TODAY: OQ IPOs methanol unit + Solar-powered drones are landing in Saudi

Good morning, folks. It’s another busy start to the week in our regional climate industry, with lots of updates to unpack this morning. We have a health check on Oman’s OQBI IPO, some green financing news from Morocco, and the latest on Saudi’s venture into solar-powered drones production. Let’s jump right in.

THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single story dominating the headlines, but Goldman Sachs has removed itself from the Net-Zero Banking Alliance (NZBA) which aims to align bank lending and investing with climate change mitigation efforts. The decision likely came due to pressure from US Republicans who criticize NZBA membership as a breach of anti-trust rules, but the bank did not confirm any particular reason for the exit and affirmed its still committed to its climate goals in a statement. The NZBA declined to comment to the press.

“It’s a shame to see leading institutions leave these alliances … But it’s important to note they aren’t repudiating their net zero commitments,” UNEP Finance Initiative’s former risk head told Bloomberg.

Not the first time: Goldman Sachs Asset Management withdrew from Climate Action 100+, the world’s largest climate alliance for investors in April amid rising attacks from Republicans. The move followed similar defections by other major firms, including AllianceBernstein, JPMorgan Chase’s asset management arm, and Pacific Investment Management Co.

REMEMBER- An anti-ESG movement is growing in the US: In June, Republican lawmakers accused Wall Street of “colluding” with climate advocacy groups and forming a “climate cartel” in their bid to shrink corporate America’s emissions. Because of the anti-ESG campaign, big asset managers like BlackRock have scaled back their climate commitments. You can read more about the impact in our deep-dive into ESG divestment.

The story grabbed ink over the weekend in Reuters, Bloomberg, and CNBC.

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HAPPENING THIS WEEK-

The International Mangrove Conservation and Restoration Conference kicks off tomorrow in Abu Dhabi and will run until Thursday, 12 December. The conference will gather global scientists and conservation experts dedicated to mangrove and coastal ecosystem restoration, seeking to share research, innovative approaches, and best practices for holistic restoration, including habitat diversity, connectivity, and climate resilience. You can find the full program here.

WATCH THIS SPACE-

#1- VinFast’s new EV plant will begin production next year: VinFast Auto is set to commence operations at its new electric vehicle manufacturing plant in Vietnam’s Ha Tinh province by July next year, the company told Bloomberg in an email. The facility — which will focus on producing the VF 3 and VF 5 models — is expected to have an initial production capacity of 300k cars per year, with plans to double this target eventually. This new plant will be the company’s fifth automobile assembly facility and will cater to domestic and international markets.

Some struggle: The company has high global ambitions, but faces strong competition from Chinese counterparts and other established producers. It scored a net loss of USD 741 mn in 2Q 2024, a big rise from its 2Q 2023 losses of about c. 528 mn, according to a Bloomberg report earlier this year.

Does the company have regional backing? A consortium led by Emirates Driving Co. has agreed to reportedly funnel at least USD 1 bn of funding into VinFast in October. The funding was reportedly part of an agreement the pair signed that month that included “investment support,” but the official statement did not mention an agreed financing figure. VinFast established its regional headquarters in Dubai with assistance from the Dubai International Chamber as part of the Vietnamese company’s global expansion strategy in June.

#2- Saudi Arabia agrees to pay more for Kenyan carbon credits: Saudi Arabia has reportedly agreed to purchase carbon credits from Kenya at a rate of USD 8, up from a previous USD 3, Nation Africa reported on Friday, citing sources it says have knowledge of the matter. The new rate — negotiated on the sidelines of Riyadh’s COP16 — would be part of carbon credit trades aimed at helping Kenya invest in land restoration and land degradation prevention.

The new rate is too low compared to those from the developed world, sparking concerns over fairness, Nation Africa reports. The price is far below the average of USD 80 recommended by the World Bank and the rate of trades between developed countries, which stands at USD80-100, the World Economic Forum Managing Director Gim Huey Neo told Nation Africa.

ICYMI- It is not the pair’s first carbon credit collaboration: Saudi Arabia’s PIF-backed Regional Voluntary Carbon Market Company (RVCMC) hosted an auction in Nairobi in June 2023, drawing big demand from over a dozen firms — a majority of which were Saudi Arabian firms — who bid on an available 2 mn tons of carbon credit. The auction saw a clearing price of SAR 23.50 (c. USD 6.25) per ton. On the auction’s sidelines, the RVCMC signed an MoU with Kenya’s main dry cell battery maker Eveready East Africa to set up high-quality and impactful carbon projects in June 2023.

#3- Jordan is looking to produce up to 600k tons of green hydrogen per year by 2030, and 3.4 mn tons by 2050 as it seeks to establish itself as a global player in the sector, Petra reported on Thursday, citing comments made by Jordan’s Secretary General of the Ministry of Energy and Mineral Resources Amani Azzam at a ministerial meeting in Brussels. The kingdom also aims to increase solar and wind energy’s share in the electricity mix from 27% to 30% by 2030 by increasing energy storage.

ICYMI- The country is laying the regulatory groundwork for these plans: A new electricity bill is currently advancing in Parliament reportedly designed to attract significant investments in renewable energy, including green hydrogen.

Big hydrogen plans in play: Jordan signed 14 MoUs exploring green hydrogen and ammonia production projects, with the latest agreement signed last month with China’s Hangzhou Huading New Energy (HD Solar) to conduct feasibility studies for a green hydrogen and green ammonia plant. Jordan Green Ammonia — a JV formed between Poland-based Hynfra and Jordan-based Fidelity Group — is also building a USD 1.6 bn green ammonia and hydrogen facility in the Aqaba Special Economic Zone, with a planned annual production capacity of 100k-200k and surplus export plans.

#4- Qatar lists green bonds on the London Stock Exchange: Qatar listed its inaugural USD 1 bn green bond issuance on the London Stock Exchange last Thursday to raise financing for green projects, according to a statement released last week. The blockbuster USD-denominated issuance — its first foreign currency denominated bonds in the past four years – was 5.6x oversubscribed, pulling in USD 14 bn worth orders last May.

Not Qatar’s only recent green bond: Qatar’s Commercial Bank (PSQC) launched a debut three-year CHF-denominated green bond in September. The issuance raised CHF 225 mn (c. USD 1.39 bn) at a coupon rate of 1.707% payable annually. The bond was initially priced at 130 basis points (bps) but was later tightened to 120 bps in response to high demand.

#5- A new player in Egypt’s renewables market? Egypt’s infrastructure company Algammal for Contracting is expanding operations across various sectors including renewable energy, the company’s vice president Mohamed Farouk Hafeez told Egypt Daily News last week. Algammal plans to launch a dedicated renewable energy department by 4Q 2025, focusing on solar and wind power.

The company is also working on the Egypt-Saudi Arabia electricity interconnection project, managing three critical work packages. These include the installation of submarine cables, civil works using advanced techniques like tunnel boring, and directional horizontal drilling. It’s also gearing up to establish three industrial complexes in Saudi Arabia, Libya, and Iraq, Hafeez told EnterpriseAM last month.

About the group: Founded in 2003, Algammal initially started its journey with subcontracting for electrical infrastructure projects. Over time, the group expanded into general contracting. By 2008, the company entered the pipes and electrical networks sectors as a certified subcontractor for major contractors, evolving into a prominent general contractor for infrastructure, electrical networks, industrial projects, commercial buildings, and housing projects. The group currently has a branch in Libya and opened its latest branch in Saudi Arabia eight months ago as part of a regional expansion push.

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CIRCLE YOUR CALENDAR-

The UAE will host the World Energy Summit from Tuesday, 14 January to Thursday, 16 January in Abu Dhabi. The summit will host over 350 speakers including energy industry leaders and policymakers with discussions ranging from eco-waste to sustainable cities. An exhibition will also be held for showcasing green products.

Saudi Arabia will host the Future Minerals Forum from Tuesday, 14 January to Thursday, 16 January in Riyadh. The forum will gather stakeholders from over 170 countries to discuss mineral technology and exploration. Speakers will include senior government officials and CEOs from renowned mining companies Vale, Rio Tinto, and Manara.

Bahrain will host the Sustainability Forum Middle East from Tuesday, 28 January to Wednesday, 29 January in Manama. Climate experts and decision-makers will convene to discuss a number of issues ranging from decarbonization to supporting SMEs on their path to net zero. Speakers will include GCC government officials and industry leaders from the banking and industrial sectors.

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