TODAY: A busy M&A heavy day in the region

Good morning, friends, and happy International Earth Day to you. We have a hefty issue this morning with several M&A updates, laying it heavy on the mining acquisition side. But first…

OUR NEXT CONFERENCE IN CAIRO-

Foreign investors are falling in love with Egypt again… Foreign investors we speak with (debt, equity, and strategic alike) have a growing appetite for Egypt. They’re buying into local debt, eyeing promising shares, and committing bns of USD to both new ventures here and the growth of their existing businesses. They like the Egypt story that’s taking shape after the float of the EGP, and its competitive advantages are clear to many of them: It’s a massive consumer opportunity and a regional export hub of tomorrow.

The Enterprise Optimism Forum 2024 will do exactly what it says on the tin: Spark conversations about a future that sees Saudi Arabia, Egypt, and the the UAE at the heart of a more vital Middle East economy — and provide an early, actionable roadmap for those who are “long Egypt.”

We’ll be talking with you about the agenda over the coming couple of weeks. It features speakers from Egypt and abroad who are future-proofing their businesses and angling to capture tomorrow’s opportunities — and who aren’t afraid to answer some tough questions.

*** Interested in attending? Tap or click here to let us know. Seating is limited.

#1- Acwa Power, Irena partner on global renewable energy transition: Saudi renewable energy giant Acwa Power inked an agreement with International Renewable Energy Agency (Irena) to “drive the worldwide transition to renewable energy sources,” according to a statement released on Thursday. The two will look into how to “mobilize finance and investment in renewable energy projects and support infrastructure, facilitating the development, storage, distribution, transmission, and consumption of renewables.” They will also exchange data on necessary infrastructure investment for renewable energy, green hydrogen, solar and others.

IN OTHER KSA NEWS- Single-stock options (SSOs) on Saudi mining giant Ma’aden’s stock began trading yesterday, according to a statement released on Thursday. The contracts will be cleared by the Securities Clearing Center Company (Muqassa). Tadawul launched SSOs in November as its third derivatives product.

What’s this SSO of which you speak? The instrument allows investors to hedge their equity portfolios — and traders to speculate on whether the underlying asset.

#2- Egypt’s private sector eyes renewables for its operations: Twenty private companies in Egypt have expressed interest in implementing renewable energy projects using the P2P (Private to Private) system, Al Arabiya reported on Thursday, citing sources from the Electricity Ministry. This initiative is part of the first phase of involving the private sector in Egypt’s transition to a competitive electricity market. The Egyptian Electric Utility and Consumer Protection Regulatory Authority has approved the regulations for the P2P mechanism and there is strong demand from companies to start projects within the current year, with some aiming to implement projects exceeding 1 GW over two years with investments of over a USD 1 bn.

What we know: The interested companies include Infinity, Scatec, Alcazar, AMEA Power, EDF, El Sewedy, Enara, and KarmSolar, the report adds. Officials from these companies say they have reached preliminary agreements with fertilizer, ceramic, and cement factories to supply them with electricity from renewable sources.

#3-Iraq plans to enact renewable energy law: The Iraqi Parliament’s Electricity and Energy Committee is discussing moving ahead with its Renewable Energy Regulation Bill, according to a statement published last week. The Parliament meeting aimed to establish a legal framework for electricity production, address climate change in line with international commitments, and promote sustainable development. The committee recommended proceeding with the bill’s legislative process and expressed readiness to receive further input from Council members.

About the law: The new law aims to develop and improve Iraq’s renewable energy sector, enhance energy efficiency, and consider the establishment of a national emissions trading company linked to the Renewable Energy and Energy Efficiency Regulatory Authority. Last month, the committee reviewed contributions from advisory bodies, including various ministries and committees, and recommended expediting the legislation process according to the legal protocols of the Council of Representatives, emphasizing the urgency of its enactment.

REFRESHER- Iraq aims to sign 3.7 GW in renewables contracts this year: Iraq is planning to ink agreements to establish 3.7 GW of renewable energy by year end. The country has already signed three agreements to generate 2.4 GW of renewable energy, 500 MW of which should be operational by summer. The country is also tapping Saudi’s Acwa Power for a 1 GW project in Najaf city, and UAE’s Masdar for another 1 GW project in its western regions.

#4- “Reality check” needed on fossil fuel phaseout, JP Morgan says: The world needs a “reality check” about its transition away from fossil fuels as it may take much longer than anticipated to achieve net zero targets, The Financial Times writes, citing a recent global energy report sent by JP Morgan to clients. The recent shift in the macroeconomic environment necessitates a reevaluation, as the estimated annual cost of USD 3 tn to USD 4 tn for the energy transition is now set against a backdrop of increased government debt and structural changes in geopolitics, JP Morgan’s head of global energy strategy Christyan Malek says in the report.

Things aren’t going according to plan: The transition to renewable energy should be measured in decades or generations — not years — due to insufficient returns on investment in renewables and the potential for social unrest if energy prices surge, JP Morgan argues. Energy consultancy Wood Mackenzie has made similar warnings, saying that higher interest rates will make the net zero transition more difficult and costly, which will particularly affect renewables and nuclear power due to their high capital intensity and low returns.

But not everyone agrees: Despite JP Morgan’s warnings, Rocky Mountain Institute energy strategist Kingsmill Bond says that renewable energy “is much cheaper and more efficient than fossil fuel energy, which is why almost all electricity generation capacity now being built is solar or wind.” Bond argues that energy infrastructure spending is expected to grow annually by only 2%, as funds are increasingly redirected from oil and gas ventures toward renewable projects.

#5- WB locks in USD 11 bn in climate pledges: The World Bank Group (WB) has received a total of USD 11 bn for its new financial instruments: the Portfolio Guarantee Platform, hybrid capital mechanism, and the new Livable Planet Fund, according to a statement released on Friday. Countries including Belgium, France, Japan, and the US have contributed to the Portfolio Guarantee Platform while the UK, Denmark, Germany and others committed to hybrid capital, which offers shareholders and partners a chance to invest in bonds with unique leveraging potential. Pledges allocated to both instruments could generate up to USD 70 bn over the next decade. Japan has also made the first contribution to the Livable Planet Fund.

And more: The World Bank Group has enacted a set of reforms and introduced creative financial tools as part of the review of the Capital Adequacy Framework, as suggested by the G20 Expert Group, according to the statement. These include modifying the loan-to-equity ratio to unlock USD 40 bn from the International Bank for Reconstruction and Development balance sheet over the next decade and increasing the bilateral guarantee limit by USD 10 bn. It will also publish a comprehensive report for rating agencies to better evaluate its value and the Bank’s financial strength to maximize the benefits of callable capital.

About the initiatives: The Portfolio Guarantee Platform will provide a shared approach to risk, making World Bank financing more accessible. The Livable Planet Fund will enable contributions from governments, philanthropies, and other partners to encourage cross-border cooperation and address shared challenges.

#6- The US is set to introduce new guidelines for carbon offsets to bolster market confidence and ensure genuine emissions reductions, Reuters reported on Friday, citing US top climate diplomat John Podesta. The guidelines will require “real, additional, permanent emissions reductions.” Companies will be encouraged to prioritize direct emission reductions over purchasing offsets. This initiative follows the Energy Transition Accelerator (ETA) program launched in 2022 to aid developing countries in the clean energy transition through private finance. The Center for Climate and Energy Solutions (C2ES) will serve as the ETA secretariat and former secretary of state John Kerry will act as the advisory group chair. “If we do not mobilize the private sector we do not win this (climate) battle,” Kerry said. “We need high quality carbon markets to drive action.”

ALSO-US to impose tariffs on Chinese solar panels: The US is reportedly planning to reverse a two-year-old tariff exemption on a dominant solar panel technology from China and other countries, in response to a request by South Korea’s photovoltaic cell manufacturer Hanwha Qcells, Reuters reported last week, citing sources close to the White House. The request aims to protect Hanwha Qcells’ USD 2.5 bn expansion of its US solar manufacturing presence from competition by cheaper Asian-made products.

Good news for US manufacturers: Duties on imports of bifacial panels, which are crucial for utility-scale solar projects, could benefit the growth of over 40 solar equipment factories planned in the US since the country’s Inflation Reduction Act was enacted in 2022, according to Reuters. Solar manufacturers like US-based First Solar have seen their shares go up following the news.

Not everyone supports the tariffs: The move has sparked division within the US solar industry, with some installers and developers advocating for the exemption to support cheaper imports and keep project costs from rising, the newswire writes. The Solar Energy Industries Association has recommended boosting the quota of tariff-free imported solar cells to aid companies in assembling American-made panels.

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CIRCLE YOUR CALENDAR-

The UAE will host the Connecting Green Hydrogen MENA event from Tuesday, 23 April to Thursday, 25 April in Dubai. The event will explore green hydrogen partnerships, policies, and practices in the region, in parallel to a showcasing of the latest in the clean fuel’s technology.

Oman will host the Oman Sustainability Week from Sunday, 28 April to Thursday, 2 May in Muscat. The event will focus on exploring investment opportunities and implementing best practices in sustainability within the energy, water, and environmental sectors.

Saudi Arabia will host the Saudi Water Forum from Monday, 29 April to Wednesday, 1 May in Riyadh. The forum will facilitate dialogue among water sector leaders, experts, and stakeholders to address challenges and share expertise. It will feature presentations by key entities in the water industry focusing on integrated solutions, showcasing successful water projects, and promoting investment opportunities for sector development.

The UAE will host The Electric Vehicle Innovation Summit from Monday, 20 May to Wednesday, 22 May in Abu Dhabi. The event will see industry leaders come together to discuss sustainable mobility and tapping into groundbreaking advancements in electric vehicles while engaging with key decision-makers.

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