TODAY: Mubadala’s blockbuster debut green bond issuance is here + Acwa Power hits a homerun at Davos in the Desert
Good morning, wonderful people. It’s a moderately busy start to the week and we have a compact issue for you with updates from around the region.
THE BIG CLIMATE STORIES- UAE sovereign fund Mubadala has issued a USD 750 mn green bond with an order book surpassing USD 6 bn leading to a whopping 9.1x subscription rate and Acwa Power has signed agreements worth USD 746 mn at Davos in the Desert — also known as the Future Investment Initiative — in a bid to pave the company’s expansion into Central Asia and help finance GCC projects.
^^ We have the details on these stories and more in the news well, below.
THE BIG CLIMATE STORY OUTSIDE THE REGION- There was no single story dominating headlines over the weekend, but there was one story with some repercussions for our industry. Global carbon offsets firm South Pole has terminated its work in one of the world’s largest forest conservation and carbon credit schemes, Zimbabwe’s Kariba REDD+. South Pole said that the project — which aims to prevent deforestation around Lake Kariba — has failed to meet the standards it expected from its partners, citing concerns with the project’s management. Kariba REDD+ is owned and developed by Carbon Green Investments (CGI), which now bears the responsibility for the 36 mn credits sold since 2011.
South Pole’s withdrawal was a long time coming: In March, several outside experts and South Pole’s own analysis found that the firm — and therefore its clients who bought Kariba credits — ended up vastly overestimating the extent of the preservation by Kariba, Bloomberg reported at the time. South Pole said the credits were legitimate and would still benefit the climate despite the studies concluding that the project failed to generate enough real atmospheric benefit.
REMEMBER- Will the UAE’s Blue Carbon rethink its big plans in Zimbabwe? Dubai-based offsetting company Blue Carbon signed an MoU with Zimbabwe earlier this month worth USD 1.5 bn to finance forest protection and rehabilitation projects to generate tradable carbon credits. In the meantime, companies who are buying carbon credits, including Apple, are being questioned on whether their purchased offsets are actually effective in canceling out greenhouse gas emissions in the long run.
The news got coverage from Reuters and Bloomberg over the weekend.
OVER IN COPLAND- India likely to skip cooling pledge at COP28: India is not likely to sign the Global cooling pledge to reduce emissions during COP28, Reuters reported on Friday, citing two government officials with knowledge of the matter. The pledge — developed by the United Nations Environment Programme’s Cool Coalition and the UAE — requires cutting cooling-related CO2 emissions by 68% by 2050 and would require big investments to decarbonize the sector. India and China are considered key to the success of the pledge as two of the world’s major emitters with a combined population of over 2.9 bn. India’s official decision is still being considered, the officials added. COP28 President Designate Sultan Al Jaber called on nations to join the pledge in July to deliver more sustainable cooling solutions globally.
COP28 Presidency and AIIB collaborate to accelerate energy transition: The Asian Infrastructure Investment Bank (AIIB) and the COP28 Presidency will collaborate on mobilizing climate investment capital and accelerating clean energy investments in Asia, according to a statement released last week. The partnership will see the COP28 Presidency and AIIB establish financial structures to increase the mobilization of private and institutional capital, including a blended finance structure to drive capital into green projects. AIIB and the COP28 presidency had signed a letter of intent earlier this month to solidify COP’s commitment to scaling climate finance with the bank’s support.
WATCH THIS SPACE #1- Ford slows down EV manufacturing investments: US automobile giant Ford is postponing about USD 12 bn in earmarked investments on its new EV manufacturing capacity due to a slump in demand, CNBC reported on Thursday, citing a media briefing by Ford CFO John Lawler. Lawler explained that many customers in North America are no longer willing to pay a premium for an EV over an internal-combustion or hybrid alternative. While the industry’s sales of EVs are growing, they aren’t growing at the pace Ford had expected, the news outlet said. Lawler stressed, however, that the automaker isn’t stopping its EV production goals, but has rather revised the pace of its rollout.
The numbers behind the decision: Ford said on Thursday that its EV business unit, called Ford Model e, lost USD 1.3 bn on an operating basis in 3Q, roughly double its loss a year ago, despite a 26% increase in revenue, according to the CNBC article.
REMEMBER- Concern is growing over high interest rates derailing the ambitions of climate regulators and big auto to accelerate the shift to EVs, especially as demand is falling short of investors’ expectations. Honda and General Motors also said they were axing a USD 5 bn plan to develop lower-cost EVs together just one year after launching the effort.
WATCH THIS SPACE #2- KSA’s Ma’aden is working on aquatic lithium extraction: Saudi state-owned mining company Ma’aden is launching a pilot project to extract lithium from seawater in a bid to support KSA’s clean energy transition and green mobility ambitions, CEO Robert Wilt told Reuters in an interview last week. The investment ticket and a timeline for the project were not disclosed. Oceanic lithium extraction is a months-long process that involves the application of chemical reagents to absorb, desorb, and crystallize lithium found in brine.
Staying out of the West-China mining race: The company intends to stay above the fray critical mining race between the US and China and do “what’s best for the kingdom,” Wilt added. “We have de-risked our portfolio in terms of broadening exploration and working external to the kingdom to make sure we are resilient no matter what happens geopolitically,” he said. KSA plans to award over a dozen mining exploration licenses to international investors and attract some USD 32 bn in investment in its mining and mineral sector. In September, it awarded a license for the exploration of a mine with copper reserves worth an estimated USD 222 bn. Ultimately, the kingdom is looking to unlock an estimated USD 1.3 tn in mineral reserves.
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CIRCLE YOUR CALENDAR-
The United Kingdom will host The Financial Times’ Energy Transition Summit from 31 October to Thursday, 2 November in London. The summit will bring together senior leaders from the energy industry, as well as business and finance executives operating in carbon intensive sectors, to explore how to boost the energy transition while navigating today’s geopolitical, technological, and financial challenges. The summit will include panel discussions, keynote interviews and debates moderated by FT and industry experts.
The UAE will host the Forbes Middle East Sustainability Leaders Summit from Wednesday, 1 November to Friday, 3 November in Abu Dhabi. The summit will gather international leaders in sustainability, technology, finance, and policy to drive green strategies globally. The agenda includes sessions on climate-smart cities, green mobility, sustainable finance, and sustainable tourism. The summit is expected to set the tone for international and regional dialogue and decision-making, including COP28 which will kick off in late November.
Turkey will host the GCC-Türkiye Economic Forum from Saturday 11 November to Monday, 13 November in Istanbul. The forum aims to bring together key ministers and state officials from the Gulf countries and Turkey to explore areas of potential investments and commercial ties and to establish a network for joint projects in the energy, defense, banking, retail, and transportation sectors. The event is organized by the Gulf Research Center and Turkey’s International Cooperation Platform.
The UAE will host the MENA Solar Conference from Wednesday, 15 November to Saturday, 18 November in Dubai. The event will focus on all things photovoltaic, with a full programme on PV materials and devices, future technologies, PV reliability, and forecasting for performance assessment. The conference will also touch on how developments in system operations, concentrated solar power, and grid integration are necessary for the green transition. This will be the first scientific and technical conference specializing in solar energy systems in the region.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.