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Good morning, folks. We have a steady stream of bits and pieces to delve into this morning as the weekend draws closer, with news emerging from PIF on a green bond tap issuance and an update on Egypt’s carbon market. First, some good news from the UK renewables market…
THE BIG CLIMATE STORY OUTSIDE THE REGION- The UK secures a record 131 renewable energy projects in latest auction: The UK has awarded 131 subsidy contracts in its latest renewable energy auction — the sixth of its kind — which will back nearly 10 GW of capacity. The projects, primarily offshore wind and solar, are enough to power 11 mn homes. Danish renewables developer Orsted and Spanish utility provider Iberdrola emerged as major winners. Orsted secured the largest contract by capacity at 70% of the traditional offshore capacity for its Hornsea 4 offshore wind project, while Iberdrola also snagged contracts for its East Anglia Two and East Anglia Three offshore wind projects.
REMEMBER- The wind sector has been calling for more support: The UK’s renewables industry wanted the Labour government to increase the country’s renewable auction budget after its 2023 auction failed to incentivize new wind projects. The budget of the government backed price guarantees — called Contracts for Difference — was GBP 1 bn with 800 mn earmarked for offshore wind, but was raised in July to GBP 1.5 bn after industry pressure. Around GBP 1.1 bn will be dedicated to offshore wind, with GBP 185 mn going to established technologies and GBP 270 mn channeled towards emerging technologies.
The story made headlines in the international press: Reuters | Bloomberg | Financial Times | The Guardian | BBC | France 24
WATCH THIS SPACE-
#1- Masdar’s secondary listing of its USD 1 bn green bond issuance is now live on the ADX, featuring two tranches worth USD 500 mn each — one with a five-year tenor and a 4.875% yield, and the other with a 10-year tenor and a 5.25% yield, the energy giant said.
Where’s the money going? The energy giant plans to invest the raised money “exclusively in new greenfield renewable energy projects under Masdar’s Green Finance Framework,” Masdar’s CFO, Mazin Kahn said. Kahn highlighted that Masdar is making progress on achieving an “equitable energy transition by increasing energy access in emerging markets and the Global South.”
REFRESHER- Masdar sold the green bonds in July, after booking USD 4.6 bn in orders with a 4.6x oversubscription rate. Some 70% of the allocation went to international investors, with the remainder going to MENA investors.
#2- Adia-backed Indian solar cell manufacturer Premier Energies saw its share price more than in its trading debut on the Bombay Stock Exchange, closing at INR 838.90 (AED 36.70) each, Live Mint reports. That’s an 86% jump from the offer price of INR 450 apiece. The company’s IPO drew INR 28.30 bn worth of overs as investors flocked to the share, generating a 74x oversubscription rate.
ICYMI- Adia invested INR 379.5 mn (AED 16.61 mn) in Premier Energies last month as an anchor investor ahead of its IPO, acquiring a 4.5% stake in the company. Adia acquired the shares at a share price of INR 450 (AED 19.7).
#3- Jordan launches feasibility studies exploring green hydrogen development: Jordan’s Energy and Mineral Resources Ministry signed an MoU with China’s CTGI Renewable Energy Partners to conduct feasibility studies to develop green hydrogen projects in the kingdom, Jordan News Agency reports. Under the agreement, the parties will explore the feasibility of developing a green hydrogen project with a capacity of 200k tons of green ammonia annually. The agreement marks the country’s 13th partnership in green hydrogen and ammonia production, according to Petra.
Jordan has big hydrogen plans: The ministry received the technical and economic studies for establishing a USD 1.6 bn green ammonia and hydrogen production plant in Aqaba in May. Depending on the outcomes of the study, the ministry will enter into a framework agreement followed by a final agreement to kickstart the project’s development.
WORTH READING-
Japan is struggling to keep up with Chinese EV competition: Japan’s government needs to increase support towards local companies — particularly in the automotive sector — to combat the growing influence of Chinese firms in Southeast Asia, Mitsubishi’s CEO Katsuya Nakanishi told The Financial Times in an interview. Japanese manufacturers are losing market share to Chinese companies, which could negatively impact Japan’s economy. A comprehensive government strategy is needed to counter China’s dominance in battery materials and EV sales, Nakanishi explains, while stressing the importance of state intervention in providing a competitive edge against China’s substantial financial support for its local companies.
Mitsubishi’s efforts alone aren’t enough: Mitsubishi — backed by Warren Buffett’s Berkshire Hathaway — is adapting its business model to reduce reliance on resource trading and focus more on investments. Despite Mitsubishi’s diversified portfolio, the company still faces challenges in proving its ability to execute its evolving strategy.
DANGER ZONE-
#1- North Africa has warmed at the most rapid pace out of all six African subregions over the past six decades, experiencing an increase of 0.4°C per decade, according to a new report (pdf) by the World Meteorological Organization (WMO). The region measured 0.84°C above the 1991 to 2020 average and 1.68°C above the 161 to 2002 average.
The North-West was the most impacted: North-Western Africa — particularly Morocco, coastal Mauritania, and North-West Algeria — recorded the highest temperature anomalies in 2023, the report found, noting that Morocco showed the most significant anomaly, with temperatures rising 1.25°C above the 1991 to 2020 average. North-West Africa also suffered from significant rainfall declines, particularly in Morocco, Algeria, Tunisia, and Western Libya, where deficits exceeded 150 mm last year.
Extreme heat waves swept across the region: North Africa saw record-breaking temperatures in July and August, including 49°C in Tunis, Tunisia, and 50.4°C in Agadir, Morocco. Multiple countries in North, East, and Central Africa experienced over 14 heatwave events, surpassing the climatological average of 10. These heat waves, along with drier conditions, heightened fire risks in North Africa, where wildfires in Algeria resulted in 44 deaths, the evacuation of over 1.5k people, and the destruction of 32k hectares of forest.
Agriculture + food security were put at risk: Cereal production in North Africa was estimated at 33 mn tons in 2023, about 10% below the five-year average. Tunisia saw the most significant decline on the back of the severe drought, with cereal output dropping 80% below the five-year average to 300 mn tons.
#2- Cleantech businesses are struggling to stay afloat or shuttering as they struggle to secure investments and grapple with high interest rates and delayed subsidies, according to the Financial Times. Big renewable energy companies Moxion — which had previously raised money from Amazon’s Climate Pledge Fund — and SunPower filed for bankruptcy this year along with two other companies, marking the highest rate since 2014, according to Bloomberg data. Residential solar company Lumio filed for bankruptcy yesterday and plans to be sold to its primary lender, Bloomberg reported.
Growth in competition: “[Cleantech] companies have struggled to grow revenues at margins that would chart a path to profitability,” Lux Capital’s Bilal Zuberi told the FT, adding that the complication led venture capitalists to pivot investments towards other sectors like AI, life sciences, and defense tech.
REMEMBER- Cleantech has been dealing with a “valley of death”: Funding for climate tech startups dropped 20% in 1H 2024 compared to the same period last year. The climate tech industry received USD 11.3 in funding but only USD 2.8 bn went towards Series B (growth-stage) startups compared to the USD 4.2 bn they received in 1H 2023.
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CIRCLE YOUR CALENDAR-
The UAE will host the World Utilities Congress from Monday, 16 September to Wednesday, 18 September in Abu Dhabi. The event will gather global energy leaders, policymakers, and other industry professionals from the power and water utilities value chain to discuss industry trends and challenges.
Saudi Arabia will host the EV Auto Show from Tuesday, 17 September to Thursday, 19 September in Riyadh. The show offers a platform for participants to learn about the latest EV technologies and services.
The UAE will host the Green Steel Summit from Wednesday, 25 September to Thursday, 26 September in Dubai. The event will bring together steel industry professionals and decision makers to discuss market intelligence and the latest technological developments in sustainable steelmaking.
Egypt will host the Portfolio Egypt conference on Monday, 30 September in Cairo. The event aims to enhance cooperation among Arab stock exchanges and will cover crucial topics including market integration, product diversification, carbon markets, and regional debt markets. It will aim to outline recommendations to strengthen regional financial markets.
Egypt will host Cairo Sustainable Energy Week from Tuesday, 1 October to Thursday, 3 October in Cairo. The event will bring together policymakers, companies, and experts to discuss collaboration on the renewable energy transition across 17 Arab countries.
The UAE will host the World Green Economy Summit from Wednesday, 2 October to Thursday, 3 October in Dubai. The summit will promote the push for a green economy and will offer a platform for international entities to collaborate on sustainable development, financing, and policymaking.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
