TODAY: Egypt’s CIB will receive USD 100 mn from IFC to boost climate financing
Good morning, nice people. We have a busy morning to dive into with climate updates across the region and in all sectors of the industry.
THE BIG CLIMATE STORIES- Egypt’s largest private lender CIB will receive a USD 100 mn loan from the World Bank’s private investment arm the International Finance Corporation to help finance the bank’s climate finance business and Taqa Arabia began trading on Egypt’s bourse yesterday after getting the green light from the EGX’s listing committee.
^^ We have the details on these stories and much more in the news well, below.
THE BIG CLIMATE STORY OUTSIDE THE REGION- A shot in the arm for shipping industry emission cuts: Member countries of the International Maritime Organization (IMO) gave the green light to a revised greenhouse gas strategy that outlines a net zero emissions goal for the shipping industry by mid century. They agreed following talks by the UN shipping agency over last week to reach net zero “by or around, i.e., close to 2050, taking into account different national circumstances.” They also approved “indicative checkpoints” to help lower total annual greenhouse gas emissions from the global shipping industry by at least 20% while aiming for 30% by 2030 compared with 2008 levels. They also seek reducing such emissions by at least 70%, while striving for 80% by 2040.
No sign of the contentious levy: A proposed global levy on shipping emissions was not included in the IMO strategy’s text, which did say that several “GHG reduction measures” that include “an economic element” should be finalized and approved by 2025.
The story got widespread coverage over the weekend: Reuters | Bloomberg | The Guardian | The Financial Times | The Associated Press | CNN | The Washington Post | The New York Times
MARK YOUR CALENDARS- The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.
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OVER IN COPLAND- COP28’s Al Jaber wants Big Oil to up its game: COP28 President-Designate Sultan Al Jaber has urged the world’s oil and gas industry to “up its game” towards clean energy solutions, Wam reported on Thursday. During the OPEC International Seminar in Vienna, he reiterated an earlier call for the industry to “urgently decarbonise its operations and take collective action to eliminate operational emissions” through three imperatives. These are achieving net-zero by 2050, advancing pledges to phase out methane emissions, and monitoring progress along the plan. “Today I would like to add a fourth imperative … allocating capital at scale to clean energy solutions, because the energy system of the future will not build itself,” Al Jaber said.
Doubling down on fossil fuel phaseout comments: “The phase down of fossil fuels is inevitable. It is in fact essential. But it cannot be irresponsible,” Al Jaber told delegates, stressing that the “speed of the transition will be driven by how quickly we phase up zero carbon alternatives.”
IN OTHER COP28 NEWS- Al Jaber also met with Pakistan’s Federal Minister for Climate Change and Environment Sherry Rehman in Pakistan to discuss the importance of a “global reset that enhances support for developing countries on the frontline of climate change” during the upcoming summit, COP28 said on Thursday.
The UAE could be on the lookout for investments in Pakistan’s renewables: The UAE is interested in investment opportunities in Pakistan's renewable energy sector, Pakistani daily Business Recorder reported, citing statements by Al Jaber during his meeting with Rehman. “Whether it is in the conventional energy or in the alternative energy space, we are very keen to work with Pakistan in the renewable energy sector, and apply scale and capital in advancing renewable energy assets,” he said.
WATCH THIS SPACE #1- Banks not following EU’s lead in nuclear green energy label: None of the world’s top 30 banks have included nuclear energy in their criteria for issuing green or sustainability-linked bonds, Reuters reported on Thursday, citing analysis by Columbia University’s Center on Global Energy Policy. According to the analysis, 17 banks have explicitly kept out nuclear energy from their green financing frameworks, 12 do not mention nuclear energy, and one does not have a framework.
The shunning of nuclear energy comes despite the EU deciding last year to add nuclear power plants to the list of investments that are considered green. The report comes days after a European Parliament committee backed the bloc’s renewable energy targets, yet criticized last-minute tweaks granting France and other nations exceptions regarding the recognition of nuclear energy. The law, which would still require full approval from the EU Parliament and EU countries, was deadlocked for weeks due to a pushback from France and others demanding carve-outs for non-renewable fuels.
And ESG reporting rules need tightening: Some 100 European asset managers are urging the EU to revise planned ESG reporting rules amid concerns that the current proposal doesn’t provide necessary data for filled in decisions, Bloomberg reported on Thursday. The European Sustainable Investment Forum (Eurosif) said the current proposal leaves companies and advisers “to determine what is, and isn’t, material to report.” Such rules could lead to a decline in the data that investors get, it argued. Instead, they want the EC to oblige companies to report several ESG indicators including climate data, so investors can avoid greenwashing. Once consultation over the planned ESG reporting rules is submitted, the proposal makes its way to the European Parliament and then the EU Council. Implementation is set for 2024 with first corporate reports due in 2025.
IN EU EMISSIONS NEWS- The European Commission (EC) is set to propose measures aimed at lowering emissions from freight transport tomorrow, Bloomberg reported on Thursday, citing a draft document it has seen. The measures include reducing red tape, coordinating international rail traffic, and using digital technologies. “Unnecessary regulatory obstacles continue to undermine the efficiency of European freight, limiting the scope for emissions reductions,” the document read. Freight transport accounts for over 30% of carbon dioxide emissions in the transportation sector, according to the document. The sector is expected to grow by 25% by the end of the decade from 2015 levels and 50% by 2050.
And aluminum producers have their feathers ruffled: EU aluminum producers are worried that an escape clause in the EU’s carbon border tax could help heavily polluting exporters like China sidestep the rules and export cheap and emissions heavy aluminum, The Financial Times reports. Under the proposed rules, a levy is imposed on the amount of carbon emissions produced during the manufacture of goods imported into the EU but doesn’t impose a ban on scraps of the metal being sold as a zero carbon product, even if they’re originally produced using coal or other fossil fuels. This loophole could encourage non-EU producers to import scrap to Europe after remelting, aluminum companies including Norsk Hydro and Speira warned. “This loophole enables the widespread greenwashing of imported aluminum products and undermines the effectiveness of the Carbon Border Adjustment Mechanism in preventing carbon leakage,” Norsk Hydro’s chief executive Hilde Merete Aasheim said.
WATCH THIS SPACE #2- Some progress for Egypt-KSA electricity interconnector: Construction on the USD 1.8 bn Egypt-Saudi electricity interconnection project is 20% complete, Egypt’s Electricity Minister Mohamed Shaker told Youm7 last week, adding that the 3 GW project will begin operation in 2025. The first 1.5 GW phase will go live in June 2025, followed by the second and final 1.5 GW phase in November of the same year.
About the project: The Egypt-Saudi electricity interconnection project will be home to HVDC conversion stations including two stations in Saudi Arabia’s Medina and Tabuk and another in Badr city, east of Cairo. It will flow power along a 1.35k km route through overhead power lines and a 22 km subsea cable in the Red Sea.
IN OTHER KSA NEWS- Saudi oil giant Aramco has reconfirmed plans to produce 11 mn tons of blue hydrogen annually by 2030, Aramco CEO Amin Al Nasser told Sky News Arabia last week, dispelling earlier reports that the company was backtracking on its planned hydrogen investments. The clean energy source would not be a near-term cost-effective power source, however, according to Nasser, who said in May that blue hydrogen would cost the equivalent of USD 250 a barrel of oil. Inadequate hydrogen production infrastructure and ammonia cracking technologies also render hydrogen a more long-term energy source, Nasser told Sky News.
Aramco had big blue plans: The company said it was earmarking “multiple bns of USD” in a bid to establish itself as a major blue hydrogen exporter last November. In March, the company signed a cooperation agreement with British chemicals company Linde to jointly develop ammonia cracking technology and establish a demonstration facility in northern Germany. The company is also one of several energy firms mulling the establishment of a large-scale ammonia cracking plant at the Port of Rotterdam. In March, the Saudi oil giant and Sabic Agri-Nutrients shipped 25k tons of low-carbon blue ammonia to South Korea’s Lotte Fine Chemical.
WATCH THIS SPACE #3- The first phase of Dubai’s mega WtE plant is coming online soon: The first two waste-to-energy (WtE) production lines of the newly inaugurated AED 4 bn (c. USD 1.1bn) 220 MW Dubai Waste Management Centre will kick off operations next month, according to a statement released last week. The two production lines are expected to generate some 80 MWh of clean energy by processing 2k tons of solid waste daily, according to an earlier statement. The 400k sqm plant — set to become fully operational by 1Q 2024 — will process and convert 2 mn tons of waste annually, providing clean electricity to power some 135k residential units. Once it comes online, HZI and BESIX will form a joint venture to operate and maintain the project under a 35-year agreement with Dubai Municipality, the statement notes.
WATCH THIS SPACE #4- Infinity Power is eyeing Kenyan green energy: Infinity Power — a JV between the UAE’s Masdar and Egyptian renewables player Infinity — is seeking local partners in Kenya’s green energy sector to capitalize on the African country’s renewable energy potential, Deputy CEO Ahmed Mulla told Capital Business in an interview last week. “We plan to grow and growth is not driven by our ambitions to be the largest but also to serve. We are here to serve the continent. We are here to serve the people of Kenya. We can only do that with the support of the government,” Mulla said, without providing details on the kind of partnership that Infinity Power is seeking. He said that the East African country is one of the most attractive markets in Africa to set up green energy reserves, adding that his company is on the lookout for local companies with a strong outlook and track record of delivery. Mulla’s statements came days before a Kenyan delegation led by Cabinet Secretary for the Ministry of Investments, Trade and Industry Moses Kuria visited Masdar HQ for talks, the company said on Friday.
DATA POINT- Developing nations are in need of renewable energy investments of c. USD 1.7 tn annually, more than triple the amount they received last year, the United Nations Conference on Trade and Development (UNCTAD) said in its recent World Investment Report. UNCTAD said that developing countries only saw USD 544 bn in clear energy foreign direct investments last year. It said that although investments in renewable energy have nearly tripled since 2015, most of these investments were directed to developed countries. “A significant increase in investment in sustainable energy systems in developing countries is crucial for the world to reach climate goals by 2030,” UNCTAD Secretary General Rebeca Grynspan said.
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THE DANGER ZONE- The world’s hottest week on record is ringing the alarm bell: UN Secretary General António Guterres warned that “climate change is out of control” as unofficial data showed the world hitting its hottest week on record last week, The Guardian reported on Friday. “If we persist in delaying key measures that are needed, I think we are moving into a catastrophic situation, as the last two records in temperature demonstrates,” Guterres said. His statements come as the average global air temperature recorded 17.18°C on Tuesday, surpassing the record 17.01°C a day earlier, according to data by the UN National Centers for Environmental Prediction (NCEP). The daily average temperature for the seven-day period ending on Wednesday was estimated at 0.04°C higher than any week in the 44 years of record-keeping, according to the University of Maine’s Climate Reanalyzer data.
El Niño’s comeback is bad news: The UN’s weather agency warned last week that the return of the naturally occurring El Niño weather pattern could pave the way for a surge in global temperatures as greenhouse gas emissions rise. “The onset of El Niño will greatly increase the likelihood of breaking temperature records and triggering more extreme heat in many parts of the world and in the ocean,” World Meteorological Organization Petteri Secretary General Taalas said.
CIRCLE YOUR CALENDAR-
Thailand will host the second workshop on addressing loss and damage from Saturday, 15 July to Sunday, 16 July in Bangkok. The workshop will see discussions on pathways to increasing funding for climate-induced loss and damage. The workshop is being held in preparation for the third meeting of the COP27 Transitional Committee in August. The committee is tasked with operationalizing the Loss and Damage Fund, to be approved during the fourth transitional meeting in October.
Egypt will host the Egypt Mining Forum from Tuesday, 18 July to Wednesday, 19 July in Cairo. The event — organized by the country’s Oil Ministry — will gather regional players as well as global mining firms in a bid to attract regional and foreign direct investments in the country’s mining industry.
Check out our full calendar on the web for a comprehensive listing of upcoming news events and news triggers.