TODAY: Maersk is reportedly looking to acquire Egypt’s Zafarana wind farm

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Monday, 17 July 2023

TODAY: Maersk is reportedly looking to acquire Egypt’s Zafarana wind farm

Good morning, wonderful people. It’s a very busy morning in the region with climate updates across all parts of the industry. Shall we?

THE BIG CLIMATE STORIES- The Egyptian government has received an offer from Denmark's global shipping bellwether Maersk for the acquisition of the state-owned 545 MW Zafarana wind farm, less than a week after UK private equity giant Actis threw its hat in the ring to acquire the Gabal El Zeit wind farm. Also, Saudi renewables developer Acwa Power has signed financing agreements for the SAR 8.3 bn (USD 2.2 bn) Al Shuaibah 1 and Al Shuaibah 2 solar PV projects.

^^ We have more details on these stories and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- A push to revive stalled US-China climate talks: US Climate Envoy John Kerry arrived China yesterday for a three-day visit that aims to restart climate talks between the world’s top greenhouse gas emitters despite a diplomatic row over other issues, including trade disputes and military tensions. Kerry said he is looking for “candid conversations” with Chinese officials and progress in slashing potent greenhouse gas methane and accelerating a transition away from coal and a faster deployment of renewable energy.

ALSO- A deadly flooding in South Korea has left dozens dead: Authorities said rescuers were able yesterday to retrieve the bodies of eight people who were trapped in a flooded road tunnel after days of heavy rain caused flash floods and landslides and destroyed houses nationwide. The heavy downpour this year comes despite the country’s promise to raise readiness against torrential rains after Seoul saw last year floods caused by heaviest rain in 115 years.

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OVER IN COPLAND- We finally have some of the big items on the COP28 agenda: COP28 President Designate Sultan Al Jaber has unveiled the action plan for COP28, which includes among its major goals deploying an operational fund to compensate climate-vulnerable poor nations, Bloomberg reported on Thursday. In a climate-focused meeting in Brussels co-hosted by the European Commission, Al Jaber said delegates should outline targets to triple renewables capacity and double hydrogen production by 2030. He said a phasedown of fossil fuels was “inevitable” and “essential,” adding that companies must “attack all emissions” including Scopes 1, 2, and 3, which focus on direct and indirect emissions.

Some are singing the same tune: Several countries led by Germany and Canada have called on the UAE to focus on the phaseout of all unabated fossil fuels, The Financial Times reported on Thursday. They warned that the world was seeing “catastrophic human, environmental and economic losses” without an urgent intervention. “In the face of killer heatwaves, raging wildfires and torrential floods, we must all do more, faster to mitigate and adapt to the climate crisis,” the environment ministers said in their letter. They said a landmark loss and damage fund agreed in COP27 last year in Egypt needs to be up and running, they said.

Not everyone is on board just yet: “There’s a large number of other countries that are not yet on board,” COP28 Director-General Majid Al Suwaidi told Bloomberg. “There’s a lot of debate over whether a timeline is useful, or even realistic,” Al Suwaidi added. His statements come amid concerns of a lack of consensus on a phaseout of fossil fuels at COP28 after top oil producers like Saudi Arabia blocked the effort at COP27 last year.

Everyone will be feeling the pressure: Countries participating in COP28 this year must face how they’re falling behind climate change targets and agree on a plan to get on course, Reuters quotes Al Jaber as saying. “We must be brutally honest about the gaps that need to be filled, the root causes and how we got to this place here today,” he told the event in Brussels. “Then we must apply a far-reaching, forward-looking, action-oriented and comprehensive response to address these gaps practically.”

ALSO- Climate reparations is a big no for the US: The US will not pay climate reparations to developing nations impacted by climate-driven disasters, Reuters reported on Thursday, citing statements by US Special Envoy on Climate Change John Kerry. “No, under no circumstances,” he said during a hearing on the US State Department's climate agenda. The US is among one of the main backers of the loss and damage fund, which does not yet have a mechanism on who should be paying into the fund or how funds would be disbursed to developing countries.

And another big no: Abatement technologies that include carbon capture and storage (CCS) should not replace necessary fossil fuel cuts, the EU and several countries said in a statement seen by Reuters. “Abatement technologies must not be used to green-light continued fossil fuel expansion,” said the statement by the EU and 17 countries including Germany, France, and climate-vulnerable island states. They said that such technologies “must be considered in the context of steps to phase out fossil fuel use, and should be recognised as having a minimal role to play in the decarbonization of the energy sector.”

WATCH THIS SPACE #1- KSA will reportedly sign a joint investment agreement with Japan to develop minerals critical to the energy transition, Reuters reported on Saturday, citing Japanese financial newspaper Nikkei. The agreement will be signed during Prime Minister Fumio Kishida's visit to the region, which officially kicked off yesterday. Japan also plans to support Saudi Arabia’s development of copper, iron and zinc — minerals that are essential for EV and battery storage production. Partnerships to exchange technologies needed for the energy transition will also be discussed during Kishida’s visit, a senior Japanese Foreign Ministry official told reporters last week. Other potential investments in mining will be discussed during a roundtable discussion between the two countries, Asharq Al Awsat reported.

REMEMBER- KSA is betting big on critical mineral exploration: The kingdom is looking to unlock an estimated USD 1.3 tn in mineral reserves and aims to become a global hub for metals and minerals needed in the energy transition. It says it also has large untapped reserves of metals — including copper, zinc, phosphate, and gold — and it plans to attract some USD 32 bn in investments in its mining and mineral sector and award more than a dozen mining exploration licenses to international investors.

WATCH THIS SPACE #2- Iraq is close to selecting a developer for a new 700 MW solar energy project, Iraq’s Electricity Minister Ziad Ali Fadel told Baghdad Today on Thursday. He said the government plans to approve the contract tomorrow, without providing details about the project or the company that will be awarded the project. Fadel said the last contract awarded by Iraq was for the 750 MW solar plant with PowerChina last month.

REMEMBER– Iraq has a 2023 renewables plan: Iraq wants to produce 5 GW of solar power in 2023. The country signed solar power agreements over the past two years with several companies, lining up a total generation capacity of 7.5 GW.

WATCH THIS SPACE #3- Egypt’s NWFE is getting love from the EIB: The European Investment Bank (EIB) plans to commit EUR 4 bn in funding for development projects in Egypt until 2030 under the government’s flagship Nexus for Water, Food and Energy (NWFE) climate adaptation program, International Cooperation Minister Rania Al Mashat said last week in a virtual speech at the EIB MED Conference. She did not provide details about the projects that could be benefiting from these funds.

About NWFE: The Egyptian International Cooperation Ministry’s program aims to raise blended finance for nine climate adaptation and renewables projects worth a combined USD 15 bn. These include a massive energy project worth US 10 bn, five projects in agriculture and food security, and three in irrigation and water resources. The program was launched ahead of last year’s COP27 climate summit and has been garnering support since.

Other backers: The African Development Bank (AfDB) said earlier this year that it has mobilized USD 2.2 bn to improve Egypt’s water security under the program. The European Bank for Reconstruction and Development — the lead partner on NWFE’s energy pillar — has allocated USD 200-300 mn to the energy track of the program. The International Fund for Agricultural Development (IFAD) is committing USD 200 mn to the food track, while a number of other organizations partnering with IFAD are providing another USD 775 mn.

WATCH THIS SPACE #4- IDB extends funds to Irena’s accelerator platform: The Inter-American Development Bank (IDB) has committed USD 100 mn to the International Renewable Energy Agency’s Energy Transition Accelerator Financing platform (ETAF), according to a statement released last week. IDB’s funding package will be geared toward financing renewables projects in Latin America and the Caribbean. ETAF — supported by the UAE government — has already surpassed its initial target of amassing USD 1 bn by 2030 by some USD 250 mn, Irena notes.

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THE DANGER ZONE An alert on critical minerals’ vulnerability amid geopolitical risks: Critical mineral supply chains remain vulnerable to geopolitical risks leading to a potential disruption of supply could affect the speed of energy transition, he International Renewable Energy Agency (Irena) said in a report (pdf) released last week. The industry is seeing multiple supply risks, including a geographical concentration of mining and processing activities in some countries like Australia, Chile, DRC, Indonesia, and South Africa, according to the report. Also, the world’s top five mining companies control 61% of lithium and 65% of cobalt output, it said. It added that external shocks, resource nationalism, export restrictions, and mineral cartels could augment supply shortages risks.

REMEMBER- Copper, cobalt, nickel, and lithium — critical minerals for EV and battery storage production — are expected to see a massive jump in demand in the coming years as countries roll out their plans for energy transition.

CIRCLE YOUR CALENDAR-

Egypt will host the Egypt Mining Forum from tomorrow to Wednesday 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.

The UAE will host the International Conference on Solar Power Technology from Saturday, 22 July to Sunday, 23 July in Dubai. The conference will bring together industry leaders as well as academics and researchers to discuss trends and innovations in the solar energy production sector.

The UK will host the London Hydrogen-Africa Green H2 Investment Forum from Tuesday, 25 July to Wednesday 26 July in London. The event will gather green hydrogen developers, investors, and policy makers to discuss challenges, regulatory frameworks, and investments in Africa’s green hydrogen market.

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