TODAY: Masdar wraps second green bond issuance + A big day for mining in the region

Good morning, friends. We have a packed issue this morning with the latest on Masdar’s second blockbuster green bond issuance and a spate of mining updates from around the region. But first, an update from Azerbaijan as they lay the groundwork for hosting COP29…

THE BIG CLIMATE STORY OUTSIDE THE REGION- Azerbaijan launches the Climate Finance Action Fund: Azerbaijan has launched the Climate Finance Action Fund (CFAF) aimed at raising USD 1 bn to support climate action in developing countries, according to a statement published on Friday. The fund, to be capitalized by contributions from fossil fuel-producing nations and companies, aims to mobilize the private sector and de-risk investments. It will also provide concessional and grant-based support to address natural disasters and offer guarantees for renewable energy producers.

The details: The CFAF is part of a broader COP29 action agenda, which includes 14 initiatives working on climate action, the statement added. The fund will focus on various sectors, including food and agriculture, and will reinvest profits from projects back into the fund. Half of the capital will support clean energy tech and energy efficiency projects in developing countries, while the remaining funds will help member countries meet their Nationally Determined Contributions to keep the 1.5°C temperature target within reach.

This has been in the works: Azerbaijan announced launching the fund to raise at least USD 500 mn in climate finance for poorer countries with a contribution from the state-owned oil company Socar last week.

The story was picked up by Reuters, Bloomberg, and The Guardian.

HAPPENING TODAY-

#1- Saudi officials head to Brazil and Chile amid global mining push: A delegation led by Industry and Mineral Resources Minister Bandar Al Khorayef will be in Brazil and Chile for more than a week starting today to look at potential investments in mining and manufacturing, SPA reports. The delegation will meet with government officials as well as execs from top mining, aviation and food companies — including Vale, Minerva Foods, JBS, BRF SA, Codelco, Antofagasta, and others — in both countries. The delegation’s trip to South America wraps up on Tuesday, 30 July.

A focus on lithium: The visit to Chile, the world’s second-largest producer of lithium, comes as the Kingdom continues to invest in green energy and after policymakers identified it as a key national priority.

Why it matters: Lithium is a critical component of both modern consumer electronics and the green transition, factoring into everything from rechargeable batteries for phones and computers to electric vehicles and grid storage. Al Khorayef said in April that Saudi will continue to source lithium from abroad as part of its plans for the nascent EV sector as securing domestic supplies were still at an early stage.

#2- The two-day 8th Ministerial on Climate Action kicks off today in Wuhan, China. Hosted by China, the EU, and Canada, the meeting will focus on addressing challenges in international climate negotiations, enacting strong commitments under the Paris Agreement, and developing ambitious national climate action plans ahead of COP29. The COP28 Presidency will join the meetings to discuss progress on the UAE Consensus and COP Presidential Action Agenda. The COP Presidencies Troika will also host an Action and Ambition Majlis during the meetings focusing on the conservation, protection and restoration of forests, sinks and reservoirs

ON A RELATED NOTE- Sweden joins COP28 climate finance framework: Sweden has signed the UAE’s Leaders Declaration on a Global Climate Finance Framework which was published at COP28, according to a statement. With the addition of Sweden, the declaration is backed by 15 countries, including Barbados, Columbia, France, Germany, Ghana, Kenya, Senegal, the UK, and the US.

About the declaration: The UN’s Independent High-Level Expert Group released its Climate Finance Framework report during the summit outlining the action plans needed to implement the framework and deliver on the Paris Agreement. The report outlines a roadmap to deliver climate funding and address the issues facing emerging markets and developing countries in their implementation of adaptation and mitigation policies.

WATCH THIS SPACE-

#1- Fertiglobe to move forward with green ammonia export after final decision on Egyptian plant: UAE-based urea and ammonia exporter Fertiglobe’s agreement to export green ammonia from its Egyptian plant to Europe will hinge on reaching financial investment decision for the Ain Sokhna green ammonia plant, Asharq Business reports, citing a company official. The source clarified that the supply contract is non-binding and depends on finalizing the investment agreement with the consortium developing the plant, with a decision anticipated in 1H 2025.

REMEMBER- Fertiglobe secured a EUR 397 mn offtake agreement from the German government’s H2Global program to supply green ammonia to the EU from its Egyptian facilities between 2027 and 2033, which it is developing as part of a consortium comprising Scatec, the Sovereign Fund of Egypt, and Orascom Construction.

About the plant: The plant kicked off its first phase in November 2022 and aims to produce some 13k tons of green hydrogen a year, which will be used to create 70k tons of green ammonia at Fertiglobe’s ammonia plants. 270 MW of solar and wind power plants will be installed to power the plant.

#2- UAE is looking to build a second nuclear power plant: The UAE is considering building a second nuclear power plant worth USD tens of bns, potentially attracting bids from China, Russia, or the US, UAE’s Ambassador to Austria and the Permanent Representative to the UN’s nuclear agency Hamad Alkaabi told Reuters last week. South Korea will not be favored during the tender issue as Korea Electric Power Corporation was already awarded a USD 20 bn contract for UAE’s Barakah nuclear plant. No final budget, size, or location decisions have been made yet, but the government is actively exploring the option with a tender possibly being issued this year.

IN OTHER UAE NEWS- UAE’s Bee’ah is exploring investments up to AED 500 mn (c. USD 136 mn) in Egypt’s waste management and sustainability, according to a statement published on Saturday. The firm is looking to build multilateral partnerships with local and foreign partners working in medical waste management and agricultural waste recycling. Bee’ah is also looking to partner with investment funds to hedge financing risks. This came during a meeting between company representatives and Environment Minister Yasmine Fouad.

Bee’ah is no stranger to Egypt: The firm was tapped in December to develop the solid waste management infrastructure in the new capital. The initiative aims to divert 80% of waste away from landfills as well as develop waste management infrastructure including advanced collection systems, recycling facilities, and waste treatment plants.

DANGER ZONE-

Airlines expect passenger numbers to double over the next two decades, driven by emerging markets like Asia Pacific and the Middle East, AFP reported on Friday, citing updated data by global airline coalition International Air Transport Association. The Asia Pacific region is projected to lead with 4.8% annual growth by 2043, while Africa and the Middle East will see a 3.6% increase in the same period. Sustainable aviation fuel (SAF) — which currently makes up just 0.53% of fuel consumption — is expected to play a key role in decarbonizing the sector, though significant investments are still needed to scale production.

The industry has a deadline to decarbonize: The aviation industry — which accounts for almost 3% of global CO2 emissions — has a critical deadline to introduce cleaner planes by the mid-2030s, Bloomberg reported last week, citing a recent study (pdf) by the International Council on Clean Transportation (ICCT). The study emphasizes the need for new aircraft models that emit zero CO2 throughout their operational lifetimes, given the long service life of commercial planes, which typically span about 25 years. The ICCT warns that the current fleet will consume half of the 2050 carbon budget, urging plane makers to accelerate the development of zero-emissions aircraft, particularly those powered by hydrogen.

It’s not an easy path: While Airbus and Boeing are working on more efficient models and SAF blends, with Airbus aiming to introduce a hydrogen-powered aircraft by 2035, the adoption of SAF and other technologies is progressing slowly, and startups in the electric and hydrogen-powered aircraft sectors face financial hurdles, the study found. The ICCT estimates a market for at least 10k new aircraft powered by hydrogen, electricity, or 100% sustainable fuels through 2042, and is calling for increased investments and stricter emissions limits for new planes

THE SCORECARD-

Emerging companies operating in the global energy sector secured over USD 7 bn in early stage financing in 1H 2024 with USD 5.9 bn earmarked for clean energy projects, Wam reported, citing data from the International Energy Agency. Some USD 1.4 bn went towards digital energy ventures in the same period. 2022 set the record for the highest level of early financing in energy in the last 24 years, reaching USD 24.8 bn.

The breakdown: Last year the share of emerging companies operating in the field of renewable energy stood at 32.2%, Wam writes, with 8.2% was attributed to solar firms and 0.6% for wind energy. Companies operating in the field of energy efficiency represented 16.8% of the energy market, while energy storage and batteries took 10.3%, and nuclear companies amounted to 1.1% of the market. There are currently around 63.7k clean energy startups operating globally.

UAE has its share of the growth: Energy startups based in the UAE secured over AED 110.2 mn (c. USD 30 mn) in funding in 1H 2021, according to another report by Wam. Energy storage and battery startups contributed 33.3% of the total, followed by solar energy companies at 25%, and wind energy at 8.3%. The remaining 33.3% was distributed among other renewable and clean energy sources. As of the end of 2023, the UAE was home to 54 energy startups, including 12 in energy storage and batteries, 9 in energy efficiency, 21 in various renewable energy fields, and 12 in other energy sectors.

WORTH READING-

Takaful protects farmers against climate risks: Takaful ins. is catching the attention of Islamic farmers who are wary of interest-gaining ins. contracts but still seek means to protect their farmland against climate disasters, Bloomberg writes. Takaful ins. abides to Islamic law with buyers pooling their money to offset each others’ losses, regaining any surpluses after service fees and other costs are paid. This type of ins. is yet another protection instrument joining the ranks of catastrophe bonds and weather derivatives as climate risks play a greater role in ensuring protection against losses.

Case in point: Pakistani farmer Izhar ul-Haq turned to YouTube to learn innovative agricultural protection measures and adapt to increasing water scarcity and high temperatures, but the 2022 Pakistan floods proved extreme weather events are uncontrollable. Following the floods, ul-Haq and other farmers who were averse to commercial ins. coverage due to their religious beliefs found Takaful to be an effective alternative to protect them from climate dangers.

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CIRCLE YOUR CALENDAR-

The UAE will host the World ESG Summit from Tuesday, 20 August to Wednesday, 21 August in Dubai. The summit will gather experts and industry leaders to explore new ways to integrate Environmental, Social, and Governance (ESG) principles into business practices.

Turkey will host the International Conference on Clean and Green Energy Engineering from Saturday, 24 August to Monday, 26 August in Izmir. The event will gather researchers and professionals to share advances in clean energy. It will also offer a platform to discuss the latest research, practices, and applications in clean and green energy engineering.

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