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Methanex acquires OCI Global’s methanol business for USD 2.05 bn

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WHAT WE’RE TRACKING TODAY

TODAY: OCI Global offloads methanol business + More green bond issuances for Nasdaq Dubai

Good morning, folks. We have a compact issue this morning with big M&A updates from OCI Global and a smattering of financing stories to unpack.

THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single story shaping the conversation this morning, but Swedish battery developer Northvolt is set to cut costs with layoffs and unit sales amid a slower growth in EV demand, according to a statement. Northvolt said following a strategic review that its focus on sustainable large-scale cell manufacturing would require changes to the size of its workforce. “No final decisions have been made on the precise nature of any resizing,” the company said, saying it aims to “ensure that every effort is made to minimize the need for redundancies.”

A scale back on expansion: Northvolt said it plans to place operations at its Northvolt Ett Upstream 1 cathode active material production facility in Sweden “into care and maintenance until further notice.” It also said it will enter talks with future investors to capitalize the production of battery systems and packs in Poland. It also plans to integrate its California-based subsidiary Cuberg into its operations in Sweden. The story grabbed ink in Reuters, Bloomberg, Financial Times, and CNBC.


WATCH THIS SPACE-

#1- Qatar Investment Authority (QIA) is reportedly seeking the Spanish government’s approval to increase its stake in Spanish utility provider Iberdrola to over 10%, up from the current 8.7% shareholding by the Qatari sovereign wealth fund, Spanish news outlet Okdario reported. No further details were provided on the talks, but Okdiario is suggesting that the QIA wants to be a part of the decision making by the Spanish firm.

QIA and Iberdrola go way back: The QIA’s direct investment arm Qatar Holding became Iberdrola’s largest shareholder in 2011 after it acquired a 6.2% stake valued at EUR 2.2 bn the company. It has since upped its shareholding in Iberdrola. QIA also invested USD 740 mn in 2021 to acquire c. 3.7% of common stock issued by Avangrid — Iberdrola’s controlled subsidiary in the US.

The two partnered on the energy transition in Qatar: Iberdrola and QIA partnered in 2022 to advance the digitalisation of Qatar's electricity sector through the Iberdrola Innovation Middle East center in Doha. The collaboration aimed to enhance solutions in both public and private sectors, focusing on smart grids, renewable energy integration, and energy efficiency.

REMEMBER- QIA is boosting its green portfolio: QIA — which landed a USD 5 bn loan for green investments in late 2022 — acquired a 2.7% stake in India’s Adani Green Energy for c. USD 474 mn in a block transaction last year. It also invested EUR 2.4 bn in German utilities provider RWE in a debt-to-equity swap to own 9.09% of RWE and led a EUR 250 mn series D investment round for Paris-based biotech company Innovafeed in 2022. More recently, QIA invested USD 180 mn in Dublin-based critical minerals investment company TechMet last month.

#2- China to expand carbon market to steel, aluminum, and cement by year-end: China is set to expand its carbon trading market to include steel, aluminum, and cement industries by the end of 2024, Bloomberg reports, citing statements by China’s Ecology and Environment Minister Huang Runqiu. The move comes under efforts by Beijing to help producers of those industries handle the incoming Carbon Border Adjustment Mechanism (CBAM) from the EU starting 2026. The plan sees the addition of seven more sectors to the country’s three-year carbon market — which currently covers about 2.2k power utilities — to help China cover 70% of its total emissions by 2030.

REMEMBER- CBAM is the world’s first CO2 border tax: The EU launched the first phase of the world’s first carbon border tax last year, requiring importers to report emissions from products sold in Europe or risk fines. The CO2 levy will require firms importing steel, cement, aluminum, electricity, fertilizers, and hydrogen into the EU to report CO2 emitted during manufacturing, and eventually charging pollution fees on those products by 2026. The planned tariff has caused disquiet among trading partners, especially Turkey, Ukraine, China, and Russia.

ALSO- China is looking to Norway for green energy cooperation: China is open to cooperating with Norway on green energy, environmental protection, and electric vehicles, Chinese President Xi Jinping told Norwegian PM Jonas Gahr Stoere during a meeting in Beijing, Reuters reports.

#3- The US is looking to establish a sovereign wealth fund: The Biden administration is considering setting up a sovereign wealth fund to make investments in strategic sectors, Financial Times reported earlier this week, citing statements by an unnamed White House official. The official said the initiative, led by senior officials from the White House, aims to provide the US with flexible capital to compete with geopolitical rivals such as China and Russia.

Behind the move: The proposed sovereign wealth fund comes as the US “lacks a pool of patient and flexible capital that could be deployed at home and abroad to advance strategic interests . . . at the pace and scale needed for the US to prevail in a contested geopolitical environment,” the official said. The official added that the fund could support supply chain resilience and finance “illiquid but solvent companies that need greater scale to compete against [China] rivals.” The fund could also inject capital in specialized shipbuilding, nuclear fusion and critical minerals, the official said.

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CIRCLE YOUR CALENDAR-

The UAE will host the World Utilities Congress from Monday, 16 September to Wednesday, 18 September in Abu Dhabi. The event will gather global energy leaders, policymakers, and other industry professionals from the power and water utilities value chain to discuss industry trends and challenges.

Saudi Arabia will host the EV Auto Show from Tuesday, 17 September to Thursday, 19 September in Riyadh. The show offers a platform for participants to learn about the latest EV technologies and services.

Tunisia will host the Decarbomed Forum from Tuesday, 24 September to Wednesday, 25 September in Tunis. The forum will showcase innovative solutions for transitioning to carbon neutrality in Tunisia and the Mediterranean region, focusing on helping businesses take advantage of new tech, renewable energy services, and green financing mechanisms to decarbonize operations.

The UAE will host the Green Steel Summit from Wednesday, 25 September to Thursday, 26 September in Dubai. The event will bring together steel industry professionals and decision makers to discuss market intelligence and the latest technological developments in sustainable steelmaking.

Egypt will host the Portfolio Egypt conference on Monday, 30 September in Cairo. The event aims to enhance cooperation among Arab stock exchanges and will cover crucial topics including market integration, product diversification, carbon markets, and regional debt markets. It will aim to outline recommendations to strengthen regional financial markets.

Egypt will host Cairo Sustainable Energy Week from Tuesday, 1 October to Thursday, 3 October in Cairo. The event will bring together policymakers, companies, and experts to discuss collaboration on the renewable energy transition across 17 Arab countries.

The UAE will host the World Green Economy Summit from Wednesday, 2 October to Thursday, 3 October in Dubai. The summit will promote the push for a green economy and will offer a platform for international entities to collaborate on sustainable development, financing, and policymaking.

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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M&A WATCH

Methanex acquires OCI Global’s methanol business for USD 2.05 bn

OCI sells methanol business to Methanex for USD 2.05 bn: Sawiris-backed, Netherlands-headquartered chemicals company OCI Global has sold its entire methanol business — operating in the US and Europe — to Canadian methanol producer Methanex in a USD 2.05 bn agreement, according to a press release (pdf). The transaction is set to be completed in 1H 2025, pending regulatory and shareholder approvals.

What we know: Methanex will make the purchase by paying USD 1.15 bn in cash, in addition to the issuance of 9.9 mn of its shares valued at USD 450 mn, giving OCI a 13% ownership of the company to make it the second largest shareholder. The share purchase aims to help the firms improve their joint operations, as well as consider potential further investments in the methanol industry cycle.

That’s not all: The sale also includes OCI Methanol’s 50% stake in Natgasoline — a JV with Proman — which is subject to the settling of an ongoing lawsuit. The Natgasoline facility — which has been in operation is located in Beaumont, Texas, has been commercialized since 2018 and has an annual capacity of 1.7 mn tonnes of methanol, of which Methanex’s share will be 850k tonnes.

The green connection: OCI Methanol is a major distributor of and producer of green methanol through OCI Hyfuels, with potential for renewable natural gas trading as well. OCI has been restructuring and selling its assets to cut down on debt, returning capital to shareholders, and dedicating raised funds to greener chemicals such as low-carbon ammonia, Reuters writes. OCI’s divestitures as of late have generated around USD 11.6 bn of expected tax-free gross proceeds, CFO Hassan Badrawi said.

Methanex is no stranger to the region: Methanex Egypt was the first to operate a methanol production facility in Egypt in 2011, with a current capacity of 1.3 mn tons per year. Egyptian Oil Minister Karim Badawi met with Methanex officials earlier this week to discuss opportunities to locally produce green methanol. Methanex Egypt is 50% owned by Methanex Corp, while Egyptian state institutions hold 33% and Saudi-based Apicorp owns the remaining 17%.

REMEMBER- Sawiris has big restructuring plans for OCI: Egyptian b’naire Nassef Sawiris — who owns a 38.8% stake in the firm — said he was considering overhauling OCI GlobaI in February, with one of the options being turning the empire into a cash-shell company pursuing acquisitions in new industries. The company sold its blue ammonia project in Texas to Woodside for USD 2.35 bn in August and sold its 50% +1 stake in Fertiglobe — their JV with Abu Dhabi National Oil Company — to Adnoc for AED 13.28 bn (USD 3.62 bn) last December, with the acquisition expected to close later this year. OCI also sold 100% of its USD 3.6 bn stake in the US crop nutrient unit Iowa Fertilizers to US’ Koch Ag & Energy Solutions in the same month.

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DEBT WATCH

Bank of China lists USD 400 mn green bond on Nasdaq Dubai

Bank of China lists green bonds on Nasdaq Dubai: Bank of China, one of China’s four largest commercial banks, listed a USD 400 mn green bond issued by its Dubai branch on Nasdaq Dubai, according to a statement. The issuance is part of the lender’s USD 40 bn medium-term note programme.

The details: Net proceeds of the bonds, which will have a maturity of three years, will be used to finance or refinance eligible green projects, according to the statement. The fresh listing brings the bank’s listings from its Luxembourg and Dubai branches on Nasdaq Dubai to USD 1.47 bn.

With a boost for ESG-related issuances on Nasdaq Dubai: The listing brings Nasdaq Dubai’s ESG-related issuances to USD 30 bn and total value of listed bonds to USD 41 bn, according to the statement. Nasdaq Dubai said the listings contribute “to the exchange’s growing standing as a global leader in fixed income listings and a central hub for sustainable financial instruments.”

REMEMBER- Kuwait’s Warba Bank listed its USD 500 mn green sukuk on Nasdaq Dubai last month. Indonesia also listed in July a three-tranche global sukuk issuance totalling USD 2.35 bn on Nasdaq Dubai, including a USD 600 mn green sukuk tranche. Emirates Islamic recently listed its debut USD 750 mn five-year senior sustainability sukuk on the exchange.

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DEBT WATCH

EBRD extends USD 60 mn loan for 116 MW Turkish wind energy project

EBRD extends financing for Turkish wind project: The European Bank for Reconstruction and Development (EBRD) is providing a USD 60 mn (EUR 55 mn) loan to Turkish renewable energy firm Borusan EnBW Enerji for building a 116 MW onshore wind energy project in Sivas and Tekirdağ, according to a statement.

Details are scant: The Balabanli wind-energy power plant’s (WEPP) capacity extension and Pelit WEPP would help generate 382 GWh of renewable energy, according to the statement. Such expansions could help slash CO2 emissions by 243k tons annually.

About the company: Borusan EnBW Enerji — a joint venture between Turkish conglomerate Borusan Holding and German energy supplier EnBW — is one of Turkey’s leading energy firms with a focus on onshore wind energy. It currently operates 730 MW of renewable installed capacity with plans to reach 935 MW after the completion of its current projects.

More funding needed for net zero: Turkey has set an ambitious target to reach net zero by 2053 which will require USD 10 bn in financing annually through 2030, EBRD notes in the statement.

EBRD 💚Turkey: The EBRD invested USD 90 mn in Turkish multinational snack manufacturer Ulker’s first sustainability-linked Eurobond issuance last month. It also provided a USD 25 mn loan to Turkish leasing firm Garanti Finansal Kiralama last year for on-lending to green businesses. Turkey’s Galata Wind also secured a USD 45 mn loan from the bank in November 2022 to finance up to 50 MW of capacity expansions in two wind power plant projects in Mersin and Balikesir.

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ALSO ON OUR RADAR

Iran connects 25 MW solar farm to national power grid

SOLAR-

25 MW solar farm in Iran comes online: Iran has connected a 25 MW solar farm in the Kerman province to the national power grid earlier this week, Tehran Times reported earlier this week, citing the country’s state broadcaster IRIB. The project, set up on 42 hectares of land, comes under Iran’s efforts to enhance renewable energy capacity.

We knew this was coming: Iran’s Small Industries and Industrial Parks Organization head Ruhollah Ebrahimi said in February that the government was developing five solar parks in its Qazvin and Kerman provinces as part of a broader plan to establish 17 solar parks in six provinces. Iran plans to export any excess electricity generated from the project to neighboring countries including Turkey, through their connected grids, according to the official. The country had planned on installing 4 GW from solar power plants last year.

MANUFACTURING-

Morocco could be getting a new anode factory: UAE’s Falcon Energy Materials signed a technical and strategic partnership with China’s Hensen Graphite & Carbon Corporation to develop an anode plant in Morocco, according to a statement. The preliminary economic assessment (PEA) for the plant is expected in Q4 2024, targeting an annual production of 25k tonnes of coated spherical purified graphite (CSPG). The PEA will allow Falcon to assess the economic feasibility of the project and advance talks with its financial partners and local authorities in Morocco.

The details: Falcon will utilize the design, procurement strategy, and supply chain infrastructure from Hensen's recently constructed Weihai Plant in China to minimize development and operational expenses, according to the statement. Falcon is also progressing discussions with several of its strategic partners to supply CSPG to western battery markets. The potential commercial partner will handle the integration of Falcon within the battery supply chain, ensuring the CSPG meets end-user specifications.

Not Morocco’s first anode plant: Chinese EV battery components maker BTR New Material plans to build a USD 366 mn lithium-ion battery anode plant in the North African country. The factory will have a production capacity of 60k tons of the anode materials annually and will be located in Tangier Technology City. It will take two years to build.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

  • SEC advances its ESG rating: The Saudi Electricity Company (SEC) has improved its Environmental, Social, and Governance (ESG) rating by 43% in 2024. The improvement, reported by global credit rating agency Standard & Poor's, raised SEC's score from 35 to 50. (Statement)
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AROUND THE WORLD

China to establish USD 1.4 bn lithium miner

China to set up USD 1.4 bn lithium miner: State-owned China Minmetals announced plans to develop a CNY 10 bn (USD 1.41 bn) miner in lithium-rich Qinghai under a joint venture with several local firms, Reuters reports. The JV — which was provisionally named China Salt Lake Industry Group — will develop a production hub aimed at boosting potassium and lithium resources — two key inputs in electric vehicle batteries. The JV will acquire a 12.54% stake in Qinghai Salt Lake Industry, which controls the country’s most potassium and lithium resources. Minmetals plans to invest CNY 5.3 bn in the JV.

Italy starts preliminary talks to set up a nuclear power company: Italy began initial discussions with Ansaldo Nucleare, Enel, and Newcleo to establish a new company tasked with developing small nuclear reactors, Bloomberg reported earlier this week, citing people it says were familiar with the matter. Italy’s Industry Minister Adolfo Urso said the country was looking to establish the new firm with a foreign technological partner, yet did not disclose the identities of firms said to be involved in the talks. The government is also working on new legislation to be announced later this year to reintroduce nuclear energy after banning the tech for decades.

Nuclear power is gaining traction globally: Poland said it is allocating PLN 4.6 bn (c. USD 1.2 bn) to start work on its first nuclear power plant last month. China also recently approved the construction of 11 nuclear reactors across five sites for a total of CNY 220 bn (c. USD 31 bn). Turkey is also looking to build its second nuclear plant with Russia’s state-owned power company Rosatom being the leading bidder for the project.


India’s Suzlon Group secures country’s largest wind energy order: India’s largest renewable energy solutions provider Suzlon Group secured a 1.16 GW wind energy order from NTPC Green Energy — the renewables arm of India’s largest energy producer NTPC, according to a statement. The order will see Suzlon install a total of 370 wind turbine generators across three sites in Gujarat with the electricity generated sufficient to power 3 mn homes. The order brings Suzlon’s cumulative order book close to 5 GW, according to the statement.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

  • Panasonic to start producing next-gen EV batteries: Panasonic Energy — a unit of Japanese electronics giant Panasonic Holdings — has finalized preparations for the mass production of its 4680 lithium-ion EV batteries at its renovated plant in Wakayama. The new batteries, which have five times the capacity of the smaller 2170 cells, are expected to extend the driving range of EVs and reduce the number of cells needed for battery packs. (Statement, pdf)
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ON YOUR WAY OUT

MENA could help Europe decarbonize bread production

Europe needs to accelerate its efforts to produce low-carbon bread to help meet its emissions targets, Financial Times reports, citing statements by Norwegian fertilizer maker Yara International head Svein Tore Holsether. The fertilizers needed for wheat production contribute nearly half of the emissions from the production of a loaf of bread, Holsether said. Decarbonizing the process is easy but needs financial support from governments to make green fertilizers financially attractive as the current market conditions make it challenging.

Yara is leading the efforts in the push for green fertilizers: Yara International is addressing the issue with green fertilizer initiatives, including the opening of Europe’s largest green hydrogen and ammonia plant in Norway, Holsether said. The company also signed an agreement in July with Norwegian firm Scatec to set up a green ammonia plant in Egypt’s Damietta with initial investments of some USD 890 mn

And lining up supply agreements in our region: The company signed an offtake agreement for green ammonia with Green Hydrogen and Chemicals Company — a subsidiary of Indian renewable energy company Acme Cleantech — last March to buy 100k tons of green ammonia annually from its Oman plant. Yara also recently signed a term sheet with AM Green's green ammonia production division Greenko ZeroC for the supply of green ammonia from India.

But challenges remain: The production of green ammonia is more expensive due to the use of renewable energy. Many green hydrogen projects have been shelved, with less than a third expected to be operational by the end of the decade. Such obstacles in advancing the production of green ammonia “should not be underestimated”, Holsether said as he highlighted the higher costs of renewable energy in Europe and the lack of investment in renewable energy as significant barriers.


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.

24- 25 September (Tuesday - Wednesday): Decarbomed Forum, Tunis, Tunisia.

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

30 September (Monday): Portfolio Egypt 2024, Cairo, Egypt.

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.

10-12 October (Thursday-Saturday): EVs Electrify Egypt Summit 2024, Cairo, Egypt.

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.

16-17 October (Wednesday-Thursday): Upscaling Investment on Small-Scale Renewable Energy in Rural Areas Forum, Tunis, Tunisia

17-19 October (Thursday-Saturday): Africa Solutions Week 2024, Rabat, Morocco.

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.

19-22 November (Tuesday-Friday) Aquaculture Africa 2024, Hammamet, Tunisia.

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.

10-12 December (Tuesday to Thursday): International Mangrove Conservation and Restoration Conference, Abu Dhabi, UAE.

JANUARY 2025

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

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

14-16 January (Tuesday-Thursday): Future Minerals Forum, Riyadh, Saudi Arabia.

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

FEBRUARY 2025

23-25 February (Sunday- Tuesday): Global Water Energy and Climate Change Congress, Manama, Bahrain.

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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