TODAY: Another blockbuster green sukuk issuance for Al Rajhi

Good morning, nice people. It’s a fairly busy morning with a plethora of updates filing in from around the region while our industry awaits the latest move from the Biden administration in the ongoing squabble over China’s increasing foothold in the green sector…

THE BIG CLIMATE STORY OUTSIDE THE REGION-Biden is set to impose new tariffs on China this week: US President Joe Biden is expected to roll out a tariff update on Chinese imports including up to a quadruple hike on EVs as soon as tomorrow, sources told WSJ. The new tariffs will also cover Chinese semiconductors and solar equipment as the US grapples with China’s growing influence and stronghold on manufacturing amid the green transition. Talks of increased protective measures were first sparked by the US Trade Representative’s office weeks ago and internal deliberation has been ongoing since, possibly extending even beyond Tuesday.

Chinese car makers will likely push to set up shop abroad in response, and CNBC reports Thailand, which bills itself as the “Detroit of the East,” could benefit. Byd and rival Neta Auto could start producing in Indonesia soon, as we noted last week.

Sound like a familiar playbook? It’s effectively what Japanese automakers did in the 1980s to smooth-over tensions with the US as imports threatened the American car industry.

The story grabbed a lot of ink over the weekend: Reuters | AP | The Financial Times | Bloomberg | The Wall Street Journal | The Guardian | The New York Times | CNBC

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HAPPENING TODAY-

The World Hydrogen Summit, sponsored by Masdar, is kicking off today in Rotterdam and gathering 15k industry professionals and leaders from around the world. 2k delegates and 350+ speakers will convene to discuss the global hydrogen supply chain, how governments are supporting the hydrogen economy, the latest in electrolyzer production, and the decarbonization of heavy industry. The summit is set to conclude on Wednesday.

COP WATCH-

China + US to co-host event at COP29 : After two days of talks, Chinese climate envoy Liu Zhenmin and American climate advisor John Podesta agreed to co-host an event on methane and other greenhouse gasses reduction at COP29 in Azerbaijan, according to a US Department of State statement released on Friday. The pair also discussed Chinese overcapacity of solar panels, EV batteries, steel, and coal power — which has been an area of contention for some time — and agreed to improve monitoring and standards of methane emissions controls, Reuters reported.

COP28 president Sultan Al Jaber will also host a round of climate talks with energy and tech industry leaders in Abu Dhabi ahead of Azerbaijan’s COP29, he told The Financial Times last week. The “Change Makers Majlis” will gather execs to discuss the role of AI in the energy transition and their potential to make energy grids more efficient to accelerate the green energy shift. AI will become an essential tool for the energy transition, especially as data center electricity consumption is expected to double by 2026 according to data by the International Energy Agency, FT notes.

WATCH THIS SPACE-

#1- The UAE eyes semiconductor chip manufacturing ambitions: The UAE is seeking support from the US to become a producer of advanced semiconductors, in a bid to position itself as a regional heavyweight in artificial intelligence, AI Minister Omar Al Olama told Bloomberg last Thursday.

The country is going after developing new generation chips, as opposed to competing with cheaper models from countries with larger labor forces. “The only way this will work is if we’re able to build sustainable and long-term partnerships with countries like the United States where we are able to build cutting-edge chips,” Al Olama said.

Not the first time the UAE and the US eye chip manufacturing: OpenAI CEO Sam Altman touched down in the UAE last month to push for private sector support for a costly, large-scale semiconductor venture. Abu Dhabi sovereign wealth fund Mubadala has also backed one of the US’ leading semiconductor manufacturers, Global Foundries.

REMEMBER- Semiconductors are a key component for clean energy sources: Semiconductor tech is crucial in helping national grids maintain stable power delivery as more renewable energy sources like wind, solar, wave, and tidal power — which are intermittent in production by nature — are added. By controlling power generation and grid connection, they enable efficient energy conversion in renewable plants and facilitate power transmission to the grid. As the MENA region continues to expand its renewables capacities, the demand for semiconductors is expected to grow in parallel.

The semiconductor global supply chain is seeing a shift: A few companies concentrated in China are leading the manufacturing of semiconductors due to their high cost and difficulty producing, according to Bloomberg. However China is still dependent on US tech imports for production, but has recently had to look elsewhere after the US has been curbing exports to tackle the competition.

#2- Masdar’s Eagle has landed: The first of 50 wind turbines has been successfully installed at Masdar and Iberdrola’s joint 476 MW Baltic Eagle offshore wind farm in Germany, according to a statement released on Thursday. Denmark’s wind turbine developer Vestas is supplying the wind turbines, which are being installed using the jack-up vessel Blue Tern owned by Norway’s Fred. Olsen Windcarrier, the statement added. The project is scheduled to be operational by the end of 2024 and will power around 475k houses to reduce CO2 emissions by 800k tons per year.

REFRESHER- Masdar has a 49% stake in Baltic Eagle: Masdar reached financial close on EUR 488 mn in funding to secure its 49% acquisition of the Baltic Eagle wind farm back in March. The company initially entered a strategic agreement with Iberdrola last July to co-invest in the purchase of the EUR 1.6 bn project.

More overseas investments are underway: Masdar and Iberdrolaare also exploring further offshore wind and green hydrogen projects in key markets, such as the UK, the US, and Germany, the statement adds. This comes as part of a strategic partnership signed during COP28 to co-invest EUR 15 bn in overseas projects.

#3- 1 GW of renewable energy heading to Kuwait’s national grid: Kuwait Oil Company (KOC) has finalized an agreement with the Ministry of Electricity, Water and Renewable Energy to connect 1 GW of solar and wind energy plants to the national electricity grid, Trade Arabia reports. The agreement — signed by KOC CEO Ahmed Jaber Al Eidan and the ministry’s acting undersecretary Maha Al Asousi — aims to overcome challenges in implementing renewable energy projects. The new plants also aim to curb carbon emissions and relieve the current pressure on the national grid.

#4- Iraq’s Supreme Committee for Reconstruction and Investment approved the development of a solar power plant in the Babylon governorate, INA reported last week without providing any further details of the project. The committee also approved a power interconnection line between Iraq and Saudi Arabia, moving forward with plans to trade renewables between the two countries and eventually with the EU.

Could it be TotalEnergies’s solar initiative? France’s TotalEnergies is set to begin operating the first phase of its solar power project in Iraq “within the next year,” TotalEnergies CEO Patrick Pouyanné told Iraqi Prime Minister Mohammed Al-Sudani last month. Details on the name, capacity, or investment ticket of the project were not mentioned at the time.

Iraq has other solar projects in the works: Masdar’s 1 GW solar project in Iraq — first announced in 2021 — has recently been referred to the cabinet for review and is now pending final approval and tax exemptions for the investor. Masdar has been planning to establish 1 GW of solar projects across four regions in Iraq including a 450 MW farm for the Dhi Qar governorate, 100 MW and 250 MW plants planned in Ramadi city in Anbar governorate, a 100 MW plant in Nineveh governate’s Mosul, and another 100 MW plant in Maysan governate’s Amarah. A delegation from Masdar met with Iraq’s electricity minister last August to discuss the projects.

#5- Tunisia can spur growth on the back of its green sector, study finds: Expanding renewable energy production in Tunisia could increase the country’s economic growth by 1.1% to 1.75% by 2030, according to a report (pdf) published by The World Bank last week. The different decarbonisation scenarios accessed reveal that a growth in renewables would lead to low energy costs which would benefit all sectors in the short term, particularly the more energy dependent agriculture and industry sectors. While the report shows that public debt is predicted to increase in all scenarios, it concludes that the impact on the economy will not be significant given that most green investments will come from the private sector.

What would it take? The report estimates that around USD 27-35 bn in investments will be needed by 2050 to implement Tunisia’s energy transition. While some efforts have been made to increase renewables investments in the country so far, the WB recommends speeding up the process to achieve the discussed energy transition targets and achieve the calculated economic benefits outlined in the report.

DANGER ZONE-

US observatory records largest CO2 increase on record: The National Oceanic and Atmospheric Administration’s(NOAA)observatory located on top of a volcano in Hawaii has measured a record-breaking y-o-y increase in CO2 in March of 4.7 parts per mn (ppm) compared to last year, The Guardian reported on Thursday, citing findings by US’ Scripps Institution of Oceanography. The surge is attributed to the periodic El Niño climate event and the continuous rise in greenhouse gas emissions due to fossil fuel burning and deforestation, Scripps explains. NOAA announced last June that the global concentration of CO2 had hit 421 ppm last year — a 50% increase on pre-industrial times and the highest in mns of years, the news outlet said. The latest reading shows the world at around 426 ppm of CO2, increasing the likelihood of severe climate breakdown including heatwaves, floods, droughts, and wildfires.

REMEMBER- The world keeps breaking temperature records: The average global temperature in the last 12 months has been the highest on record at 1.61°C above pre-industrial levels. Temperatures were most above average over northwest Middle East, most of Africa, northern and northeastern North America, Greenland, eastern Asia, and parts of South America.

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 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.

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CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Energy Convention from Sunday, 19 May to Tuesday, 21 May in Riyadh. The convention will see energy and utilities industry leaders advance collaborative decarbonization efforts and identify innovation areas. It will also host the Saudi Utilities Convention and Saudi Hydrogen Convention to address the role and challenges of rolling out hydrogen, water and utility projects that are in line with the global energy transition. Over 10k energy professionals and 200 industry speakers will be present at the event.

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.

Saudi Arabia will host the Future Aviation Forum from Monday, 20 May to Wednesday, 22 May in Riyadh. The event, organized by the General Authority of Civil Aviation, will see the Kingdom showcasing some USD 100 bn worth of investment options in the aviation and logistics sector at large.

The UAE will host the Bonds, Loans & Sukuk Middle East event from Tuesday, 4 June to Wednesday, 5 June in Dubai. Billed as the Middle East’s largest corporate and investment banking event, it serves as a key meeting point for those active in the region’s capital markets. Over 1.4k governments, corporates, investors, banks, law firms, regulators and service providers as well as more than 75 expert speakers will be in attendance.

Turkey will host the International Conference on European Energy Market, from Monday, 10 June to Wednesday, 12 June in Istanbul. The three-day event will gather experts from scientific, industry, and policy sectors for discussions on various energy market-related topics. The conference covers themes including energy modeling, market design, regulatory policies, and climate change.

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