ESG popularity is waning

1

WHAT WE’RE TRACKING TODAY

TODAY: Acwa Power is selling down its stake in Uzbek wind projects + What happened to ESG?

Good morning, wonderful people. We have a relatively busy issue to close out the week, so let’s get to it.

THE BIG CLIMATE STORY- Acwa Power is selling down its stake in two wind projects in Uzbekistan, handing a 35% stake in the projects to China Southern Power Grid International for nearly SAR 600 mn.

^^ We have the details on this story and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- Lab-grown meat gets regulatory green light in the UK: The UK has become the first European country to approve lab-grown meat after its Animal and Plant Health Agency and the Department for Environment, Food and Rural Affairs greenlit Meatly’s chicken product for pets. The lab-grown pet food is made by cultivating cells from a chicken egg with vitamins and amino acids. The approval marks a significant step towards reducing the environmental impact of the pet food industry, which has a climate footprint similar to that of the Philippines alone. Research indicates that 50% of pet owners would consider feeding their pets cultivated meat.

What’s next? The company has raised EUR 3.5 mn and expects to secure an additional EUR 5 mn in its next fundraising round. The UK government is also exploring ways to fast-track the approval of cultivated meat for human consumption.

The story made headlines in the international press: Bloomberg | The Financial Times | The Guardian | The Telegraph

WATCH THIS SPACE-

#1- UAE-based Al Nowais' AMEA Power received approval from the Egyptian cabinet to expand its renewable energy projects in the country by next summer, according to a statement. The expansion will see AMEA up its renewable capacity in the country by 2 GW.

Remember: AMEA Power is currently working on 1 GW-worth of renewable energy projects in Egypt, including the 500 MW solar plant in Abydos, which is set to begin operations by the end of September, as well as a 500 MW wind farm in Ras Ghareb that is slated for completion mid-2025.

Part of a bigger plan: The UAE and Egypt are working to introduce some 4 GW of renewable energy into the national grid by next summer in a bid to help Egypt meet heightened energy demand.

#2- EU green hydrogen targets deemed “unrealistic” by European audit body: The EU is unlikely to meet its 2030 goals for producing and importing 10 mn tons of renewable hydrogen each, according to a new report by the European Court of Auditors. The auditors criticized the European Commission for setting overly ambitious targets without robust analysis and for failing to align member states’ ambitions. Despite the commission's efforts to establish a legal framework, investment decisions have been delayed due to uncertainties in supply and demand. The report also points out that EU funding for hydrogen projects is scattered across various programs, making it difficult for companies to access the necessary resources.

The plans have been in question: A study commissioned by European environmental NGO Transport & Environment also cast doubt on the EU's green hydrogen plans. The study attributed the doubt to a lack of infrastructure, limited export capacity, limited water and land resources, and the obstacles facing e-fuels regulations which ban the use of any fossil carbon for e-fuel production from 2041.

The commission’s response: “Our work is far from finished … We now have to accelerate the deployment and uptake of renewable and low-carbon hydrogen in Europe and further develop this emerging market,” the commission said in a statement to Bloomberg.

#3- Global investment in fusion energy is growing at a slower pace for the second year in a row in 2024, Reuters reports, citing a survey by the Washington-based Fusion Industry Association. Investments this year grew more than USD 900 mn, but this pace of growth falls short of USD 1.4 bn growth last year and USD 2.8 bn in 2022. Some 89% of companies surveyed said they expect fusion to add electricity to the grid by the end of the 2030s but 66% expect funding to be an obstacle. Fusion investment did, however, see a 57% jump from public funding for private fusion companies.

SOUND SMART- Nuclear fusion is a reaction that could potentially generate unlimited energy by fusing atoms’ nuclei — as opposed to splitting the nuclei in a conventional nuclear fission reaction. It could generate four times more power per kg of fuel than fission reactions and nearly 4 mn times more energy than burning oil or coal while producing virtually no carbon and no radioactive waste.

REMEMBER- Nuclear fusion is the newest hype in clean energy: US Special Envoy for Climate John Kerry launched an international plan to accelerate global fusion energy development at COP28 a month after the US and the UK inked an agreement to accelerate nuclear fusion technology. Lots of research breakthroughs for the fuel were achieved this year, including one lab in California that was able to yield a reaction that generated more energy than the initial input used to ignite it, and another research that set a new record for nuclear fusion power production, generating 69 megajoules from just 0.2 milligrams of fuel. The US rolled out its vision for developing fusion technology by 2030 last year, while the UK plans to kick off operations on the world’s first fusion power plant in the 2040s.

WORTH WATCHING-

Once a beacon of hope, whatever happened to ESG’s popularity? ESG investing popularity has gone quiet recently after gaining immense popularity when it first came on the scene, the Financial Times reports (watch, runtime: 27:56). Greenwashing concerns, political pressure, lack of profitability, geopolitical conflict, and a lack of regulation are among the main reasons for the movement’s downfall, according to the FT explainer, which features comments from experts in the industry. The explainer recaps ESG’s rise and fall since 2015, and theorizes that the wave could be evolving into a new approach to green finance that might shift its landscape. Read all about ESG divestment and political pressures it faces in our handy explainer.

DANGER ZONE-

Water scarcity is hitting Tunisia hard: Tunisia’s drought severity has gone up eight percentage points since 2022 to 77% from 69% in 2022, Independent Arabia reported, citing a survey by One to One Research and Polling Institute. Drought severity in Tunisia stood at 45% in 2018. Some 55% of Tunisia’s citizens are forced to reduce their water consumption or seek out alternative sources, and are thus urging their government to improve water infrastructure as their quality of life is significantly reduced. The study reports that 8% of citizens have had to move residences to find better access to water.

Certain groups are more heavily impacted: Lower income social groups are most affected given that their main source of household water is from the tap, the survey finds. Residents of rural areas are being forced to ration their water and diversify their supply sources, while farmers are also bearing the brunt of the shortage, with 64% experiencing crop failure, and many having to alter their livestock raising and grazing methods including changing the type of crops they plant.

Tunisia is trying to address the problem: Tunisia received a USD 1.9 bn IMF loan package last year to build climate resilience. Tunisian authorities said they will support startups that are addressing the issues of water scarcity and drought through innovations in water reuse. The country also launched an Interministerial Network for Ecological Transition to monitor climate resilience progress, including mitigating desertification and building drought resilience.

REMEMBER- The country is no stranger to climate-driven troubles: The World Bank forecasts 71% of climate-related GDP losses in Tunisia by 2050 will be attributable to water shortages, noting inaction to shore up water supplies and step up its flooding and coastal protections could drop the country’s GDP up to 3.4% — translating to USD 1.8 bn annually — by 2030.

***
YOU’RE READING ENTERPRISE CLIMATE, the essential MENA publication for senior execs who care about the world’s most important industry. We’re out Monday through Thursday by 9am in Cairo and Riyadh and 11am in the UAE.

EXPLORE MORE OF ENTERPRISE ON THE WEB — tap or click here to read EnterpriseAM, EnterprisePM, Enterprise Climate, Enterprise Logistics, and The Weekend Edition on our powerful new website packed with reader-friendly features.

Were you forwarded this email? Get your own subscription without charge here or reach out to us on climate@enterprisemea.com with comments, suggestions and story tips.
***

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.

Acwa Power sells 35% stake in 2 wind projects in Uzbekistan

Acwa Power sells down its stake in Uzbek projects: Saudi’s renewables giant Acwa Power has sold a 35% stake in its Bash and Dzhankeldy 1 GW wind projects in Uzbekistan to China Southern Power Grid ’s global investment arm China Southern Power Grid International for SAR 595.9 mn (c. USD 158.9 mn), Acwa said in a statement. The total investment ticket for both projects — the 500 MW Dzhankeldy wind farm and the 500 MW bash wind plant — is around USD 1.3 bn.

About the wind farms: The Dzhankeldy project cost USD 658 mn, while the Bash plant cost USD 690 mn, with both receiving funding from the European Bank for Reconstruction and Development and the Asian Development Bank, according to Bankwatch Network. The China Energy Engineering Group was the lead coordinator for the projects, which are located in the Bukhara region. The network outlined issues facing the plants, including its interference with the biodiversity of the plot of land, which is categorized as a reserve and sanctuary.

Building on prior agreements: The acquisition marks the first co- investment between the two companies for a large-scale renewable energy project in Central Asia, the statement added. This follows framework agreements signed in 2022 between Acwa and Chinese companies, that lay the ground for financing, investment and construction of Acwa's renewable energy projects in Saudi Arabia and Belt and Road Initiative countries.

Acwa has bigger wind projects in the country: The company signed a SAR 18.2 bn (c. USD 4.9 bn) power purchase agreement with the National Electric Grid of Uzbekistan (Negu) to develop a new 5 GW wind farm — set to become the largest in Central Asia — in May. It also signed a SAR 985 mn (c. 262.6 mn) power purchase agreement to develop the 200 MW Nukus 2 wind project in April, and a USD 2.4 bn agreement with the National Electric Grid of Uzbekistan for a 1.5 GW wind energy farm in January 2024. Acwa has a total of 15 projects in Uzbekistan for around USD 13.9 bn.

Hydrogen is on the list too: Acwa also began construction on its green hydrogen production facility — expected to be commissioned in December 2024 — in Tashkent last year. The plant will be connected to an existing ammonia production plant in Tashkent and will generate 3k tons of green hydrogen annually during its initial production phase.

Masdar plans second green bond issuance

Masdar plans dual-tranche green bond: Investor negotiations for Masdar’s USD-denominated Reg S dual-tranche green bond issuance began yesterday, global capital markets intelligence provider International Finance Review reports. The bonds will have tenors of five and 10 years. The value of the future issuance — which will mark Masdar’s second one to date — was not disclosed.

Advisors: Abu Dhabi Commercial Bank, Citigroup, Credit Agricole, First Abu Dhabi Bank (FAB), HSBC, Mitsubishi UFJ Financial Group, Natixis, and Standard Chartered Bank have been appointed as joint lead managers and bookrunners.

We knew this was coming: Masdar said in April that it was planning to take a green bond issuance worth between USD 750 mn and 1 bn to market this year to secure funding for its renewable projects in Central Asia, specifically in Uzbekistan and Azerbaijan. This comes as part of a USD 3 bn bonds program aimed at funding clean energy initiatives in the UAE and globally.

Background: The firm raised USD 750 mn last year in its debut green bond sale, which it listed on both the London Stock Exchange and the ADX. The bonds — which were 5.6x oversubscribed — were priced at 115 basis points over US treasuries from an initial guidance of around 150 bps over the same benchmark.

There could be more planned: “The reason why you can expect that we will do another issuance this year, and in future years, is because we have a very strong pipeline of new greenfield projects around the world,” Director of Corporate Finance and Treasury Bruce Johnson said in April. “These projects are at an advanced stage of development and we are committed to meeting their equity funding needs with the proceeds of our green bonds,” he added.

Rosatom is a leading bidder for Turkey’s second nuclear plant

Russia’s state-owned power company Rosatom is the leading bidder for the construction of Turkey’s second nuclear plant, Bloomberg quotes Turkey’s Energy Minister Alparslan Bayraktar as saying. The development of the plant — called Sinop — is likely to involve a public-private joint venture, with licensing expected to take two to three years. Rosatom is the developer of Turkey’s first nuclear plant in Akkuyu currently under commissioning, making it “well placed to also build the Sinop plant,” Bayraktar noted. The Sinop project has an investment ticket of USD 40 bn.

Who are the other contenders? “South Korea is the other country that’s known to have held talks on the planned four-reactor facility on the Black Sea coast,” Bloomberg added.

About the Sinop plant: The project is owned by Turkey Nuclear Energy, Turkish news outlet Daily Sabah reported last year. The firm said it is planning to commence excavations at the site after finalizing investment negotiations with technology companies. The plant will consist of four pressurized water reactor nuclear power units, each with a net installed capacity of 1.14 GW, totalling 4.56 GW.

Sinop will have an advantage over Akkuyu: Sinop as the location has the advantage of having cooling water temperatures about 5°C lower than those at Akkuyu allowing about 1% greater power output from any thermal unit, according to the Nuclear Business Platform.

Turkey ? nuclear: Turkey aims to add over 20 GW of nuclear capacity to its energy mix by mid-century, but may reach its goal 10 years ahead of that if the Sinop site and a third planned nuclear plant in the Thrace region reach their maximum capacity of eight reactors, Bayraktar said.

Russia is not the only one interested in Turkey’s nuclear sector: Negotiations are ongoing with China on the Thrace project and with the US on small modular reactors, the minister told Bloomberg, adding that US nuclear technology giant Westinghouse Electric is amongst those interested in both small and conventional nuclear projects in Turkey. Executives from the US tech company are scheduled to visit Turkey later this month.

About Rosatom’s first operating nuclear plant: Russia and Turkey signed an agreement to establish the plant in 2010, with construction starting three years after, according to the project’s website. The plant delivered its first fresh nuclear fuel last year produced in the project’s first unit. Three other units are still under construction, with Rostom selecting TSM Enerj i in 2022 to complete construction of the USD 20 bn plant expected to eventually supply up to 10% of the country’s electricity.

The Russian firm is active in the region: Rosatom kicked off construction on the fourth and final reactor of Egypt’s 4.8 GW Dabaa nuclear power plant in January. TVEL — a subsidiary of Russian state-owned nuclear developer Rosatom — also signed an agreement with the Egyptian government in February for the supply of low-grade uranium components. The company is also helping Morocco build an experimental nuclear reactor to power its growing demand for desalination and partnered with Algeria’s Ministry of Energy and Mines on the use of nuclear energy for the next two years.

Egypt’s Desert Research will support resource management + establish renewables + water projects

FOOD SECURITY-

Egypt’s Desert Research + Atomic Energy Authority to exchange knowledge in resource management: Egypt’s Desert Research Center has signed a scientific and research cooperation protocol with the Atomic Energy Authority to exchange knowledge on water quality assessment, wastewater treatment, soil quality evaluation, food processing, and advanced genetic engineering techniques for strategic crop cultivation using, according to a statement.

ALSO- Desert Research signed an agreement to implement renewables + water projects in Shalateen: The center also signed a cooperation protocol with Shalateen Mineral Resources Company to manage and implementing local development projects in the Halayeb and Shalateen regions, including solar-powered desalination plants, solar energy stations, water-efficient greenhouses, and livestock production models adapted to local conditions, according to a statement. Under the agreement, the two will also work on water resource utilization and the establishment of greenhouses for vegetable and fruit cultivation.

WATER TREATMENT-

We have a developer for KSA’s Al Haer sewage treatment plant: Saudi’s Power and Utility Company for Jubail and Yanbu (Marafiq) has joined a consortium with Saudi’s Miahona and Belgian construction developer Besix to develop the Al Haer independent sewage treatment plant project in Riyadh, according to a Tadawul filing. Marafiq will hold 35% of the SAR 1.5 bn project while Miahona will own 45%. The company expects to see the financial impact of the project in 1Q 2027.

This has been in the works: The Saudi Water Partnership Company signed 25-year concession agreements with the companies to develop the plant in March. The plant’s capacity will be 200k cubic meters per day, with commercial operations slated to start in 4Q 2026. The award was made under the BOOT (build, own, operate, and transfer) model.

EVs-

Taiwanese firm to manufacture EV buses in the UAE: Taiwanese electric bus manufacturers Tron Energy Technology Corporation (Tron-e) and MAP Tron-e have signed an MoU establishing a JV dedicated to producing electric buses in the UAE, according to Al Khaleej. The pair will be one of the first electric bus manufacturers in the UAE, and aim to expand into full-scale manufacturing and distribution across the Mena region once the project is tested and receives approvals for safety standards and efficiency. Initial testing is scheduled for the end of Q3 2024 while manufacturing is expected to begin in Q1 2025.

ALSO- Oman launches first electric bus: The Oman National Transport Company (Mwasalat) has officially launched its first electric public bus, Times of Oman reported. We caught wind of the initiative earlier this month when it received funding from Al Maha Petroleum and Sohar International Bank.

Spain allocates USD 2.5 bn for green hydrogen and renewables projects

Spain earmarks USD 2.5 bn for renewables + hydrogen: Spain has announced a new EUR 2.3 bn (USD 2.5 bn) program aimed at accelerating its transition to clean energy, Reuters quotes Spanish Prime Minister Pedro Sanchez as saying in an address to parliament. The initiative — which will focus on providing subsidies for green energy industries and renewable hydrogen production — will work on decarbonizing the agriculture and infrastructure sectors, as well as rural areas. Earlier this month, the government approved EUR 794 mn in subsidies for large green hydrogen projects, targeting an electrolysis capacity of 652 MW. The country recently updated its 2030 hydrogen electrolyser target to 11 GW, up from the previous 4 GW.

Germany is set to cut and reform subsidies for renewable energy producers due to rising government costs, Bloomberg reports. Payments for mid-size and large projects that have electricity prices fall below zero — or produce more energy than the needed demand — will be canceled starting in January. The government currently ensures renewables producers receive a guaranteed minimum price, but with wholesale power prices falling, it has had to cover the difference, costing up to EUR 20 bn this year alone.

What will they do? The government plans to reform future payments by basing subsidies on investment costs rather than guaranteed output prices, Bloomberg adds. This is part of a broader effort to overhaul the power market, build new gas-fired plants, and create a capacity mechanism by 2028. The draft budget law also proposes that subsidies will stop once the power market is sufficiently flexible and has adequate storage capacities.

CALENDAR

JULY 2024

8-18 July: (Monday-Thursday): High-level Political Forum on Sustainable Development (HLPF) 2024, New York, US.

AUGUST 2024

12-16 August (Monday-Friday): Mastering Renewable & Alternative Energies, Dubai, UAE.

20-21 August (Tuesday-Wednesday): The World ESG Summit, Dubai, UAE.

24-26 August (Saturday-Monday): International Conference on Clean and Green Energy Engineering, Izmir, Turkey.

24-26 August (Saturday-Monday): International Summit on Non-Renewable and Renewable Energy, Valencia, Spain.

SEPTEMBER 2024

16-18 September (Monday-Wednesday): World Utilities Congress, Abu Dhabi, UAE.

17-19 September (Tuesday-Thursday): EV Auto Show, Riyadh, Saudi Arabia.

23-25 September (Monday-Wednesday): Powerlec Bahrain 2024, Manama, Bahrain.

25-26 September (Wednesday-Thursday): Green Steel Summit, Dubai, UAE.

OCTOBER 2024

1-3 October (Tuesday-Thursday): Water, Energy and Environment Technology Exhibition, Dubai, UAE.

1-3 October (Tuesday-Thursday): Cairo Sustainable Energy Week, Cairo, Egypt.

2-3 October (Wednesday-Thursday): World Green Economy Summit, Dubai, UAE.

10-12 October (Thursday-Saturday): The IEEE International Conference on Artificial Intelligence & Green Energy, Yasmine Hammamet, Tunisia.

13-17 October (Sunday-Thursday): Cairo Water Week, Cairo, Egypt.

15-17 October (Tuesday-Thursday): EV Auto Show, Riyadh, Saudi Arabia.

15-16 October (Tuesday-Wednesday): Solar & Storage Live KSA, Riyadh, Saudi Arabia.

NOVEMBER 2024

4-8 November (Monday-Friday): World Urban Forum, Cairo, Egypt.

4-8 November (Monday-Friday): AfricanEnergy Week, Cape Town, South Africa.

6-7 November (Wednesday-Thursday): Renewable Energy Forum Africa, Tunis, Tunisia.

6-7 November (Wednesday-Thursday): Critical Mineral Africa Summit, Cape Town, South Africa.

11-22 November (Monday-Friday) United Nations Climate Change Conference or Conference of the Parties (COP29), Baku, Azerbaijan.

11-14 November (Monday-Thursday): Abu Dhabi International Petroleum Exhibition & Conference, Abu Dhabi, UAE.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

26- 27 November: (Tuesday - Wednesday): World Food Security Summit, Abu Dhabi, UAE.

26-28 November (Tuesday-Thursday): Future Power Expo, Riyadh, Saudi Arabia.

26-28 November (Tuesday-Thursday): Egypt Energy Show, Cairo, Egypt.

27-28 November (Wednesday-Thursday): RAK Energy Summit, Ras Al Khaimah, UAE.

DECEMBER 2024

2-13 December (Monday-Friday): Conference of the Parties (COP16) to the United Nation Convention to Combat Desertification, Riyadh, Saudi Arabia.

3-4 December (Tuesday-Wednesday): MSGBC Oil, Gas & Power 2024 conference, Dakar, Senegal.

JANUARY 2025

12-15 January (Sunday-Wednesday): World Renewable Energy Congress, Manama, Bahrain.

14-16 January (Tuesday-Thursday): World Energy Summit, Abu Dhabi, UAE.

28-29 January (Tuesday-Wednesday): Sustainability Forum Middle East, Riyadh, Saudi Arabia.

FEBRUARY 2025

24-26 February (Monday-Wednesday): Connecting Hydrogen MENA, Dubai, UAE.

24-27 February (Monday-Thursday): Oman Climate Week, Muscat, Oman.

EVENTS WITH NO SET DATE

2024

End-2024: Emirati Masdar’s 500 MW wind farm in Uzbekistan to begin commercial operations.

QatarEnergy’s industrial cities solar power project will start electricity production.

November: Arab Forum for Renewable Energy and Energy Efficiency, Amman, Jordan.

2025

International Union for Conservation of Nature World Conservation Congress, Abu Dhabi, UAE.

UAE to have over 1k EV charging stations installed.

Middle East Electric Vehicle Show, Sharjah, UAE.

2026

26-29 October (Monday-Thursday): World Energy Congress, Riyadh, Saudi Arabia.

UITP Global Public Transport Summit, Dubai, UAE.

Annual Meetings of the World Bank and the International Monetary Fund, Bangkok, Thailand.

1Q 2026: QatarEnergy’s USD 1 bn blue ammonia plant to be completed.

End-2026: HSBC Bahrain to eliminate single-use PVC plastic cards.

2027

MENA’s district cooling market is expected to reach USD 15 bn.

World Water Forum, Riyadh, Saudi Arabia.

2030

UAE’s Abu Dhabi Commercial Bank (ADCB) wants to provide AED 35 bn in green financing.

UAE targets 14 GW in clean energy capacity.

Tunisia targets 30% of renewables in its energy mix.

Qatar wants to generate USD 17 bn from its circular economy, creating 9k-19k jobs.

Morocco’s Xlinks solar and wind energy project to generate 10.5 GW of energy.

2035

Qatar to capture up to 11 mn tons of CO2 annually.

2045

Qatar’s Public Works Authority’s (Ashghal) USD 1.5 bn sewage treatment facility to reach 600k cm/d capacity.

2050

Tunisia’s carbon neutrality target.

2060

Nigeria aims to achieve its net-zero emissions target.

Sections

About

Privacy & Support

Get EnterpriseAM daily