👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at new ways in which the Middle East is grappling with climate change, takeaways from “Summer Davos” in China, the deep tech conference ADQ is planning in Abu Dhabi and the returns Blackstone is enjoying in India. But first, ADNOC is loosening the strings of its $150 billion purse.  

The decision by the UAE’s national oil company ADNOC to move from operating simply as a domestic oil producer to becoming an international dealmaker comes straight from the top – and progress this week on a $12.5 billion takeover of German chemicals giant Covestro may burnish its reputation.  

UAE President Sheikh Mohamed bin Zayed chaired a November 2022 board meeting where he approved a $150 billion five-year capital spending plan to transition the company from a traditional state oil firm into a diversified, multinational energy company. 

When the Covestro deal appeared to stall in recent months, ADNOC raised its bid after seeking approval from MBZ, Bloomberg reports. The negotiations took place against a backdrop of accelerating deal activity at ADNOC and its alternative energy company, Masdar, in which it owns a 33% stake. 

Masdar finds itself in a bidding war right now to acquire Spanish renewables firm Saeta Yield from Brookfield. In the last year it has bought a renewable energy company in Greece and announced a deal to purchase a 50% stake in Terra-Gen, one of the largest private renewable energy producers in the U.S. The ink dries on these agreements as ADNOC is boosting production capacity and Masdar is looking to develop or acquire an energy portfolio of at least 100 GW capacity by 2030.

SIZZLING SERMONS

From Saudi Arabia’s Red Sea resorts to Dubai’s neighborhood mosques, the season’s searing temperatures are forcing nations across the Middle East to reevaluate the impact climate change could have on their people and economies. Following the deaths of more than 1,300 pilgrims who made the hajj this month to Mecca, authorities across the region are taking steps to protect worshippers from heat that often exceeds 50 Celsius (122 F). In the UAE, mosques have been instructed to limit their Friday sermons and prayers to no more than 10 minutes because of the scorching sun. The New York Times published a story on Thursday suggesting that global warming could undermine some of the ambitious tourism, sports and industrial projects now underway across the Gulf, including Saudi Arabia’s Neom mega-development and the string of luxury hotels under construction on the banks of the Red Sea. In North Africa, the unrelenting dry weather has depressed harvests of fruit for export while requiring Morocco to spend record sums on wheat imports, Bloomberg reports.

SUMMER DAVOS

As Gulf investors are increasingly looking to China for investment targets, “Summer Davos” concluded in the port city of Dalian, China on Thursday. Chinese Premier Li Qiang addressed the opening of the 15th Annual World Economic Forum’s Meeting of the New Champions urging more scientific and technological exchanges. Behind closed doors, Qiang told the executives and policymakers gathered to keep faith in the world’s second-largest economy, the Financial Times reports. Last year Abu Dhabi sovereign wealth fund Mubadala opened a Beijing office. Group CEO Khaldoon Al Mubarak said in February that China’s economic slowdown and huge infrastructure needs make its companies especially ripe for investment. “It’s actually quite cheap and I think for an investor that’s looking at a 5, 10-year horizon, there’s an interesting opportunity for sure there.”

Public Investment Fund: Saudi Power Procurement Co. has signed power purchase agreements worth $3.28 billion for three new solar projects with a capacity of 5.5 gigawatts, the Saudi energy ministry said on Wednesday. The agreements are with Saudi renewable energy utility ACWA Powe, Badeel, which is wholly owned by the PIF, and Aramco Power. 

Mubadala: Abu Dhabi’s second-largest sovereign wealth fund hosted a session at Bloomberg Invest in New York earlier this week on the role of private capital in technology innovation. Deputy Chief Communications Officer Umayma Abubakar emphasized the role of strategic partners in her opening remarks.

ADQ: ADQ will delve into investment opportunities in frontier technologies like artificial intelligence, advanced materials, genomics and quantum computing at XPANSE 2024. The November conference hosted by the Abu Dhabi sovereign wealth fund will take place at the Abu Dhabi National Exhibition Center, which ADQ owns.

⚗️ Chemical Reaction: France’s Saint-Gobain has entered into an agreement to buy Dubai-based construction chemicals company FOSROC for about $1 billion to drive its international expansion, Reuters reports.

📶 Data Centers: Damac Group, a UAE conglomerate with interests in luxury real estate, hotels, property management and logistics, announced plans to invest up to $1 billion in the development of data centers over the next several years.

 🛫 Best Airfares: Fletcher, an Israeli startup that uses artificial intelligence to help airlines optimize pricing and logistics, raised $90 million in a  Series B round led by Battery Ventures.

💸 Bilateral Fund: South Korea’s NH Venture and K-Growth have picked Jerusalem-based OurCrowd to co-manage an $80 million startup fund that will invest in both South Korea and Israel. 

📈 Rising Returns: Blackstone and other global investment firms that have poured tens of billions of dollars into India are finding returns on investment are often better than in the U.S. and U.K., Bloomberg reports.

🚙 Engine Supplies: Saudi Aramco is prepared to take a 10% stake in a thermal engine joint venture between Frances Renault and China’s Geely called Horse Powertrain, Reuters reports.

⛽ Gas Shortage: Abu Qir, one of Egypt’s largest fertilizer companies, said it would partially switch its factories to operating on hydrogen supplies as the country struggles with a shortage of natural gas that has led to widespread blackouts and led competitors to halt production.

Sheikh Mohammed bin Abdulrahman, Qatar’s Prime Minister and Foreign Minister, led the inauguration ceremony on Thursday for Simaisma, a $5.5 billion project on the country’s eastern coast that will turn a 7-kilometer beachfront strip into an integrated resort area filled with luxury hotels, spas, exercise trails and amusement parks.

Sheikh Dr. Sultan bin Mohammed, Ruler of Sharjah and President of the University of Khorfakkan, announced a cohort of new members for the school’s Board of Trustees.

Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, concluded a visit to San Francisco and nearby Silicon Valley on Thursday, which was aimed at boosting economic cooperation and exploring partnerships between the UAE and the U.S., state news agency WAM reported.

Saudi Minister of Finance Mohammed bin Abdullah described the kingdom’s structural reforms and efforts to generate non-oil revenue at this week’s Ministerial Council meeting of the OPEC International Development Fund in Vienna, Austria.

International Monetary Fund Managing Director Kristalina Georgieva said she is more “optimistic” on U.S. price stability than the Federal Reserve, projecting inflation would return to 2% next year in a huddle with reporters at IMF headquarters in Washington on Thursday. The lender similarly forecasts receding inflation for the Middle East. 

🥋 Martial Artists: Kids, teens and grown-ups will be donning gis in Abu Dhabi this weekend to kick off the UAE’s six-month long Khaled bin Mohamed bin Zayed Jiu-Jitsu Championship. Starting today at the Mubadala Arena and continuing through December, the competition will eventually crown champs from categories for 4-year-olds and up with medals and cash prizes worth AED 1.5 million ($408,000). Mohamed Al Dhaheri, Vice Chairman of the UAE Jiu-Jitsu Federation, said in a statement that the competition “reflects the UAE leadership’s limitless support” for the sport.

June 26-30, Tan-Tan, Morocco: Tan-Tan Moussem Cultural Festival. Annual gathering held since 1963 by more than thirty tribes from southern Morocco, with participation from the UAE and other Middle East nations.

June 28-30, Abu Dhabi, UAE: Khaled bin Mohamed bin Zayed Jiu-Jitsu Championship. Athletes from across the country compete for medals and cash prizes in the first of five qualifying events that will lead to the finals in December. Mubadala Arena, Zayed Sports City.

June 29-30, Cairo, Egypt: Egypt-EU Investment Conference. Business leaders and investors from Egypt and Europe engage around themes including green energy, nearshoring, digitization and tech startups. Al Manara International Conference Center.

July 1-3, Milan Italy: The Global Energy Transition Congress & Exhibition. An event bringing together thought leaders, innovators, and industry experts to address the challenges of accelerating the global energy transition. Milano Convention Centre.

July 10-11, Riyadh, Saudi Arabia: Global EV and Technology Forum. The inaugural summit in Saudi Arabia bringing together policymakers, companies and investors focused on sustainable urban mobility solutions. Riyadh International Convention & Exhibition Center.

July 15-26, Granada, Spain: ADIA Lab International Summer School. A course of lectures and case studies to explore the critical role of trust and safety in AI, examining the ethical, technical and societal implications of AI applications. University of Granada. 

Aug. 12-15, Riyadh, Saudi Arabia: Saudi Food Expo. One of the kingdom’s largest trade shows for the food & beverage industry. Riyadh Front Exhibitions.