India to spend $1.6bn to transmit more clean power; US Blackstone deploys 3$bn in green push: NRG Matters

India to spend $1.6bn to transmit more clean power; US Blackstone deploys 3$bn in green push: NRG Matters
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Updated 09 January 2022

India to spend $1.6bn to transmit more clean power; US Blackstone deploys 3$bn in green push: NRG Matters

India to spend $1.6bn to transmit more clean power; US Blackstone deploys 3$bn in green push: NRG Matters

RIYADH: Renewable investments continue to flow in, yet the sector is hindered by surging prices and unfulfilled pledges.

Looking at the bigger picture:

  • India is investing $1.6 billion (120 billion rupees) in building 10.7 thousand circuit kilometers of new transmission lines with a capacity of 20 gigawatts by 2026, Bloomberg reported.

The new lines will transmit energy from green refineries as the South Asian country aims to draw 50 percent of its energy needs from renewable sources by 2030.

  • The Czech Republic wants to phase out coal by 2033, according to Bloomberg.

But pressure on the European country is mounting to accelerate the plan, along with its neighboring states, to phase out the fossil fuel by 2030. 

  • The UK government is under pressure to act swiftly to help ease the pain of soaring energy costs before the energy regulator caps prices on February 7th, according to Bloomberg.
  • Critics claim that the boom in the green hydrogen industry is impeding the implementation of pure green sources such as solar and wind, CNBC reported.

This criticism is mainly attributed to the fact that green hydrogen is deemed inefficient and emits carbon in its production process.

Through a micro lens:

  • American alternative management firm, The Blackstone Group has injected $3 billion in US multinational power generation development and operations, Invenergy in recent green push, Bloomberg reported.

This comes as the alternative asset manager giant has committed $13 billion in 2019 to back clean energy transition and Invenergy – being a leader in the renewable energy sector – posing as a lucrative investment spot.

  • A major aluminum smelter in northern Franc, with an estimated annual capacity of 285 thousand tonnes, is cutting production by 15 percent amid surging energy costs, according to Reuters.

Germany's Lufthansa is set to buy 40% stake in Alitalia successor ITA

Germany's Lufthansa is set to buy 40% stake in Alitalia successor ITA
Updated 22 January 2022

Germany's Lufthansa is set to buy 40% stake in Alitalia successor ITA

Germany's Lufthansa is set to buy 40% stake in Alitalia successor ITA
  • Germany’s Lufthansa is set to buy a 40 percent stake in state-owned Alitalia’s successor ITA Airways

MILAN: Germany’s Lufthansa is set to buy a 40 percent stake in state-owned Alitalia’s successor ITA Airways and a deal could be unveiled next week, Italian daily Il Foglio reported on Saturday.

ITA Airways started flying on Oct. 15 with nearly 2,300 employees and a fleet less than half the size of that operated by Alitalia, the 75-year old former national carrier which passed through a dizzying succession of restructurings and changes of ownership.

The newspaper did not give a price for any deal, but said the two companies were very close to agreeing over some key terms, such as the role of Rome’s Fiumicino airport as a hub for direct flights to Africa and some routes to the Americas.

An ITA spokesperson said on Saturday that the airline’s top management would present a strategic plan to the company’s board on Jan. 31. A data room would be opened in the following days, he added, allowing a potential bidder or partner to have access to key financial documents to assess the value of the company.

Lufthansa declined to comment.

The report comes after sources told Reuters on Jan. 12 that ITA was in contact with Lufthansa, British Airways and United States-based Delta Air Lines for an equity partnership, saying that formal talks could start by the end of March.

A Lufthansa spokesperson said at that time that the German carrier was open to the possibility of a partnership with ITA, whereas Delta denied it planned to invest in ITA.

The German government currently holds 14 percent of Lufthansa shares following a bailout at the height of the coronavirus pandemic in 2020 and aims to sell its stake by October 2023 at the latest.

The group was saved from bankruptcy by Germany, Switzerland, Austria and Belgium with $10.21 billion in financial support approved by the European Commission.

A German economy ministry spokesperson declined to comment on the Italian newspaper report.

A deal with ITA would be subject to a European Union competition approval, Il Foglio said.


US Stocks post worst week since start of pandemic as Netflix disappoints investors

US Stocks post worst week since start of pandemic as Netflix disappoints investors
Updated 22 January 2022

US Stocks post worst week since start of pandemic as Netflix disappoints investors

US Stocks post worst week since start of pandemic as Netflix disappoints investors
  • Wall Street’s main indexes ended sharply lower on Friday as Netflix shares plunged after a weak earnings report

New York: Wall Street’s main indexes ended sharply lower on Friday as Netflix shares plunged after a weak earnings report, capping a brutal week for stocks that saw the S&P 500 and Nasdaq log their biggest weekly percentage drops since the onset of the pandemic in March 2020.

The benchmark S&P 500 posted its third straight week of declines, ending 8.3 percent down from its early January record high.

Losses also deepened for the Nasdaq after the tech-heavy index earlier in the week confirmed it was in a correction, closing down 14.3 percent from its November peak.

Netflix shares tumbled 21.8 percent, weighing on the S&P 500 and the Nasdaq, after the streaming giant forecast weak subscriber growth. Shares of competitor Walt Disney fell 6.9 percent, dragging on the Dow, while Roku also slid 9.1 percent.

“It has really been a continuation of a tech rout,” said Paul Nolte, portfolio manager at Kingsview Investment Management. “It’s really a combination of a rotation out of technology as well as very poor numbers from Netflix that I think is the catalyst for today.”

The Dow Jones Industrial Average fell 450.02 points, or 1.3 percent, to 34,265.37, the S&P 500 lost 84.79 points, or 1.89 percent, to 4,397.94 and the Nasdaq Composite dropped 385.10 points, or 2.72 percent, to 13,768.92.

For the week, the S&P 500 fell 5.7 percent, the Dow dropped 4.6 percent and the Nasdaq declined 7.6 percent.

The Dow fell for a sixth straight session, its longest streak of daily declines since February 2020.

The S&P 500 closed below its 200-day moving average, a key technical level, for the first time since June 2020.

“When markets get like they’ve gotten this week, the emotion is what takes over,” said Jim Paulsen, chief investment strategist at The Leuthold Group. “Until it finds support, no one’s going care about anything fundamental.”

Stocks are off to a rough start in 2022, as a fast rise in Treasury yields amid concerns the Federal Reserve will become aggressive in controlling inflation has particularly hit tech and growth shares.

Investors are keenly focused on next week’s Fed meeting for more clarity on the central bank’s plans to tighten monetary policy in the coming months, after data last week showed U.S. consumer prices in December had the largest annual rise in nearly four decades.

“Between the Fed meeting and earnings, there is a lot that the market could be worried about next week,” said Anu Gaggar, global investment strategist at Commonwealth Financial Network.

Apple, Tesla and Microsoft are among the large companies due to report next week in a busy week of earnings results.


US, Qatar discuss gas supplies amid Ukraine invasion fears

US, Qatar discuss gas supplies amid Ukraine invasion fears
Updated 22 January 2022

US, Qatar discuss gas supplies amid Ukraine invasion fears

US, Qatar discuss gas supplies amid Ukraine invasion fears
  • As Europe faces record energy prices, concerns especially high over possible supply dip
  • American official: ‘There’s no magic wand. It’s all really hard, really complicated’

LONDON: The US is holding discussions with Qatar and other gas exporters amid fears that a Russian invasion of Ukraine could spark a decline in supply.

The talks with the Gulf state and some EU nations have focused on new ways to secure alternative seaborne liquefied natural gas cargoes.

The discussions have become more intense in the last week as security talks between senior American and Russian ministers made little progress.

As Europe is facing record energy prices, concerns are especially high regarding a possible dip in gas supplies.

“We’re looking at what can be done in preparation for an event, especially midwinter with very low (European natural gas) supplies in storage,” a senior US administration official told the Financial Times.

“We discussed what can be moved around the market, what can help … the things we can prepare now for deployment if and when there is an escalated crisis.”

Officials are concerned that Europe could face widespread chaos, with blackouts and industrial disruption, if Russian gas exports fall sharply following an invasion. Gas stocks are at a record low for this time of year.

The US administration official said existing contracts between LNG exporters and Asian buyers risk disrupting any new plans to divert supply to Europe.

“There’s no magic wand,” the official said. “It’s all really hard, really complicated. Looking to do it within the constructs of how markets work, how commercial terms work, how cargoes work.”

An energy industry executive warned that Europe would almost certainly face extremely high energy prices amid an invasion, which could require coordinated government action to secure alternative LNG supplies.

“They will effectively have to compete for all the supply in the market, taking cargoes away from Asia, and the likely end result is the taxpayer will pay,” the executive told the FT.

“It would be like procuring PPE (personal protective equipment) at the start of the pandemic, with governments needing to intervene.”


Lebanon’s 2022 draft budget forecasts 20.8% deficit amid financial crisis

Lebanon’s 2022 draft budget forecasts 20.8% deficit amid financial crisis
Updated 21 January 2022

Lebanon’s 2022 draft budget forecasts 20.8% deficit amid financial crisis

Lebanon’s 2022 draft budget forecasts 20.8% deficit amid financial crisis

Lebanon’s debt-ridden government expects a 20.8 percent deficit for the coming year, according to a draft budget released on Jan 21. 

The plan, seen by Reuters, will see ministers put forward a long-term treasury advance to Electricité du Liban, Lebanon’s electricity company, of 5.25 trillion Lebanese pounds ($3.5 billion).

The advance will be provided to pay for fuel purchases, interest and loan installments, in a country that has been hit by energy shortages.

Last year, Lebanon’s projected budget had a deficit of 31.3 percent, and the plan was not passed by the country’s parliament.

Political dissension and escalating tensions between communities have had a negative impact on economic growth, compounding Lebanon’s woes since its 2019 default on a $90 billion debt.

Nassib Ghobril, head of research at Lebanon’s Byblos bank, warned that the government’s projection of a lower deficit depends on whether it can “improve the investment climate for business.”

Speaking to Arab News, he argued that a 10 percent tax increase on imported goods “won’t be effective if the government keeps on avoiding combatting custom evasion and smuggling.”

Ghobril said the cost of smuggling to other countries, more specifically Syria, runs into the hundreds of millions of dollars.

He added that Lebanon’s 2022 growth, which he estimates contracted by 12 percent in 2021, and 25 percent in 2020, will depend on the Lebanese government’s next policies.

“There are two scenarios: either the government reaches an agreement on economic reforms, with a deal with the IMF (International Monetary Fund), and this will push growth into positive territory after four years of contraction; or it won’t and we will face another year of economic contraction,” he said.


Gulf electricity interconnection project saves members $3bn

Gulf electricity interconnection project saves members $3bn
Updated 21 January 2022

Gulf electricity interconnection project saves members $3bn

Gulf electricity interconnection project saves members $3bn

RIYADH: Gulf countries have saved $3 billion since the establishment of the Gulf Cooperation Council Interconnection Authority in 2019, it said.

Savings have come from a reduced need for new generation plants, thus lower operating and maintenance expenses, and reduced carbon emissions, SPA reported.

The Authority has agreed an action plan for the establishment of a joint electrical interconnection project with the Egyptian Electricity Transmission and Jordan’s National Electric Power Co., it said.

In a two-day meeting, the parties agreed on preparing a business case to explain the benefits of electrical connection and to complete the required procedures, SPA reported.