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Indonesia lists USD 600 mn green sukuk on Nasdaq Dubai

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WHAT WE’RE TRACKING TODAY

TODAY: Indonesia ?Nasdaq Dubai + Beijing courts PIF investments

Good morning, friends. It’s a brisk issue as we head off into the weekend, with some big green sukuk news emerging from UAE and a few investment and financing updates from Saudi. First, let’s check in on the latest from the China-EU trade skirmish…

THE BIG CLIMATE STORY OUTSIDE THE REGION- China launches tit-for-tat trade probe: China’s Commerce Ministry has launched a formal trade and investment barrier investigation into the EU’s anti-subsidy probe of Chinese companies to evaluate whether they constitute a trade barrier. China is accusing the EU of protectionism and “reckless distortion,” and will probe sectors including rail, solar, and wind power. The investigation will run until 10 January, possibly extending for three months beyond that.

REMEMBER- The EU has been putting pressure on Chinese imports: The EU launched a probe last year into Chinese subsidies for EVs in efforts to ward off a flood of cheap imports, claiming prices were being kept “artificially low.” The EU also recently officially imposed tariffs of 17.4% to 37.6% on Chinese electric vehicle imports. Tariffs are on provisional status for the next four months before becoming “definite” as the talks between both sides continue and the EU anti-subsidy investigation continues.

The story made headlines in the international press: Reuters | AP | Bloomberg | CNN | Deutsche Welle


WATCH THIS SPACE-

#1- Tunisia reviews AfDB water resilience loan: The Tunisian Assembly of People’s Representatives is reviewing a bill to approve the EUR 81.9 mn loan and guarantee agreement between Tunisia and the African Development Bank (AfDB) for a wastewater treatment project, Tap reports. The loan — which will be awarded to the National Sanitation Board — will improve sanitation services across ten governorates by updating equipment and installing solar panels and generate treated water for agricultural use.

This has been in the works: AfDB signed off on the loan and guarantee agreements to help finance Tunisia’s Treated Wastewater Quality Improvement Project For Climate Resilience Building in January. The project — which will be implemented from 2024 to 2028 — involves upgrading Tunisia’s electromechanical and electrical equipment by introducing 13 solar farms with a combined 6 MW capacity to power 19 wastewater treatment capacity across 11 governorates in the country.

#2- Beijing is urging the Public Investment Fund to expand green investments in China, Reuters reports, citing China’s official Beijing Daily newspaper. China is looking to convince the PIF to increase its business activities in the Chinese capital, especially in the industrial investment, green development, and energy transition sectors, Beijing’s Mayor Yin Yong told PIF boss Yasir Al Rumayyan. The PIF governor said that Riyadh is interested in an ongoing collaboration with Beijing, particularly in sustainable development and renewable energy.

This comes as part of China’s diversification strategy: This appeal is part of Beijing's broader diplomatic strategy to enhance ties with countries in Europe, the Middle East, and Africa as a countermeasure to what China perceives as the US’ weaponization of economic policies, the news outlet added.

PIF has been active in China: The sovereign wealth fund has been eyeing a USD 250 mnstake in Chinese electric car manufacturer Human Horizons since last November. The fund also signed a Joint Development Agreement with Chinese solar PV manufacturer LONGi Green Energy Technology back in January 2023.

IN OTHER SAUDI NEWS- Long awaited eVTOLs are coming: Flagship carrier Saudia is reportedly close to formalizing a framework agreement with Germany-based air taxi developer Lilium to purchase some 100 electric jets, Reuters reports, citing a source with knowledge of the matter. Lilium plans to announce the order by Saudia at its headquarters near Munich on Thursday, 18 July. The framework agreement was signed in October 2022.

#3- Public markets are undervaluing clean energy companies which hampers the green transition, CEO of Abu Dhabi Investment Authority-backed ReNew Energy Global Sumant Sinha told The Financial Times. Clean energy companies are not being rewarded for their growth and scale, with new equity raised in public markets dropping from USD 68 bn in 2022 to USD 33 bn in 2023, FT writes. Clean energy stocks have fallen 28% since last year, the news outlet added, citing the S&P Global Clean Energy Index. Concerns over high interest rates in the US have contributed to a sell-off in clean energy stocks, prompting ReNew Energy to consider moving its listing from Nasdaq.

ReNew has regional ties: ReNew Energy — formerly calledReNew Power — has been exploring investments in green hydrogen projects in Egypt. The company plans on diversifying its operations to the Middle East, North Africa, India and Australia, and investing in countries rich in natural resources, with a proximity to global markets, and a competitive price for land.

With some projects currently in the works: ReNew is already scheduled to break ground on its USD 8 bn green hydrogen plant in Egypt’s Suez Canal Economic Zone this year. This comes after El Sewedy Electric and ReNew signed a framework agreement with the government to generate 570 MW of renewables to be used for the production of 20k tons of green hydrogen during its pilot phase. The green hydrogen will be used as feedstock to generate 100k tons of green ammonia.

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CIRCLE YOUR CALENDAR-

Egypt will host the Egypt Mining Forum from Tuesday, 16 July to Wednesday, 17 July in Cairo. The event will convene decision-makers from government, industry experts, new exploration firms, financiers, and investors to explore the challenges and advantages to establish Egypt as a leading global mining hub by 2040.

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.

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CAPITAL MARKETS

Indonesia lists USD 600 mn green sukuk on Nasdaq Dubai

Indonesia lists green sukuk on Nasdaq Dubai: The Republic of Indonesia has listed a three-tranche global sukuk issuance totalling USD 2.35 bn on Nasdaq Dubai, including a USD 600 mn green sukuk tranche, according to a statement.

What we know: The issuance — listed on the Singapore Exchange in a dual listing — was 1.9x oversubscribed with the order book reaching a total of USD 4.5 bn, Indonesia’s Ministry of Finance said in a press release. The tranches are set to get a rating of Baa2 by Moody’s Investor Service, BBB by S&P Global Ratings Services, and BBB by Fitch Ratings.

About the green sukuk: The USD 600 mn green sukuk tranche is due 2054 with a 5.5% yield, according to the ministry. The sukuk attracted global investors with 34% of the issuance being distributed to Asian investors, 27% to the US, 29% to Europe and 9% to the Middle East and Malaysia. Out of the three tranches issued, the green sukuk had the longest maturity date and lowest value.

Advisors: Citigroup, Dubai Islamic Bank, HSBC, Mandiri Securities, and MUFG were tapped as joint lead managers and bookrunners. HSBC and MUFG were appointed as joint green structuring advisors. PT BRI Danareksa Sekuritas and PT PT Trimegah Sekuritas Indonesia Tbk acted as co-managers.

Nasdaq Dubai has been on a roll: Over 50% of globally issued USD-denominated sustainable ESG sukuk have been listed on Nasdaq Dubai during 1Q 2024. The exchange also welcomed sustainability-linked USD 750 mn sukuk from Emirates Islamic last month, USD 1 bn green sukuk from Dubai Islamic Bank in February, and USD 600 mn green bonds from China Construction Bank.

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The Macro Picture

Recent heat waves spell trouble for global trade and laborers

Extreme heat will bring major losses to workers health + economic productivity: With the world once again on track for its hottest year on record, public health experts are raising alarms about the dangers of extreme heat — especially for laborers, a recent deep-dive by Reuters explained. A 1°C rise in temperature could result in a 2% decline in overall economic activity on the back of a predicted decrease in worker productivity, the World Bank (WB) warned. More frequent and extreme heat waves — including in the Middle East where some areas are experiencing record temperatures of almost 50°C months ahead of the usual peak — are also threatening the shipping, logistics, and agricultural sectors, which will further shrink the economy.

What’s at risk? Heat-related deaths have risen by 70% among those over 65 in the last two decades with around 37% of these deaths attributed to human-induced climate change, according to the World Health Organization. Heat-related illnesses — such as heat exhaustion and heat strokes — pose significant risks, especially for those with pre-existing health conditions. The WHO projects an additional 250k deaths yearly by the 2030s due to climate-related impacts on diseases and coastal flooding.

How does the extreme heat affect labor? The brunt of the impact falls on outdoor workers in industries like construction, agriculture, and transportation, the WB said. Heat stress led to a 5% decline in global working hours in 2019, translating to a loss of 152 mn full-time jobs as well as decreased wages for workers. The heat also increases workplace injuries, with a 6% rise in non-heat-related incidents on days where temperatures surpass 37.7 °C, affecting lower-income workers the most, according to the Bank.

The trend is expected to continue: By 2030, it’s projected that over 2% of total working hours globally will be lost due to heat stress, equating to a productivity loss of 80 mn full-time jobs, a study by the International Labour Organization (ILO) found. This loss is particularly severe in Southern Asia and Western Africa, where productivity loss may reach 5%. In India, a 1°C temperature increase could diminish plant output by 3.5%, while in the US, car manufacturing facilities could see an 8% drop in output during weeks with multiple days over 32.2°C, the WB added.

The financial impact will be major: The financial loss due to heat stress is expected to reach USD 2.4 tn by 2030, even if global warming is limited to 1.5°C above pre-industrial level. India could lose over 101 bn labor hours annually due to the rising heat. Ins. company Lloyd's estimates a USD 5 tn loss over five years due to extreme weather-induced food and water shortages.

And it’s not just people: Shipping and logistics industries face significant challenges due to the rising temperatures, with reduced vessel transits in the Panama Canal due to drought, according to the Allianz Commercial report. Infrastructure is also affected as heat compromises the integrity of power lines, concrete, and transport systems. The insurance sector is also feeling the heat, with outdated risk models struggling to keep up with the changing climate landscape.

Heat waves are also threatening the agriculture sector: The extreme heat disrupts agricultural yields, with potential reductions in wheat, rice, and maize, and affects livestock and fisheries, leading to increased mortality and lower production, according to the International Institute for Sustainable Development. The effects extend to food storage and transport, resulting in significant losses and waste. This causes the poorest populations to face “heatflation,” where rising food costs push mns into extreme poverty.

Things could get worse as climate change exacerbates heat waves: Cyclical naturally occurring weather phenomena like El Niño and La Niña interact with climate change making weather events more severe with more intense heat waves, droughts, wildfires, downpours, and snowstorms, according to the Royal Society. Recent research has shown that its impacts are likely to hit harder and more frequently as the planet continues to heat up and global surface temperatures will rise by about 0.1 °C during the years the phenomenon occurs, with some scientists warning global average temperatures could tip off the 1.5 °C limit.

What can be done? Governments play a key role by setting regulations that encourage businesses to change their practices, ILO adds. However, employer and worker organizations are equally important to implement the needed changes including enforcing safety standards, improving heatwave warning systems, and expanding social safety nets. International guidelines can help governments design effective national policies to protect workers from heat stress.

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ALSO ON OUR RADAR

Finance, policy, and waste management updates from UAE and Saudi

DEBT WATCH-

Tadweer + Ewec’s waste-to-energy project is getting a green loan: The UK’s Standard Chartered Bank will lead the financing for Abu Dhabi’s first large-scale waste-to-energy project, developed by Tadweer Group and Emirates Water and Electricity Company (Ewec), according to a press release. The bank will take on multiple roles for Tawdeer’s first green financing, including being the pre-bid lead bank, the documentation bank, the bookrunner, an initial mandated lead arranger, green loan coordinator, hedging bank, sole VAT lender, sole equity bridge loan lender, hedge bank, global facility agent, commercial facility agent, and offshore and onshore security agent, according to the statement.

About the project: The facility will process 2.7k tons of municipal solid waste daily, or 900k tons per year. It aims to divert 80% of Abu Dhabi's waste from landfills by 2030, saving up to 1 mn tons of CO2 annually. No value was revealed for the green loan. The project will be developed in collaboration with a Japan-based consortium.

GREEN POLICY-

UAE launches national green certificates program: The UAE’s Ministry of Energy and Infrastructure (MoEI) has kicked off its National Green Certificates Program aimed at fostering environmentally friendly building practices, according to a press release. The program establishes standards for energy efficiency, water management, indoor air quality, and sustainable materials in buildings. MoEI will also offer technical support and consultations to participating businesses to ensure sustainability standards are met. The initiative comes inline with the UAE’s National Demand-side Management Program (pdf) and National Green Building Regulation.

UAE signed four MoUs to set the program in motion: The MoEI inked four MoUs “to support the program,” the statement added. The first agreement was signed with First Abu Dhabi Bank to collaborate on green finance solutions for the built environment sector, the second with Aldar Properties for the implementation of green finance solutions and technical services, the third with Pact Carbon for assistance in accessing the global carbon credit market, and lastly with Meagle Energy for energy auditing, measurement, and verification services.

ALSO- Abu Dhabi launches Energy Efficiency Clubs: Abu Dhabi National Energy Company (Taqa) subsidiary the Abu Dhabi Distribution Company (ADDC) launched the Energy Efficiency Clubs initiative in collaboration with Agthia Group, Emirates Float Glass Company, and Arabian Gulf Steel Industries Company, Wam reports. The initiative aims to encourage unified sustainable action to increase energy efficiency and reduce costs and environmental footprint in Abu Dhabi by bringing industry leaders together through the joint platform.

WASTE MANAGEMENT-

Saudi allocates 11k sqm for waste processing facility: The Saudi Authority for Industrial Cities and Technology Zones (Modon) has partnered with Wazeen company to allocate an 11k sqm industrial land for a facility specializing in the treatment and recycling of hazardous medical waste, according to a statement. The SAR 28 mn facility will be located at Jeddah’s Third Industrial City.

Modon has been active: The company — a subsidiary of the Riyadh-based water treatment company Miahona — signed an agreement with Chinese solar equipment maker Arctech Solar to build a factory in Jeddah capable of making solar panels with 3 GW of annual production capacity in April. The two also partnered to develop a facility for the production of smart solar trackers and building-integrated solar photovoltaic systems in Jeddah's Second Industrial City in May.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

  • Jordan opens first fully EV charging station: Jordan inaugurated the kingdom’s first fully electric vehicle charging station in south Irbid. The country has plans to open additional charging stations in Irbid and other governorates. The Board of Commissioners of Energy and Minerals Regulatory Commission has already issued 350 permits for new stations. (The Jordan Times)
  • Oman is getting its first electric public bus soon: Oman's Mwasalat and the Oman National Transport Company will launch the sultanate’s first electric public bus after receiving funding from Al Maha Petroleum and Sohar International Bank. (Times of Oman)
  • EVs are picking up in Egypt: Egypt licensed a total of 430 electric vehicles in June including 90 Volkswagen EVs, followed by 71 Mercedes-Benz vehicles, 70 BMW vehicles, 51 BYD vehicles, and 14 Tesla and Kia vehicles each. (Ahram Auto)
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AROUND THE WORLD

Microsoft to purchase carbon credits from Occidental

Occidental to sell Microsoft carbon credits to offset data center emissions: US-based oil giant Occidental Petroleum’s carbon capture, utilization, and sequestration unit 1PointFive signed an agreement with US tech company Microsoft to sell 500k metric tons of carbon credits over six years, Reuters reported earlier this week. The credits will be provided by 1PointFive’s Stratos facility in Texas that was developed with BlackRock to capture 500k metric tons of CO2 annually. The value of the transaction — the largest of its kind to date — was not disclosed. This comes in efforts to reduce its growing emissions driven by AI, which Microsoft reported increased by 30% since 2020. Microsoft committed to being carbon negative by 2030.

REMEMBER- Occidental has its eyes on MENA: The company’s Omani subsidiary Oxy Oman signed an agreement last November with state-owned OQ Gas Networks to conduct studies for establishing carbon capture projects in the sultanate. The company also signed an agreement with Adnoc earlier in August to assess the feasibility of establishing what they said could be the first megaton DAC project outside of the US with a 1 mn ton annual carbon sequestration capacity.

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ON YOUR WAY OUT

A new recycling method can break down old clothes into useable polyester

A team of US researchers have developed a chemical-processing technique that can break down old textiles into reusable polyester, according to a study (pdf). The technique — called microwave-assisted glycolysis — can be used to reduce waste in the textile industry where less than 1% of material is recycled and almost 75% ends up in landfills or incinerated. Upon development, the new process could recycle 88% of clothing worldwide, the research concluded.

How it works: The chemical process can break down 90% of polyester into a molecule called BHET which can be used to make more polyester textiles. The reaction does not impact cotton, which allows polyester-cotton blends to be recycled as well. The process takes around 15 minutes — a lot more cost-effective than other methods that can take days — and works on a variety of other textiles including nylon and spandex.

Better than mechanical recycling: The chemical processing technique is able to break down fabrics with different compositions which overcomes a problem mechanical recycling techniques encounter where they struggle to separate multi-fibre textiles into reusable products, the study explains.

They’re still working out the kinks: Some polyester materials — that are dyed or treated — produced lower levels of BHET making it harder to recover. The research team is working to optimize the results and reduce the processing time down to mere seconds.

REMEMBER- Textile waste is a growing problem: Textile waste averages some 4 mn tons annually in the EU, and in the US reached 17 mn tons in 2018 — an 80% increase above levels recorded in 2000.


JULY 2024

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

10-11 July: (Wednesday-Thursday): Global EV & Mobility Tech Forum, Riyadh, Saudi Arabia.

16-17 July (Tuesday-Wednesday): The Egypt Mining Forum, Cairo, Egypt.

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.

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.

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.

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.

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