Good morning, friends. We have a meaty issue for you this morning with lots of green finance updates and some M&A news. Let’s jump right in.

THE BIG CLIMATE STORIES- The Saudi Water Partnership Company launched operations at the solar-powered Yanbu 4 desalination plant and British international services company Serco has acquired UAE-based Climatize for an undisclosed amount.

^^ We have the details on these stories and more in the news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- Chile declares state of emergency as forest fires ravage densely populated areas: Chile’s President Gabriel Boric declared a state of emergency on Saturday for two of the country’s provinces as four large wildfires raged across the densely populated Valparaíso region in central Chile, killing at least 56 people as of yesterday. The forest fires have left 372 people missing so far and damaged 1.1k homes, with authorities expecting the death toll to rise as they confirm information from affected areas they have not been able to access yet. The country is experiencing a summer heat-wave, sparking 92 active fires across 43k hectares of land in Chile, of which only 40 have been extinguished as of yesterday. Boric has called for additional military personnel deployments to the affected areas, home to over 1 mn people.

Climate change-driven fires are spreading: The combined impact of global warming and climatic phenomena including El Niño is amplifying the climate crisis, leading to once-in-a-century blazes across several regions globally last year including the US, and the EU, which saw its largest ever wildfire on record. Climate-induced wildfires impacted twice as much tree cover in 2023 compared to observed levels over the past twenty years, driving global emissions up between 10-28% above the 2003-2022 average.

The story made headlines in the international press over the weekend:Reuters | AP News | The New York Times | The Washington Post | CNN | BBC | The Guardian

HAPPENING TODAY-

TheMining Indaba investment event kicks off today at Cape Town, South Africa and runs through to Thursday, 8 February. The conference aims to explore investment paths and support the expansion and transition of Africa’s mining industry. Saudi Arabia’s Ma’aden will be present at the event.

WATCH THIS SPACE-

#1- Egypt creates a CCUS committee to launch decarbonization projects: Egypt is working on establishing a committee made up of experts from the country’s Environment Ministry and the Petroleum and Mineral Resources Ministry to study the feasibility of establishing carbon capture, usage, and storage (CCUS) facilities in oil and gas drilling areas, according to statement released on Friday. The working group will focus on studying funding mechanisms for the potential decarbonization projects, Egypt’s Oil Minister Tarek El Molla added. The country hopes to unveil a CCUS development roadmap during the three-day Egypt Energy Show, the statement notes.

REMEMBER- The country has big CCUS potential: Egypt has significant onshore carbon storage capacity in saline aquifers, which allows for carbon storage without costly offshore infrastructure. If developed, projects can reduce up to 100 tons of CO2 annually, equivalent to 25% of Egypt’s emissions goals defined in its nationally determined contributions.

#2- Morocco plans to increase its green investments to reach 10% of its foreign exchange reserves, Reuters reported on Friday, citing a statement by Morocco's central bank governor Abdellatif Jouahri. The central bank will also advise banks on how to assess the climate-related risks from their major borrowers. The move is part of the country's efforts to combat climate change and mitigate its impacts, especially the recurrent droughts that threaten its agriculture and water supply. Morocco faces a funding gap of USD 78 bn to achieve its climate goals by 2050, according to the World Bank.

REMEMBER- Morocco is already trying to bridge the gap: The World Bank approved a USD 500 mn loan to Morocco in December for enhancing institutional frameworks for disaster and climate risk management and protecting farmers impacted by climate change, especially droughts.

#3- Is Mercedes-Benz going to produce EVs in Egypt? Mercedes-Benz is exploring EV production in Egypt on the back of incentives provided by the Egyptian Automotive Industry Development Program to encourage EV localization, according to an Egyptian cabinet statement released on Thursday, citing comments by CEO of Mercedes Egypt branch Gerd Bitterlich. Mercedes-Benz recently released a range of all-electric sedans and SUVs in Egypt.

#4- French energy giant TotalEnergies is looking to sell a 50% stake in its renewable projects in Europe and the US, Reuters reported on Friday, citing sources familiar with the matter. The portfolio — worth about USD 2.5 bn — includes wind and solar energy projects in the US, Spain, Portugal, France and Greece. The move comes amid rising costs of raw materials and competition in the renewable energy sector, the news outlet explains. Other companies like Iberdrola, Enel, and Repsol also sold stakes in their projects to finance new projects. Iberdrola sold a 49% stake in its Baltic Eagle offshore wind farm to the UAE's Masdar last July.

The higher competition is reflected in the lower PPA prices: European power purchase agreements (PPA) prices for wind and solar energy dipped by an average 2% in 4Q 2023 to EUR 85.4 (USD 92.3) per MWh, Reuters reported on Thursday citing data by green electricity prices tracking platform LevelTen. LevelTen’s study looked at PPA prices for wind and solar energy contracts with a 5-20 year period, and across 18 European countries that it monitors in its market-averaged index.

This spells good news for corporate buyers of green energy: The drop allows corporate buyers to secure green PPAs early in order to catch up to the EU’s directive to have 42.5% of its electricity powered by renewable energy by the end of the decade. This is expected to raise demand — and thus competition — further, which could continue to push prices down.

DANGER ZONE-

#1- Global raw material extraction to surge 60% by 2060: Natural resource extraction — which accounts for 60% of global warming impacts — is expected to rise 60% by 2060 with high probability of triggering more frequent climate disasters globally, The Guardian reported last week, citing a five-yearly UN Global Resource Outlook report. Raw material extraction is already up 400% from 1970 contributing to air pollution, biodiversity loss, and water stress, the report said. Meeting demand for materials critical to the energy transition, such as for EV batteries, will “almost certainly” catalyze more frequent storms and droughts, among other climate phenomena, former EU Commissioner and co-chair of the analysis Janez Potočnik said.

Proposals: The report calls for prioritizing measurements of human wellbeing over GDP growth, as well as efforting a reduction in overall demand instead of ramping up clean energy production. The report also calls for adopting policies to reduce the demand for EV car transport by promoting remote working and increased adoption of cycling and trains. The strategy could see the world push down emissions by over 80% by 2060, cut material and energy demand for mobility by 40%, and for construction by 30%, the UN notes.

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CIRCLE YOUR CALENDAR-

Egypt will host the Egypt Energy Show from Monday, 19 February to Wednesday, 21 February in Cairo. The event will gather 35k energy industry professionals and host over 80 conferences on energy transition and sustainable production.

The UAE will host the Management and Sustainability of Water Resources Conference from Monday, 26 February to Wednesday 28 February in Dubai. Water availability in arid and semiarid regions, global water issues, and future water and environmental challenges are all on the agenda.

Saudi Arabia will host the International Conference on Sand and Dust Storms in theArabian Peninsula from Monday, 4 March to Wednesday, 6 March in Riyadh. The conference will address regional challenges caused by sand and dust storms and discuss monitoring systems, mitigation strategies, economic and infrastructural impacts, and more.

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