The investment was made by Deniz Ventures under the umbrella of ENBD’s Innovation Fund — the bank’s USD 100 mn corporate venture capital arm — launched earlier this year to finance fintech and sustaintech companies in the leading lender’s key markets.

What does Erguvan do? The startup provides a B2B marketplace for environmental commodities and API-based carbon accounting software solutions tailored to financial institutions and corporations, according to their website.

More about The Innovation Fund? The fund was established last June with the idea of channeling investments into strategically relevant fintech, sustain-tech, and startups in the Middle East, North Africa, and Turkey, the fund said. ENBD has also invested in Swiss fintech Komgo via the Innovation fund, according to a press release.

Maersk forms new green methanol subsidiary: Danish shipping giant AP Moller-Maersk and its parent company AP Moller Holding (APMH) have established a new company that will produce and sell green methanol to the global shipping industry, according to statements released on Thursday by the new company (here) and Egypt’s General Authority for the Suez Canal Zone (SCZone) (here). The new firm — called C2X — aims to reach an annual production output of over 3 mn tons by 2030 by pursuing large-scale green methanol projects near the Suez Canal in Egypt and the port of Huelva in Spain, among several other planned locations, Bloomberg reported. C2X is majority owned by APMH, while its shipping arm Maersk holds a 20% stake, the companies said. The amount of capital raised by the new venture was not disclosed.

Expect more details next month: Maersk is expected to sign a framework agreement for the project with the SCZone, the Sovereign Fund of Egypt, the New and Renewable Energy Authority, and Egyptian Electricity Transmission Company at the start of October, the SCZone statement reads.

A big emissions cut: Maersk operates a fleet of 700 container ships that are responsible for around 0.1% of global CO2 emissions alone while the entire shipping industry is responsible for nearly 3% of greenhouse gas emissions worldwide, the newswire writes.

Demand for the fuel is expected to skyrocket: APMH estimates that global demand for methanol could triple to about 300 mn tons a year by 2050, with the majority being for its green type, Bloomberg reported. There is currently 153k tons of green methanol production capacity in operation globally, including synthetic methanol and pilot plants that may not be selling volumes commercially, BloombergNEF estimates show. Already some 100 ships with methanol burning engines have been ordered by shipping giants including Maersk, Cosco and CMA CGM. Read our recent explainer on green fuels for more.

Egypt will be an important piece of the puzzle: Maersk said it would cooperate with Egypt on a USD 15 bn project to produce clean fuel for ships back in September last year. Egypt’s SCZone is looking to expand the scope of its green methanol bunkering services in the near future and Scatec also signed an agreement in May to set up a green methanol plant in Damietta alongside several local firms at a cost of around USD 450 mn.

Maersk is interested in Jordan too: Last year, the Jordanian Energy Ministry yesterday signed an MoU with Danish shipping giant AP Moller-Maersk to produce green methanol in Jordan using desalinated water and renewable energy.

Masdar wants a chunk of Turkey’s wind power potential: The UAE’s state-owned renewables player Masdar is in talks to acquire a stake in Turkey’s top wind power producer Fiba Yenilenebilir Enerji in what would mark the renewables giant’s entry into the Turkish market, Bloomberg reported on Wednesday, citing people with knowledge of the matter. The sources did not provide details on the potential size of the stake that Masdar is seeking and indicated talks are not final.

We already know the UAE was planning big for Turkey: The UAE and Turkey signed in July several agreements worth USD 51 bn during a visit by Turkish President Recep Tayyip Erdogan to a number of GCC countries to lure investments to Turkey. Around USD 30 bn of the committed funds by the UAE will be directed to investments in the Turkish energy sector. The cooperation between the UAE and Turkey will see both countries pour in “large scale investments” in renewable energy, green hydrogen, hydroelectric power production, as well as finance transmission projects and battery storage facilities. Both countries also seek to expand cooperation on nuclear energy production and emerging technologies including carbon capture, storage, and utilization.

About Fiba: Owned by Turkish b’naire Husnu Ozyegin’s Fiba Group, Fiba Yenilenebilir Enerji is among Turkey’s leading five wind-power producers with 553 MW of installed capacity, Bloomberg writes, citing the company’s latest financial statement. Its total assets also include solar power plants with a capacity of 28 MW worth USD 1.31 bn as of December 2021.

Oman's Port of Duqm inks two green partnerships: The Port of Duqm inked a partnership agreement with waste management company Evergreen Gulf Recycling Hub in a bid to become an “environmentally friendly” hub, according to a statement. The Port also inked an MoU with energy-conservation solutions company Unicorn International LLC on several green projects including solar energy and green educational sessions for youth, it said in a separate statement.

A KSA lithium-tech startup is getting funds from Ma’aden and Kaust: Ma’aden has partnered with King Abdullah University of Science and Technology (Kaust) to co-invest in the latter’s lithium-tech startup Lithium Infinity (Lihytech), Ma’aden said on Thursday. Lihytech has patented a membrane-based lithium extraction technology that extracts the alkali metal from seawater, brine, red mud, and other unconventional materials. The technology also uses a ceramic membrane to filter the lithium ions effectively. The potential investment value was not disclosed.

It’s not the first time: Ma’aden and Kaust Innovation Ventures Fund announced plans to invest USD 4 mn and USD 2 mn in Lihytech, respectively, back in January. The startup said that the funds raised will be used to build a pilot facility at Kaust to extract lithium from the Red Sea and other resources in the kingdom.

Saudi is trying to get ahead of a possible future lithium crunch: The IEA expects the supply of lithium, a major component of EV batteries, to reach 420k metric tons by 2030, slightly below the 443k needed to meet announced government pledges, and well below the 702k necessary for a net zero scenario. The world could face a lithium supply deficit as early as 2025 due to the accelerated transition to EVs, CNBC said last month.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• IMF to provide Morocco with USD 1.3 bn to build climate resilience: The IMF has reached a staff-level agreement with Morocco on a USD 1.3 bn loan aimed at improving the country's resilience to climate-related disasters from the fund's Resilience and Sustainability Trust. (Reuters)
• Oman and UK discuss renewables investments: The governments of Oman and the United Kingdom reviewed ways to increase bilateral trade agreements and investments in renewable energy projects such as green hydrogen, in addition to the works of the Omani-British advisory group. (Oman News Agency)
• Iran signs cooperation agreement with China on e-bikes: Iran’s Anzali freezone has facilitated the signing of cooperation agreements between China’s Fujian Province and Iranian trade zones to invest in the production of electric bicycles and motorcycles. (IRNA)
• More transmission lines for Neom: India’s KEC International has secured a USD 138 mn contract to design, supply, and install a 380 kV overhead transmission line in Saudi Arabia’s net zero city Neom. (Statement)

TotalEnergies issues tender for 500k ton green hydrogen plant: French energy giant TotalEnergies is launching a green hydrogen tender to power six European refineries and two French biofuel plants with 500k tons of the low carbon fuel, Bloomberg reported on Thursday. Three of the refineries and the biofuel plants are in France, while the three other refineries are in Belgium, Germany, and the Netherlands. “We need electrolyzers in massive quantities. This is also the purpose of this call for tenders: to give a boost to this sector,” Reuters said, citing company director of petrochemical refining in Europe Jean-Marc Durand. The plant is planned for completion by the end of the decade and is expected to avoid 5 mn tons of CO2 emissions, reducing the greenhouse gas released from its oil and gas operations by 40% by the end of the decade, compared to 2015. The call for tenders will also consider smaller local projects, the company added.

IN OTHER TOTALENERGIES NEWS- The French energy company signed an agreement with Air Liquide to supply the Gonfreville refining platform in the north of the country with up to 15k tons of low-carbon hydrogen, reducing CO2 emissions by 150k metric tons of CO2 emissions annually, Reuters reported on Thursday.

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OPEC Fund grants USD 150 mn for 8 sustainable development projects: The Opec Fund for International Development has approved more than USD 150 mn in new financing for projects in Benin, Guatemala, Liberia, Rwanda, Tajikistan, Uganda, Zimbabwe, and Albania, according to a statement published on Thursday. The projects will support the development of infrastructure for a number of sectors including agriculture, water supply, and sanitation. Opec also approved the establishment of an Energy Access and Climate Action Trust Fund to scale-up financing for the energy transition in sub-Saharan Africa, with plans to expand to other developing regions in the future.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Petrobras ramps up wind projects: Brazil’s state-owned Petrobras will invest USD 26.8 mn in a 7 MW offshore wind turbine over the next two years and acquired a license from the Brazilian environmental protection agency to further develop 10 offshore wind projects amounting to 23 GW of capacity. (Reuters)
• A clean biomethane plant in the UK by AstraZeneca is happening: Pharma giant AstraZeneca has agreed to a 15-year partnership with Future Biogas to set up the UK’s first subsidy-free biomethane gas supply with a GBP 100 mn investment. (Statement)
• US to spend USD 1 bn on tree planting: The US has dedicated USD 1 bn to plant and maintain trees as part of a federal program including 385 projects that aims to reduce extreme heat. (The Guardian)
• Demand for labor for renewables in EU countries may quadruple by 2030: The EU may need 4x more blue and white collar labor for its wind and solar projects by 2030 with industries requiring 990k full time workers by the end of the decade, compared to 290k in 2020. Europe’s investments toward net zero could reach USD 1.81 tn by 2030. (The National)

Experts call for a global moratorium on geoengineering efforts: Experts have voiced concerns about geoengineering the planet's climate — like managing the sun’s radiation — to mitigate the effects of climate change as greenhouse gas emissions continue rising, The Guardian writes. Geoengineering is among the most controversial methods of mitigating the effects of rapid climate change, yet no agreements are in place on how countries or businesses should implement it. The Climate Overshoot Commission has called for more resources to be put into adapting to extreme weather effects, phasing out fossil fuels, and adapting more technologies like carbon capture and storage (CCUS) and direct air capture (DAC).

Effective but tricky: Geoengineering’s main focus is managing the amount of solar radiation that reaches the Earth's surface by injecting chemicals into the atmosphere to whiten clouds so they reflect more sunlight or setting up mirrors in Earth's orbit. The panel warned that the effect of these activities is not yet fully understood and they could have dangerous impacts on climate patterns and agricultural production. Geoengineering also does not address the increasing acidity of the ocean, which absorbs about a quarter of the CO2 emitted into the atmosphere. There is also the risk of a termination shock if geoengineering is used, then stopped, while emissions continue rising.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• Methane emissions from oil and gas are higher than reported: Satellite observations have revealed a 30% disparity in actual and reported emissions by the oil and gas industry reported in four countries — the US, Russia, Venezuela, and Turkmenistan. The satellite data raises questions about the statistics submitted to the UN. These statistics are based on emission factors, which are estimates of the typical methane emissions produced by equipment. (Bloomberg)