TODAY: Cloud wars + Afreximbank gets love from NEXI. ALSO- India’s reliance wants to build 20 GW of renewables.
Good morning, wonderful people. It’s issue #2 of Enterprise Climate, and the region is giving us plenty to work with: A regional battle over clouds (yes, you read that right), district cooling and heating tech supplanting traditional ACs, and China eyeing potentially massive GCC investments.
OUR TOP STORY TODAY- Just when we thought we were out, Egypt pulls us back in: Egypt’s solar industry has topped coverage today, with solar players urging the state to ease import restrictions on solar components. A possible solution? Chinese FDI. We have more in today’s Solar section, below.
THE BIG NEWS FROM THE REGION-
YOUR MORNING MUST-READ: MENA’s water wars have taken to the skies, the New York Times says, noting that countries in our neck of the woods are now locking horns over cloud seeding.
The catch: All of Iran’s assertions that other countries are stealing its water are unfounded, atmospheric scientists tell the Gray Lady: Clouds usually evaporate within two hours — not long enough for them to drift from the UAE to, say, Iran.
Wait, what’s cloud seeding? It’s a (not uncontroversial) process of pumping chemicals that bond with water vapor into clouds to try to force or enhance precipitation. Clouds can be seeded from ground stations, airplanes or, occasionally, rockets.
We’ve heard this all before: Iran has been accusing Israel and the UAE of tampering with clouds over its land mass for more than a decade. “European countries used special equipment to force clouds to dump our water on their continent,” then-Iranian president Mahmoud Ahmadinejad said back in 2011, claiming western nations were hatching plots to limit Iran’s water supply and cause drought.
Those fickle foreign fingers… “Iran’s climate changes are unnatural and result from foreign interference, through their research; Iranian scientific centers have reached this conclusion,” Iranian news agency ISNA quoted a military commander in the country’s Revolutionary Guards as saying back in 2018.
Just in time for the World Cup: Qatar’s circular economy is set to generate some USD 17 bn by 2030 for the Gulf country, according to the Investment Promotion Agency of Qatar (IPA). IPA notes that its circular economy will create 9k-19k jobs in Qatar by 2030 while serving as a magnet for green foreign direct investment.
CLIMATE DIPLOMACY- Japan’s NEXI inks decarbonization finance agreement with Afreximbank: Japan’s state-owned Nippon Export and Investment Insurance (NEXI) signed an MoU with the African Export-Import Bank (Afreximbank) to support investment, trade and decarbonization in Africa, NEXI announced in a statement yesterday. Among the key aims of the agreement: providing financial support to promote investment by Japanese companies in Africa and promoting information exchange in areas including decarbonization technologies and the energy transition, the statement noted.
NEXI wants to help fill the financing gap for green energy in Africa: Energy demand in Africa remains strong and infrastructure developments are needed as part of the growing green economy, said NEXI Structured and Trade Finance Insurance Department manager Yoji Akiyama in a joint Afreximbank-NEXI webinar held on Thursday. “The challenge is how to finance them.” NEXI plans to contribute to filling this finance gap with its ins. schemes, as well as by offering infrastructure bonds with banks and institutional investors, he added.
SOUND SMART– More and more consumers see energy efficiency as important, according to a recent survey (pdf) by digital automation and energy management company Schneider Electric. The study, which included 4k respondents from the US, France, Germany and Sweden, shows some 72% of consumers consider carbon footprint reduction to be a personal priority and 55% place importance on their homes attaining net zero emissions — though only 31% actually see this as achievable. We’d love to see a similar survey carried out in MENA…
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 at 4am CLT / 5am Riyadh / 6am UAE Monday through Friday 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.
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THE BIG CLIMATE STORIES OUTSIDE THE REGION-
#1- Biden’s climate + tax bill is paying off already: Honda and LG Energy have committed to building a USD 4.4 bn factory in the US that will produce lithium-ion batteries for electric vehicles, they announced in a joint statement yesterday. The factory is expected to have an annual production capacity of 40 GWh a year and work will begin in early 2023. This comes less than two weeks after President Joe Biden signed his landmark climate bill into law, which provides incentives to overseas companies to onshore EV production. (Associated Press | Reuters | WSJ | CNN | FT | CNBC)
It’s big that a South Korean company has signed up: One of the main goals of the bill is to hinder the growth of Chinese companies and maintain US competitiveness in the high-tech sector. To achieve this, the legislation requires companies to cut their reliance on Chinese components and raw materials if they want to benefit from the full USD 7.5k tax credit. This has caused consternation among many South Korean companies, whose supply chains depend heavily on China and have few alternative options in the post-pandemic world of supply disruptions.
#2- India’s Reliance Industries wants to build 20 GW of solar energy generation capacity by 2025 and 100 GW by 2030, Chairman Mukesh Ambani announced during the company’s annual general meeting yesterday.
Reliance is also investing some USD 9.38 bn over five years to expand its oil-to-chemicals business, which among other things could serve as feedstock for green materials, Ambani said. Last year, a non-binding agreement for Saudi Aramco to buy a 20% stake in Reliance’s oil-to-chemicals business for USD 15 bn was called off — reportedly due to valuation concerns.
This marks a notable shift towards green energy for the Indian multinational, which also operates the world’s biggest refining complex. Reliance said last year that it was investing over USD 10 bn to build four giga factories that will produce solar cells and modules, energy storage batteries, fuel cells and green hydrogen infrastructure. “In addition to solar energy, we are also actively progressing on bio-energy, offshore wind and other non-conventional forms of renewable energy, and will continue to expand our manufacturing ecosystem,” Ambani said yesterday.
ALSO- Bloomberg has a stunning photo essay to accompany its piece headlined “the world’s rivers, canals and reservoirs are turning to dust.” The imagery spans from Colorado to China by way of Italy, France and the Netherlands and comes as Europe suffers through its worst drought in some 500 years.
THE DANGER ZONE-
Water disasters could leave the global economy with a 13-figure bill: Climate chaos affecting the world’s water resources could cost the global economy USD 5.6 tn between now and the middle of the century, according to a report out yesterday.
The biggest victim? The US, which stands to lose more than USD 3.7 tn in output (or 0.5% of GDP every year) over the next 28 years, mainly thanks to storms.
The UAE also gets a mention: Floods are going to cost the Emirati economy around USD 27 bn (0.1% of GDP) between now and 2050.
The cost of the floods in Pakistan? More than USD 10 bn, the country’s planning minister said yesterday, according to Reuters. Unprecedented monsoon downpours have caused severe floods across the country, killing at least 1k people and leading to the displacement of 33 mn people.
CIRCLE YOUR CALENDAR- Edge Innovation Forum is holding its Sustainability In Depth seminar on 30 August at Galleria40 in Cairo, Egypt. The seminar will focus on the role of government decisions in encouraging sustainable development and green financing.
The World Conference on Climate Change and Sustainability is taking place on 1-3 September in Frankfurt, Germany. The aim of the conference is to bring together “a range of key actors from institutions, governments, cities and communities, the private sector, and civil society, to make the world more climate-resilient,” the event’s organizers note. You can also attend the event online by registering here.
Execs from nearly 80 Russian companies are set to land in Tehran on 19 September to talk about business in fields including energy and recycling, according to the Iranian Chamber of Commerce.
A MENA youth climate innovation lab and Academy is set to run starting Friday, 16 September. Backed by Seedstars, the United Nations Climate Technology Centre and Network, and Denmark’s foreign ministry, the three-day event will spotlight climate tech developed by young folks from the MENA region. The deadline for applications is on 4 September; you can apply here.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.