Cop 27: UAE, Jordan and Israel sign deal to advance solar energy and desalination

The UAE, Jordan and Israel have signed a deal at Cop27 to advance clean energy and sustainable water desalination projects announced last year.

The agreement was signed in the presence of Sheikh Abdullah bin Zayed, Minister of Foreign Affairs and International Co-operation; Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and Special Envoy for Climate Change; and John Kerry, the US Special Presidential Envoy for Climate.

The agreement was signed by Mariam Al Mheiri, Minister of Climate Change and the Environment; Mohammad Al Najjar, Jordan’s Minister of Water and Irrigation, and Esawi Frej, Israel’s Minister of Regional Co-operation.

The memorandum of understanding relates to Project Prosperity, which has two components: Prosperity Green and Prosperity Blue.

Prosperity Green includes a 600-megawatt solar photovoltaic plant that will convert light into electricity. It will be complemented with electric storage, which will be built in Jordan and produce clean energy for export to Israel.

Prosperity Blue is about a sustainable water desalination plant, located in Israel, to export to Jordan 200 million cubic metres of potable water a year.

The three countries signed an initial declaration of intent to explore the feasibility of both projects at Expo 2020 Dubai in November last year.

As per the agreement, feasibility studies for each of the projects have been taking place and all three countries said that both projects have positive potential prospects.

The UAE, Jordan, and Israel will continue to engage to develop plans in time for Cop28, which is to be held in the Emirates next November.

Project Prosperity was proposed to help address some of the challenges posed by climate change regarding water and energy security in the Middle East, and to promote renewable energy, sustainable water supply, and stability in the region.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

Cop 27: UAE, Jordan and Israel sign deal to advance solar energy and desalination

The agreement will advance plans that include a 600-megawatt solar energy and water desalination plant

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Who's who in Yemen conflict