TODAY: OPEC Fund raises USD 1 bn in maiden sustainability bond + Masdar confirms plan to issue maiden green bond in 2023
Good morning, friends. We have a finance-heavy (and altogether rather meaty( issue to kick off the week and some EV, decarbonization and sustainable aviation stories from the UAE and KSA. Let’s jump right in.
THE BIG CLIMATE STORY- The OPEC Fund has raised USD 1 bn from a three-year sustainability bond that will be used to finance or refinance sustainable development projects aligned with the fund’s goals, and UAE’s Masdar has confirmed plans to raise as much as USD 750 mn in a maiden green bond issuance in 2H 2023 to help finance its ambitious global expansion plans.
^^ We have chapter and verse on these stories and more in the news well, below.
THE BIG CLIMATE STORY OUTSIDE THE REGION- Environmentalists, trade unions call on Biden to remain steadfast on EV tax credit program in the face of EU opposition: US environmental groups and trade union representatives last week urged President Joe Biden to resist calls from the EU and other allies to amend EV tax incentives put forward under his Inflation Reduction Act (IRA). The IRA includes a consumer tax credit mechanism of up to USD 7.5k per vehicle on North American-made EVs, which allies have criticized for potentially driving clean energy investment into US industry, at the expense of other locations. US Trade Representative Katherine Tai previously noted that the Biden administration wants to avoid an EV subsidy race with Europe. The story is attracting some international coverage: Reuters | Bloomberg | Wall Street Journal.
PSA- Qatar-based SMEs working in clean energy can access low-interest loans from state-owned Qatar Development Bank, according to a statement. The scope of projects includes waste management and treatment, recycling, renewables, clean tech production, and carbon reduction.
PSA #2- Morocco’s senate has approved a bill for the self-production of electrical energy, according to a statement. The bill — unanimously approved by the House of Representatives last December — will allow citizens, SMEs, and large enterprises to generate their own electricity, particularly from renewable sources.
WATCH THIS SPACE #1- The UAE is exploring carbon trading: The UAE’s Securities and Commodities Authorities is in talks with the Climate Change and Environment Ministry and other stakeholders to develop a carbon trading initiative in an effort to offset the country’s carbon footprint and reach net zero in 30 years, the National reports. This follows the UAE’s Abu Dhabi Global Market announcing plans in November to launch the “a fully regulated” voluntary carbon market in partnership with Singapore-based digital exchange AirCarbon.
WATCH THIS SPACE #2- French utility company Engie wants to expand in the GCC renewables market, country manager for the GCC and Pakistan Frederic Claux told the National last week. Renewables are a priority for the company as it currently eyes the 1.5 GW Al Ajban solar plant in Abu Dhabi and new wind project proposals in Saudi Arabia. Engie is also working on a 30 MW solar project with the KSA’s National Agricultural Development Company. Last January, Engie signed an agreement with Masdar and Fertiglobe to co-develop a green hydrogen facility in the UAE.
WATCH THIS SPACE #3- Acwa Power’s first green hydrogen plant will be up and running in 2026, CEO Paddy Padmanathan said on the sidelines of the World Economic Forum (WEF) in Davos, Al Arabiya reports. Once operational, the plant will produce 650 tons of green hydrogen per day, to be used as feedstock for green ammonia — of which some 1.15 mn tons will then be shipped to Europe and Southeast Asia, Padmanathan added. We assume Padmanathan is referring to Acwa’s NEOM green hydrogen plant, though Al Arabiya doesn’t specify this.
CLIMATE DIPLOMACY- European Investment Bank President Werner Hoyer met Egypt’s International Cooperation Minister Rania Al Mashat at Davos to discuss next steps in the lender’s role as “main development partner” for the Egyptian government’s landmark Nexus on Water, Food and Energy (NWFE) climate program, according to a cabinet statement. The pair touched on subsequent collaborations in the fields of sustainable green industries, the enhancement of food security, and mobilizing more support for the NWFE platform.
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SIGN OF THE TIMES- The narrative around ESG investing has become riddled with personal attacks and the problems “demonized,” BlackRock CEO Larry Fink told Bloomberg TV at the WEF (watch, runtime: 18:56). BlackRock — which had some USD 8.59 tn in assets under management at the end of 2022 — has become a “political punching bag” for both right- and left-leaning forces when it comes to the issue of ESG investing, Bloomberg argues. While some say that its policies negatively impact the fossil fuel industry to the detriment of the economy, others believe it isn't going far enough to address climate change, the outlet adds.