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Thursday, 27 October 2022

All the green hype at Davos in the Desert

Saudi Aramco launched a USD 1.5 bn sustainability fund at the Future Investment Initiative (FII), the company said in a statement yesterday. The fund, managed by Aramco Ventures, will invest in technology needed to support the green energy transition as part of its bid hit net zero by 2050. It will target global investments, initially focusing on carbon capture and storage, greenhouse gas emissions, energy efficiency, nature-based climate solutions, digital sustainability, hydrogen, ammonia, and synthetic fuels.

Will we see some of that cash deployed in MENA investments? Some of it, yes. Big GCC players have been on a shopping spree, snapping up green assets in the west, as we previously reported (here and here). Aramco’s fund is looking to develop both local and global technology, with a focus on carbon capture and green hydrogen, Aramco’s CEO Amin Nasser said at FII.

(Also: That shopping spree continues, as we note below, in our coverage of the latest acquisition by Abdul Latif Jameel’s FRV.)


PIF’s new carbon market company auctioned 1.4 mn tons of carbon credits: The new regional voluntary carbon market company set up by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), auctioned 1.4 mn tons of carbon credits at FII. Saudi Aramco, Olayan Financing, and Ma’aden purchased the largest number of carbon credits in the auction, with 12 other Saudi and regional companies participating. PIF had originally announced that 1 mn credits — including CORSIA-compliant, Verra-registered certificates — would be up for grabs, but sold a higher-than-anticipated number of carbon credits. We still don’t have any information about pricing.


Greece is eyeing green hydrogen imports from Saudi’s Neom, with plans to lay a cable connecting Saudi to Europe, Greece’s Minister of Investment and Development Adonis Georgiadi said at the FII (watch, runtime: 00:27). The cable will allow Greece to act as an energy hub for Europe, Georgiadi said. The two sides will sign an MoU once the details of the agreement have been finalized.

SOUND SMART- Greece is looking to emerge as a new EU energy player, working with Egypt on a 9.5 GW green energy project and working with Egypt and Libya on hydrocarbon exploration.

NEOM’s USD 5 bn Green Hydrogen Project promises to be the world’s largest utility scale green hydrogen facility, producing 650 tons of hydrogen daily. The project is a joint venture between NEOM, Air Products and ACWA Power, and is expected to be commissioned in 2026.


Indonesia is looking at working with Saudi Arabia to boost EV production, Indonesian Chamber of Commerce Chairman Arsjat Rashid said at FII, according to Arab News. The southeast Asian country supplies over 40% of the world’s nickel — a key component of the lithium-ion batteries used in EV production, it adds. Saudi Arabia “with its capital and technology” and Indonesia could work together, especially given current shifting global supply chains, Rashid added.


Saudi could become the world’s largest producer of green energy, Tadawul-listed Acwa Power Chairman Mohammed Abunayyan said in a session at FII, Arab News reports. Public-private partnerships (PPPs) could help spur innovation and support the financial structuring of renewables projects boosting renewable energy production, Abunayyan said. In addition to green hydrogen exports, the kingdom will localize the renewables value chain to provide green energy domestically, he added.

Molten salt tech can bypass fossil fuels: The method involves heating liquid salt then storing it in insulated containers. The energy can then be harnessed by using the heated liquid to power generators, bypassing the need for fossil fuels. Acwa Power started using this technology in 2014, Abunayyan said, but noted that the shift from conventional to renewable energy will take time.

The world needs 8x more PV panel manufacturing plants to meet growing energy demands, Acwa Power CEO Paddy Padmanathan said at FII, according to Asharq Green. The cost of building solar plants will increase over the next five to seven years as rising global inflation and interest rates drive up costs faster than technology and the production of components at scale put downward pressure on the price of new builds, Padamanthan previously said.

Altogether, the green transition could take 30 years, as the current plan is “flawed,” Aramco’s CEO said at FII, Reuters reports. Alternatives cannot meet growing energy needs alone, and a more realistic plan was needed to balance growth with sustainability, he said.

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