Dubai passes climate torch to Azerbaijan as COP29 opens

A year after the UAE hosted the annual United Nations environmental summit, the torch passed today to Azerbaijan as officials and activists from 197 nations converged on the capital city of Baku for the two-week event known as COP29.

Opening the conference was COP29 President Mukhtar Babayev, Azerbaijan’s Minister of Ecology and Natural Resources, who said the earth is on a “road to ruin” and beseeched delegates to embrace U.N. goals for transition from fossil fuels. “COP29 is the unmissable moment to chart a new path forward for everyone,” he said.

The focus of this year’s climate summit is finance as estimates for the cost of building out clean energy systems, making cities more resilient to extreme weather, and transitioning factories and transportation systems away from fossil fuels run into trillions of dollars, The New York Times reports.

Much of the attention, however, is on what to expect from U.S. President-elect Donald Trump, who has dismissed global warming as a hoax. Also stirring controversy is Azerbaijan’s economic dependence on oil production, which is drawing protests similar to those against the UAE last year at COP28.

Countries will present their updated national climate action plans, which detail how they plan to reduce emissions. At the end of the conference, which closes on Nov. 22, negotiators will try to ratify a final agreement that will include new commitments to address climate change.

More than 100 heads of state and government were planning to attend, including the leaders of Barbados, Finland, Greece, Kenya, Spain, Saudi Arabia, Turkey and Pakistan. Skipping the event is U.S. President Joe Biden, as well as the leaders of China, India, Brazil, Britain, Germany and France.

Among the speakers at today’s opening event was Dr. Sultan Al Jaber, who was President of COP28. He is also CEO of Abu Dhabi-based national energy company ADNOC and the UAE’s Minister of Industry and Advanced Technology.

“I urge you all to prove once again that we can unite, act and deliver,” Al Jaber said. “Let positivity prevail and let it power the process.”

COP28 could be the accelerator Mideast ClimateTech startups need

DUBAI, United Arab Emirates – Momentum is building in the UAE for a wave of investment in climate technology as Dubai hosts this year’s United Nations climate conference. 

“New COP28 agreements can unlock funding mechanisms and financial incentives for climate-focused ventures, encouraging greater investment in sustainable initiatives,” Noor Sweid, founder and managing partner at UAE VC firm Global Ventures, told The Circuit. She said new emission reduction and renewable energy targets will likely drive demand for new technology, “further underlining the role of regional ventures in the global transition.” 

Investment in so-called ClimateTech accounted for just 5% of the total capital invested in the Middle East, North Africa and Turkey from 2018 through 2022, according to venture capital data platform MAGNiTT. But there are signs the sector is gaining traction, notching a 62% annual growth rate in 2022 with the expectation that the trend will only be accelerated by COP28.

ClimateTech startups are developing products for a variety of industries where removing carbon emissions are especially challenging, including agriculture, energy, real estate and transportation. 

More than 100 climate tech startups are showing off their work at  the Startup Village in COP28’s Green Zone, the area of the conference open to the public.

Saeed Alhassan, the founder of UAE startup Manhat, which is developing sea-to-freshwater and floating farm products, is one such entrepreneur. He said that he was able to raise around $100,000 in grant funding in the run-up to COP28 because of increased interest in ClimateTech. He’s now using the Green Zone to connect with potential investors as he aims to raise $1 million in seed funding coming out of the climate meeting. 

“Definitely the networking effect is very positive, we already have good leads on investors,” he told The Circuit. “It’s still Day 7 and we still have another week to go.”

This week the Dubai Future District Fund, a government-backed venture capital fund, said it has earmarked up to $54 million of its $272 million fund to invest in ClimateTech startups. Meanwhile, Abu Dhabi’s start-up ecosystem Hub71 announced this week a new initiative to attract companies building decarbonization products to the capital. The program will offer participants up to $136,000 in cash and incentives for equity and provide workspace, mentorship and introductions to investors and commercial partners like ADNOC, Siemens and e&. Hundreds of start-ups have applied. 

Sky Kurtz, the co-founder and CEO of Pure Harvest Smart Farms, is no stranger to fundraising. His indoor farming business was the most-funded startup in 2022, having raised a total of $387 million in a mix of equity and debt. 

“My first COP was COP26 [in Glasgow, Scotland]. And I’m not kidding, it changed me,” he told The Circuit.  “I was really affected, to really open my eyes and become more educated.” 

He is hopeful for an accelerating effect on investment in companies working on climate change issues coming out of this year’s climate meeting.  

“It’s an opportunity for companies that are contributing to mitigating climate change,” he said, “to showcase the strength of their thesis, and why they are attractive to venture capital and possibly investable.”

Saudi Arabia’s $800 billion tourism plan starts to take shape

RIYADH, Saudi Arabia — Four years after opening up to international tourists for the first time, Saudi Arabia marked progress on its massive $800 billion investment drive to lure travelers as it played host to the United Nations’ World Tourism Day. 

Riyadh welcomed over 500 government officials, investors, international press and U.N. delegates from 120 countries last week to underscore the importance of the global tourism industry. The occasion was also an opportunity for Saudi Arabia to set out more bold plans for its young tourism sector as it seeks to diversify its economy beyond oil revenues.

“If you want to introduce your country to the world, then tourism is the best way to do it,” Zurab Pololikashvili, secretary-general of the U.N. World Tourism Organization, said during a  roundtable discussion. 

Neom has signed around 18 hotel deals – including with luxury brands like JW Marriott, The W and German boutique concept 25Hours – and has a target of 200 total, most of them to be built on The Line, a spokesperson for Neom Hotel Development told The Circuit. 

First unveiled by Crown Prince Mohammed bin Salman in 2017, Neom is a $500 billion mega-project in the northwest of the country along the Red Sea coast, with construction underway on a variety of zones such as a mountain ski resort, an island getaway, a major port and a city-of-the-future concept known as The Line, where the majority of the hotels will be built. 

The flurry of deals in Neom marks a shift for the kingdom, which has always catered to  Muslim pilgrimage tourists. The majority of hotels currently open in Saudi Arabia are centralized in Medina adjacent to the holy site of Mecca. 

Saudi Arabia’s Minister of Tourism Ahmed Al-Khateeb announced the creation of the Riyadh School for Tourism and Hospitality to build a pipeline of talent to staff the fast-growing industry. Set to open in 2027, it will cost more than $1 billion to build and be located in the capital’s entertainment and tourism project known as Qiddiyah.

Pololikashvili also announced the creation of a center for the study of sustainability — of which the UNWTO was working closely with officials in the kingdom to accomplish. The program is due to be launched in September and will offer a bachelor’s degree program with students spending time pursuing studies in Madrid, Spain and the Swiss city of Lucerne. 

Al-Khateeb said the kingdom will invest $800 billion to develop tourism over the next decade as the contribution of travel and tourism to the nation’s economy begins to pick up pace. The goal is for the sector to contribute up to 10% of gross domestic product  by 2030, up from a current 4.5%.

The kingdom has also raised  its tourism targets, setting a goal of attracting 70 million international visitors annually by 2030, up from 50 million, Bloomberg reported.  

Among the various delegates in attendance at World Tourism Day was Israel’s Tourism Minister Haim Katz, who arrived in the kingdom on Tuesday, becoming the first Israeli minister to lead a delegation to Saudi Arabia. The visit comes at a time when Israel and the kingdom are moving closer towards a U.S.-brokered normalization deal.

Pololikashvili said Saudi Arabia was obliged to admit the Israeli minister for the U.N. event even though the two countries don’t have diplomatic relations. “All our member states are invited to take part in our events – independently of where they are held,” Pololikashvili told The Circuit.

UAE’s climate summit chief pledges ‘brutally honest’ assessment on missed goals

With less than five months until the COP28 environmental summit opens in Dubai, the event’s Emirati leader, Sultan Al Jaber, pledged to confront the world’s slow response to global warming.

Speaking in Brussels on Thursday, Al Jaber, president-designate of the United Nations climate change conference that will be hosted by the UAE, said more pressure will be applied on governments to accelerate reduction of greenhouse gas emissions. He also laid out the schedule for the two-week event that opens Nov. 30 and will include the participation of some 200 countries.

“We must be brutally honest about the gaps that need to be filled, the root causes and how we got to this place here today,” Jaber told climate ministers and senior officials from the European Union, the U.S., China and other G20 countries. “Then we must apply a far-reaching, forward-looking, action-oriented and comprehensive response to address these gaps practically.”

Jaber, who is also head of the state-owned Abu Dhabi National Oil Company and UAE minister of industry and advanced technology, said delegates at the conference will engage in a “global stocktake” that will indicate how far their countries lag behind goals for reduced fossil fuel use and making the transition to renewable energy production.

The stocktake exercise addresses the recognition that the current pace of replacing carbon-based fuels is insufficient to meet the target set in the U.N.’s 2015 Paris Agreement that would try to limit global warming to 1.5 Celsius (2.7 Fahrenheit) from preindustrial levels.

“Today I am calling on all of us to disrupt business as usual, unite around decisive action and achieve game-changing results,” he said. “We need to challenge old models that were built for the last century. We need to break down silos that are slowing progress. And we need to bridge divides that are blocking critical breakthroughs.”

Some members of Congress and European legislators have attacked the choice of Al Jaber to preside over COP28 given his company’s prominence in the fossil fuel industry. The appointment was defended by John Kerry, the White House special envoy for climate, who said Al Jaber’s connection to the industry and his role in the UAE government will make the conference more effective. Al Jaber said in Brussels that he will arrange meetings between heads of the major oil companies, government leaders, the U.N. and international energy agencies. 

Al Jaber, who serves as chairman of Masdar, the UAE’s alternative fuel company,  called for a tripling of the world’s renewable energy capacity by 2030 and a doubling of energy efficiency. He said all governments are being encouraged to update their emissions-cutting targets by September. The UAE’s climate ministry last month said it planned a 40% reduction in carbon emissions by 2030, raising its previous goal of 31%.

In response to growing complaints about the costs of energy transition, Al Jaber called on international financial institutions to provide more funds to help poorer countries address climate change.

He said the conference would be built around four pillars: “Fast-tracking the energy transition, fixing climate finance, focusing on lives and livelihoods, and making COP28 fully inclusive.”

Mideast mulls alliances at U.N. conference to avert environmental catastrophe

From lab-cultured milk to hydrogen-based energy generation, Israelis sought to share expertise in desert agriculture, desalination and food security with new Arab partners at the United Nations climate change summit and establish alliances across the Middle East and North Africa.

The campaign was led by Israeli President Isaac Herzog, who said cooperation would lead to “regional climate resilience,” in a Nov. 7 address to the COP27 conference in Sharm el-Sheikh, Egypt. A nonprofit industry group, Start-Up Nation Central, sought to foster connections with Bahrain, the United Arab Emirates, Morocco and other countries that have signed peace agreements or normalized relations with Israel through an initiative it dubbed the MENA Alliance for Climate Innovation.

“We want to create a business-focused framework with partners from the region to connect startups with investors and corporations, and to work together to develop solutions addressing shared climate challenges,” Yariv Becher, Start-Up Nation Central’s vice president for innovation diplomacy, told The Circuit from Sharm el-Sheikh. “We came to COP27 to move things forward.”

Israel, which has the third-largest number of startups per capita in the world, has developed an international reputation for the quality of its research in desalination and desert agriculture. That has created natural linkages with its new allies in the world’s driest region, which extends from the Arabian desert to the Sahara. Israeli companies have developed partnerships in the UAE and Bahrain that enable them to do business in Saudi Arabia and other countries that don’t have formal diplomatic ties with the Jewish state.

Warning that the region is “on the brink of catastrophe,” Herzog laid out a framework for regional cooperation in addressing climate challenges.

“Here in Sharm el-Sheikh, I wish to reiterate the State of Israel’s solid commitments to achieving net zero carbon emissions and to transitioning from fossil fuels to renewable energy by 2050,” the president said. “But Israel is prepared to assume far greater responsibility,” he added. “Israel is prepared to lead the effort towards regional climate resilience – I intend to spearhead the development of what I term a Renewable Middle East, a regional ecosystem of sustainable peace.”

In the Israeli pavilion at the conference, 10 startups promoted their technologies: Aleph Farms, which produces meat from animal cells; Beewise, which develops robot-controlled beehives; GenCell, which generates energy from hydrogen and ammonia; Groundwork BioAg, which produces inoculants for commercial agriculture; H2Pro, which produces hydrogen-based energy; Home BioGas, which reduces cooking gas from household waste; Remilk, which produces laboratory-cultured milk; Tomorrow.io, which develops weather forecasting technology; UBQ Materials, which turns household waste into a thermoplastic product; and Wiliot, which reduces greenhouse gas emissions from production lines.

Underlining the region’s concern about climate change, next year’s conference, COP28, will be held in the United Arab Emirates, whose president, Sheikh Mohamed bin Zayed Al Nahyan, pledged the country’s dedication to renewable energy even as it stands as the world’s seventh-largest oil producer.

“Our world is facing complex challenges, most important of which is climate change, which now affects the world’s stability and security – including food security… We have only one planet, and with that in mind, it is imperative that we partner and work together in a spirit of determination and optimism to address this common challenge through climate action,” he said.

Also at the conference, cabinet ministers from Israel, Jordan and the UAE signed a memorandum of understanding that lays the groundwork for creating solar energy fields in Jordan. The three-way agreement will enable Jordan to sell solar power from the solar field built by an Emirati firm, while Israel will sell desalinated water to Jordan from a site that will be built on the Mediterranean coast. The MOU was signed on Nov. 8 by Esawi Freij, Israel’s outgoing minister for regional cooperation; Mohammad Al Najjar, Jordan’s minister of water and irrigation; and the UAE’s Climate Change and Environment Minister Mariam Al Mheiri.

Weekly Circuit: Egypt hosts climate summit + Koch Israel chief aims to disrupt

👋 Good Monday morning in the Middle East!

For the next two weeks, Egypt will be at the center of global efforts to avert environmental disaster as it plays host to the annual United Nations summit on climate change, COP27. Much has changed since last year’s event in Glasgow, Scotland, where pressure built on countries to adhere to the U.N. goal of net zero greenhouse gas emissions by 2050. Since then, world oil and gas supplies have been slashed in the wake of Russia’s invasion of Ukraine. Europeans are bracing for a cold winter while making supreme efforts to procure energy supplies made from fossil fuels.

Among world leaders who are scheduled to address the conference in the Egyptian resort town of Sharm el-Sheikh are U.S. President Joe Biden, U.K. Prime Minister Rishi Sunak, French President Emmanuel Macron and U.N. Secretary General António Guterres. No-shows include Russian President Vladimir Putin and Chinese President Xi Jinping. Leaders attending from the Middle East are Egyptian President Abdel Fattah El-Sisi; Israeli President Isaac Herzog; Jordan’s King Abdullah II; and Sheikh Mohammed bin Zayed, president of the United Arab Emirates, which will host next year’s summit.

Bibi’s back. Benjamin Netanyahu, Israel’s longest-serving leader, won last week’s election and will most likely return to the prime minister’s residence in Jerusalem after 16 months of leading the Knesset’s opposition. Netanyahu’s coalition, which will almost certainly include right-wing leaders who regularly demonstrate hostility to Palestinians, has put Arab leaders on alert. Experts say it may slow down some areas of cooperation with the United Arab Emirates and Saudi Arabia, though the normalization agreements known as the Abraham Accords will likely withstand the pressure.

An advisor to Bahrain’s King Hamad bin Isa Al Khalifa, on the other hand, told reporters that Netanyahu’s victory “was normal and always expected,” adding, “We will stick to our agreement and we expect it to continue in the same line and continue building our partnership together.” Lebanon said it has an insurance policy against Netanyahu trying to neutralize the maritime gas deal with which it agreed upon with Israel through U.S. mediation. As opposition leader, Netanyahu criticized the agreement and said he wouldn’t be bound by its terms. Lebanon’s chief negotiator said he obtained “sufficient American guarantees that this deal cannot easily be canceled.”

One of Netanyahu’s top aides in a previous term was Eli Groner, now managing director in Israel for Koch Disruptive Technologies and one of the most sought-after funders of startups. In an Investor Spotlight, The Circuit reports that the firm, owned by the politically conservative Koch family, has dispensed close to $1 billion to 14 companies in Israel and is scouting for others engaged in “creative destruction” of industry norms.

Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].

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INVESTOR SPOTLIGHT

Koch’s Israeli investment chief aims to disrupt venture capital funding

Eli Groner meets with hundreds of startups each year as the managing director in Israel for Koch Disruptive Technologies, which since 2018 has doled out almost $1 billion to emerging Israeli companies. For the fraction of those deemed disruptive enough to get funding, KDT, the venture arm of gigantic U.S. conglomerate Koch Industries, sees itself as a devoted ally that doesn’t expect quick returns, Shoshanna Solomon reports for The Circuit.

Partner forever: “We are patient capital,” Groner told The Circuit during an interview at the firm’s 35th-floor Tel Aviv office overlooking the Mediterranean. “We invest with the expectation that we are going to partner with them forever or for at least for 10 years. Now, that is not always the case, but that is certainly the way we look at it when we make an investment. So, we want to work with people that are high integrity, resilient, committed and playing the long game.”

Netanyahu aide: Dressed in a light-blue button-down shirt and tailored tan trousers, the American-born Groner has business experience and an insider government background that impressed KDT when the firm opened its Israel office three years ago, the only one outside the United States. Now 52, he spent three years as a top aide to then-Prime Minister Benjamin Netanyahu, serving as director-general of the Prime Minister’s Office. Any political savvy he gained in government has been useful in representing Koch Industries, whose owners are among the biggest contributors to right-wing causes in the U.S.

Shared vision: Koch Industries had revenue last year of more than $125 billion and 120,000 workers worldwide. KDT’s first foray in Israeli startups — and first ever investment — was $100 million in backing for Insightec to which it later added an additional $100 million. When it first funded Insightec, KDT didn’t have an office in Israel. On a visit to meet industry players, company executives had an encounter with Groner, fresh out of the Prime Minister’s Office, who offered a geopolitical overview of Israel and the region. “We really connected on vision and values,” Groner said. “Six months later I got a formal offer to join KDT and open up the Israel office.” Groner has since led KDT’s investments in 13 Israeli startups that operate in fields ranging from health care, semiconductors and cybersecurity to manufacturing and agriculture. 

Regional opportunity: Groner’s efforts come during a period when Israel is forging new partnerships with the United Arab Emirates, Bahrain, Morocco and other Arab countries, under the banner of the Abraham Accords signed two years ago. It is a “very exciting time for the region,” he said. “It is an opportunity for everyone, whether you are an entrepreneur, whether you are an investor. But at the end of the day, it is going to be the same values and principles that apply. Are you aligned in values? Are you aligned on vision?”

Read the full story here.

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