EU chiefs Charles Michel and Ursula von der Leyen announced the conclusions of a two-day Brussels summit. EPA
EU chiefs Charles Michel and Ursula von der Leyen announced the conclusions of a two-day Brussels summit. EPA
EU chiefs Charles Michel and Ursula von der Leyen announced the conclusions of a two-day Brussels summit. EPA
EU chiefs Charles Michel and Ursula von der Leyen announced the conclusions of a two-day Brussels summit. EPA

Four point European energy plan to escape reliance on Russia


Tim Stickings
  • English
  • Arabic

European countries on Tuesday united behind a four-pronged strategy for the future that is designed to free their energy grids from Russia’s grip, ending a dependency on Moscow that has been a handicap in responding to the invasion of Ukraine.

Hours after agreeing a partial ban on Russian fossil fuel imports, the European Union adopted a plan to plug the gap by shopping elsewhere, producing more renewable energy, saving power and improving connections between energy-rich and import-reliant nations.

Ursula von der Leyen, the president of the European Commission, said she hoped to put some 300 billion euros ($321bn) of EU funding behind a blanket energy revamp stretching from Finland to Portugal.

In the short term, the EU’s 27 members will be encouraged to sign joint gas contracts — in a manner compared by officials to their common purchases of coronavirus vaccines.

But renewable energy “has the big advantage that it is not only good for the climate, but it is also good for our independence and good for our security of supply, and it creates jobs at home,” Ms von der Leyen said.

The outline strategy was agreed at the end of a two-day summit in Brussels dedicated to the war in Ukraine. Leaders also discussed food shortages arising from the conflict and the future of the European defence industry.

The summit’s main result, the embargo on Russian oil imports by sea, had languished in diplomatic stalemate for weeks because of the concerns of countries reliant on Russian fuel — especially Hungary.

Several leaders signalled on Tuesday that the EU would be reluctant to go charging back into that process to sanction gas, despite Ukraine’s demands, exposing the limits of what Europe can do given its close fuel links to Russia.

“We don’t want this fuel to be replaced by other fossil products,” Swedish Prime Minister Magdalena Andersson said after leaders finished haggling over a text on energy.

“Instead, we should increase the use of renewable solutions.”

European leaders haggled for two days over energy, sanctions and other issues. EPA
European leaders haggled for two days over energy, sanctions and other issues. EPA

Part one: Finding new oil and gas suppliers

The 11-page European Council conclusions said countries should, “as a short-term priority”, find oil and gas from suppliers other than a newly hostile Russia.

Russian gas exporter Gazprom is already blocking supplies to Poland, Bulgaria, Finland, the Netherlands and potentially Denmark, and Germany is among the countries preparing for potential power cuts.

Leaders said member states should move faster to fill their gas storage tanks before next winter and encouraged them to sign up to a joint purchasing platform also open to non-EU members including Ukraine.

The EU in March signed a deal with the US to import liquefied natural gas, and the bloc’s LNG imports from outside Russia are already double where they were at the start of 2021, Ms von der Leyen said.

Part two: Producing renewable energy at home

The war in Ukraine has given new momentum to renewable energy policies originally drawn up to reduce carbon emissions and tackle climate change.

Ms von der Leyen said renewables were the “most important pillar” of the wider energy revamp known as RePower EU, which calls for policies such as a doubling of solar panel capacity by 2025.

EU leaders said an expansion of renewable energy sources such as wind and solar would require immediate changes to planning laws so that new projects can quickly be approved.

They said a European renewables industry should be “underpinned by an industrial cluster” to develop the skills and supply chains for solar and wind, hydrogen, heat pumps and other technology.

Part three: Saving power

The European Commission says a third of the gas savings it hopes to make by 2030 could be achieved by not wasting energy.

“To save energy is of course a fundamental priority for all of us,” said European Council President Charles Michel.

The leaders’ recommendations were light on specifics but called on countries to “improve energy efficiency wherever possible”. The commission has proposed incentives such as tax cuts on energy-efficient heaters.

Countries have already begun taking measures to head off a potential energy crunch. Spain this month set a limit on the use of air conditioning in offices, while Germany has turned down the temperature in public swimming pools.

Part four: Sharing energy

The vision of EU leaders is “completing and improving the interconnection of European gas and electricity networks” so that nations rich with energy can help out their neighbours.

These should include both gas pipelines and electricity networks that could eventually be used to transmit hydrogen, the council said. Hydrogen is viewed with interest by sectors such as transport and heavy industry that cannot easily be electrified.

Spain and Portugal, which are relatively cut off from the European power grid in what officials have called an “energy island”, won an expression of interest from the EU in buying from their LNG and renewable-heavy networks.

New connections should include “taking advantage of the Iberian Peninsula’s potential to contribute to the security of supply,” the leaders said — without addressing Spain’s demand that they stump up some of the money.

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Company profile

Company: Eighty6 

Date started: October 2021 

Founders: Abdul Kader Saadi and Anwar Nusseibeh 

Based: Dubai, UAE 

Sector: Hospitality 

Size: 25 employees 

Funding stage: Pre-series A 

Investment: $1 million 

Investors: Seed funding, angel investors  

Timeline

2012-2015

The company offers payments/bribes to win key contracts in the Middle East

May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

October 2021

Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

May 2025

The High Court of England and Wales approves the company’s restructuring plan

July 2025

The Court of Appeal issues a judgment challenging parts of the restructuring plan

August 2025

Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision

October 2025

Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange

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While you're here

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.”

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The years Ramadan fell in May

1987

1954

1921

1888

Updated: May 31, 2022, 3:48 PM