Aramco Ventures sinks USD 10 mn in Singaporean REC provider Redex

Good morning, ladies and gents. The lull in the news cycle continues, but we have a few stories making small waves in our region this morning.

THE BIG CLIMATE STORY- Aramco Ventures has invested USD 10 mn in Singapore-based renewable energy certificate service provider Redex to help the company expand into global markets including Saudi Arabia.

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

HAPPENING TODAY- The Forbes Middle East Sustainability Leaders Summit is kicking off today in Abu Dhabi and running through to Friday. The summit will gather international leaders in sustainability, technology, finance, and policy to drive green strategies globally. The agenda includes sessions on climate-smart cities, green mobility, sustainable finance, and sustainable tourism.

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THE BIG CLIMATE STORY OUTSIDE THE REGION- There is no single story dominating the headlines, but China is reportedly looking to tighten restrictions on copper production domestically to help meet its climate action targets, Bloomberg writes. The country is reportedly looking to impose curbs on copper smelting by 2035 in a bid to reduce its carbon footprint while minimizing over capacity, according to people with knowledge of the matter. One scenario the country is reportedly mulling would see copper smelters complete projects in the pipeline before curbs come into effect by mid-decade. China’s annual copper output averages some 8.8 mn tons, and the country plans to expand its volume by about 2.4 mn tons by 2026, Bloomberg notes. News of the planned copper restrictions follow Beijing's announcement last week on graphite export curbs, which it said are aimed at strengthening its national security.

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WATCH THIS SPACE #1- Masdar’s planned entry into Turkey stalls: An agreement that would have seen UAE state-owned renewables player Masdar acquire a stake in Turkey’s Fiba Yenilenebilir Enerji collapsed over a price dispute, Bloomberg reports, citing people with knowledge of the matter. Neither Masdar nor Fiba have commented on the reports.

Turkey is still looking to attract UAE investments: Abu Dhabi wealth fund ADQ and other undisclosed Emirati companies were interested in developing offshore wind farms and green hydrogen facilities in Turkey, Bloomberg reports Turkish Energy Minister Alparslan Bayraktar as saying last month. In July, the UAE and Turkey agreed to expand cooperation in the renewables and green fuels production sectors as well as nuclear and carbon storage. Abu Dhabi's investment holding company Multiply Group is in discussions to acquire an undisclosed stake in Turkish waste management and renewables firm Biotrend.

And they’re casting a net to KSA as well: In August, Bayraktar said that the country is hoping to secure partnerships with Saudi Arabia to establish renewable energy projects in Turkey that would yield 4-5 GW of clean energy.

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WATCH THIS SPACE #2- Iraq is launching a new renewable energy strategy soon: Iraq’s parliamentary energy committee will seek to approve a new electricity and renewable energy new law governing its renewable energy industry with the help of local and foreign experts, Al Iqtisad reports, citing comments made by committee member Dakhel Radi Ali. Iraq has signed several agreements with foreign companies for the development and construction of solar power plants, Ali said. The country’s parliament is yet to debate and approve the draft law before it is sent to the cabinet for final approval.

Iraq has big plans to go green: Earlier this month, Iraq said it is allocating IQD 90 bn (c. USD 68.3 mn) to install solar panel systems on 500 government buildings starting early 2024. French oil giant TotalEnergies is investing in the country’s renewables as part of a USD 27 bn cluster of energy projects, in addition to an already approved 1 GW solar plant. Masdar is planning to establish at least four solar energy plants in Iraq, while PowerChina is building a 750 MW solar power plant in the Middle East country.

With big incentives to do so as GCC-Iraq interconnection continues its expansion: A six-way interconnection project that connects the Gulf countries to Iraq could offer a gatewayfor the latter to increase its revenues through green energy exports. Al-Wafra station in Kuwait will be the main linking point to Iraq and will expand the interconnection capacity with Kuwait from 1.2 GW to 3 GW.

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CIRCLE YOUR CALENDAR-

Turkey will host the GCC-Türkiye Economic Forum from Saturday 11 November to Monday, 13 November in Istanbul. The forum aims to bring together key ministers and state officials from the Gulf countries and Turkey to explore areas of potential investments and commercial ties and to establish a network for joint projects in the energy, defense, banking, retail, and transportation sectors. The event is organized by the Gulf Research Center and Turkey’s International Cooperation Platform.

The UAE will host the MENA Solar Conference from Wednesday, 15 November to Saturday, 18 November in Dubai. The event will focus on all things photovoltaic, with a full programme on PV materials and devices, future technologies, PV reliability, and forecasting for performance assessment. The conference will also touch on how developments in system operations, concentrated solar power, and grid integration are necessary for the green transition. This will be the first scientific and technical conference specializing in solar energy systems in the region.

The UAE will host the Aviation and Alternative Fuels conference from Monday, 20 November to Friday, 24 November in Dubai. The event will bring together senior government officials and international organizations to assess progress in the development and deployment of sustainable aviation fuels (SAFs) and lower-carbon aviation fuel (LCAF) measured according to the targets outlined in the 2050 Vision for SAF, agreed upon at the last Aviation and Alternative Fuels conference in 2017.

The UAE will host the Abu Dhabi Finance Week (ADFW) from Monday, 27 November to Thursday, 30 November in Abu Dhabi. The event will gather government officials, banks, financial institutions, and VCs to delve into today’s economic, technological, and sustainability conversations.

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

Aramco Ventures invested USD 10 mn in Singapore-based renewable energy certificate (REC) service provider Redex, according to a statement. The funds — secured from investors in the Middle East, South Asia, and Japan — will help Redex expand beyond Asia, the statement notes.

Heading to our neck of the woods: "We are planning to get into the Middle East and Latin America markets in 2024 through the partnership with our strategic investors," Redex founder and CEO Jen-Wee Kang told Reuters. "The first location is probably Saudi Arabia," he added.

Who's Redex? The company runs a utilities platform to register, verify, and retire RECs in Asia. The RECs — each representing 1 MW/h of generated renewable electricity — are traded on the REDEX platform and purchased by companies seeking to offset their scope 2 emissions from fossil-fuel generated power, Reuters adds.

IN OTHER ARAMCO NEWS- Aramco-Total JV converts cooking oil into SAF: Aramco-TotalEnergies JV Satorp has successfully converted cooking oil into sustainable aviation fuel (SAF), The National reports. The project will contribute to TotalEnergies’ goal of producing 1.5 mT of SAF annually by 2030. Satorp has received the International Sustainability and Carbon Certification allowing it to produce SAF to meet an expected rise in Saudi market demand, the news outlet notes.

Not Satorp's first success: The JV processed oil from plastic waste into circular polymers for the first time in the region last July. The process should facilitate the processing of non-sorted plastics and is expected to establish a domestic value chain for the advanced plastic recycling to circular polymers.

Aramco is going big on SAF and e-fuels: The oil giant announced last week that it is bringing online two SAF demonstration projects in KSA’s Neom by 2025. The company signed an agreement to establish a separate e-fuel demonstration plant with Enowa earlier this month. It also partnered with Repsol last year to establish an e-fuels demonstration plant in Spain.

Egypt partners with IEA on green transition: Egypt's Ministry of Petroleum and Mineral Resources signed an agreement with the International Energy Agency (IEA) to establish a joint action program aimed at accelerating renewable energy projects and emissions reduction, according to a statement. No timeline was provided for the launch of the program.

The details: The agreement covers six main areas of collaboration including the preparation of modules and decarbonization programs, expanding the production of renewable energy and hydrogen, reducing emissions, supporting statistical data analysis capabilities and the sustainability of the energy sector's data provision, and studying the effect of climate change on the energy sector, the statement notes. Training and capability building programs will also be covered by the program.

Turkey’s Akbank signed agreements for two sustainability-linked loan facilities raising some USD 600 mn at 75 bp above US treasuries, according to a statement. The sustainability-linked facilities amount to USD 265.5 mn and EUR 318.45 mn with a 367-day tenor, the company notes. The issuance attracted strong demand from global markets leading to a 168x oversubscription from the initial launch figure. Akbank scaled back the facilities to 146x of the launch amount, the statement noted.

Where is the money going? Proceeds of the facilities will go towards the bank’s trade finance purposes including refinancing, the statement notes. The facilities will cover a decarbonization strategy and an increase in the aggregate of renewable energy loans made under its Sustainable Finance Framework.

Coordinators and bookrunners: Abu Dhabi Commercial Bank PJSC, Emirates NBD Capital Limited, First Abu Dhabi Bank PJSC, Standard Chartered Bank and The Commercial Bank (P.S.Q.C.) acted as joint coordinators and bookrunners on the transaction. Abu Dhabi Commercial Bank PJSC, Emirates NBD Capital Limited, First Abu Dhabi Bank PJSC, Standard Chartered Bank, and Sumitomo Mitsui Banking Corporation all served as sustainability coordinators on the transaction. Emirates NBD Capital Limited acted as the documentation agent for the loan, and Emirates NBD Bank (P.J.S.C.) acted as facility agent.

Ma’aden slides into net losses in 3Q 2023: Saudi Arabian Mining Company Ma’aden reported SAR 83 mn in net losses in the third quarter of this year — a 104% fall by our calculations — compared to a net profit of SAR 2.1 bn in the 3Q 2002, according to a disclosure to Tadawul. Its revenues dropped by 38% y-o-y from 10 bn to 6.2 bn in 3Q.

How do the numbers fair against 2Q’s performance? Ma’aden’s net losses were down 124% by our math compared to last quarter’s SAR 351 mn net income. Its revenues during the three months ending in September dropped 10.6% y-o-y to SAR 6.2 bn, down from SAR 7 bn from 2Q.

What’s behind these numbers? The significant declines are mainly due to sales falling by 3.8 bn y-o-y (and SAR 740 mn q-o-q), which Ma’aden attributes to decreasing commodity market prices of all business segments, excluding its base metal and new minerals segments. Ma’aden said in its disclosure that the losses were partially offset by a decrease in cost of sales due to lower raw material prices and severance fees which were inflated during the previous quarter of the current year. Ma’adan also had a higher income from time deposit and lower income taxes and zakat in this nine-month period.

GREEN TECH-

Solarspace plans to set up a regional HQ in the UAE: US green tech startup Solarspace has joined the UAE’s NextGen FDI programme and plans to establish an office in the UAE to expand its regional presence, Wam reported earlier this week. The UAE’s initiative was launched in 2022 by, among others, the country’s Economy Ministry, Abu Dhabi Global Markets, Sharjah Research Technology and Innovation Park, and banking group Emirates NBD, and aims to attract tech businesses to set up shop and scale their operation within the UAE.

About Solarspace: The startup — which has raised USD 443 mn in funding to date — specializes in off-grid concentrated solar power arrays which provide 3x more renewable power compared to conventional solar panels and take up less land area. The company also offers decentralized EV charging stations and is developing a net-zero water purification and desalination system.

WASTE MANAGEMENT-

Oman Be’ah teams up with Turbah and NTZ Solutions on waste recycling: Oman Environmental Services Holding Company (Be'ah) has signed agreements with Omani waste management firms Turbah and NTZ Solutions on waste repurposing and environmental conservation, according to a statement. The agreement with Turbah aims to enhance nature preservation across the sultanate by increasing recycling shredded bio-waste materials into compost. The second agreement with NTZ Solutions aims to minimize consumption of natural resources and support establishment of the country’s first biochar production plant, Muscat Daily notes. Biochar can improve soil health, while storing carbon and pushing down carbon emissions. Be’ah has set a target to slash 80% of Oman’s waste by 2030.

GREEN HYDROGEN-

Masdar joins hydrogen business network as steering member: UAE’s renewable energy giant Masdar is joining global CEO-led private sector initiative The Hydrogen Council as steering member, according to a statement. The Council — established in 2017 at the World Economic Forum in Davos — provides guidance on how to accelerate the roll-out of low-carbon hydrogen around the world and acts as a business marketplace, bringing together a group of more than 140 companies based in 20 countries across the entire hydrogen value chain, including large multinationals, innovative SMEs, and investors. Today, the Council’s membership represents some USD 8.2 tn in market capitalization and some USD 5.2 tn in revenues.

UK backs a moratorium on deep-sea mining: The UK is backing a temporary suspension on supporting any licenses to exploit and mine deep-sea minerals until the environmental impact is better understood, The Guardian reports. This comes on the back of criticism from scientists and environmentalists over the country's previous support for the practice.

REMEMBER- The UN’s International Seabed Authority said it would begin accepting permit applications from corporations looking to launch deep-sea mining projects last July following two weeks of negotiations on standards and requirements of the new practice. A notable sticking point in the decision is the lack of a standard mining code that would guide ISA in its application reviewing process.

Why this matters: The growing industry aims to extract critical minerals essential to EV battery production including cobalt, copper, nickel, and manganese. However, scientists say it comes at the expense of a substantial impact on the environment including the destruction of natural habitats and the USD 5.5 bn tuna industry, in addition to creating sediment plumes that disrupt aquatic life and the ocean’s ability to capture and sequester CO2.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• France is the EU’s top “carbon bomb” supporter: French banking groups have shelled out USD 154 bn since the 2015 Paris Agreement toward financing the world’s 425 largest fossil fuel extraction projects — also known as carbon bombs — with the country's top banking groups BNP Paribas, BPCE Group, Crédit Agricole, and Société Générale investing some USD 17.8 bn in big oil last year alone. (The Guardian)
• Canadian Solar is building a plant in the US: Solar panel manufacturer Canadian Solar says it is investing USD 800 mn to build a solar cell plant in Indiana. The plant will have a capacity of 5 GW annually, producing 20k high-power modules daily. The cells manufactured at the facility will be used at the company's 5 GW module assembly plant in Texas. (Reuters)

UK researchers develop a new mechanism for measuring biodiversity: Two researchers from UK nonprofit Bristol Avon Rivers Trust (Bart) have carried out an experiment to analyze how environmental DNA (eDNA) tracing can help map out local aquatic species, Bloomberg writes. The team absorb water samples with a syringe and send them to a lab to assess the eDNA instead of using what some might call inhumane methods of electrocution before returning live animals to water.

The team’s approach: The team believes that, similar to human DNA fingerprinting, animals leave DNA traces wherever they roam. Their DNA tracing method can tie animal species to where they recently migrated, offer clues on the arrival of invasive species to a new location, and demonstrate the longevity of species that were once thought to be extinct, Bloomberg notes. Nestlé SA, Vale SA, EDF Renewables, are among corporations experimenting with the approach to boost biodiversity protection in line with their ESG strategies, Bloomberg notes.

Why does this matter? Freshwater populations declined by an average of 83% since 1970, and back at the United Nations summit in Montreal, 196 countries signed a once-in- a-decade pact to protect 30% of the planet’s oceans and lands by 2030. The economic toll of biodiversity collapse in certain ecosystems could total some USD 2.7 bn annually by 2030, according to a World Bank study. In our neck of the woods, Abu Dhabi — which published a fishery survey back in 2019 after two years of study — says the new eDNA testing equipments’ efficacy can help them publish their next survey “immediately,” Bloomberg quotes UN Climate Change High-Level champion for COP28 Razan Mubarak as saying.

Greenwashing fears: Unlike greenhouse gas emission measurements — which have a single metric — biodiversity measurements via the new eDNA approach are likely leave a loophole for corporate greenwashing with the absense of unified, regulated governmental frameworks, Bloomberg quotes Executive Director of the Green Finance Observatory Frédéric Hache as saying. “This is a very problematic reframing of conservation policies. Conservation is not a corporation’s role, it's the government's role. This is being promoted in order to claim that this is an alternative to government regulation,” Hache said. To help tackle the lack of governmental checks and balances, eDNA monitoring firm NatureMetrics has introduced the world’s first subscription service for “nature performance monitoring,” allowing clients to track changes in different ecosystems over time, Bloomberg notes.