Month: May 2018

With cities facing their fastest growth ever, the head of the United Nations’ agency for urban development is on a mission — to revitalize the organization and ensure people, particularly women, are central to future planning.

Maimunah Mohd Sharif, the former mayor of Penang who took up the role of UN-Habitat executive director in January, said cities need to more liveable for women to succeed if they are home, as expected, to 70 percent of the population by 2050.

But first, she said, she had to put UN-Habitat back on track to ensure it could help meet the United Nations’ latest set of global goals calling for cities to become inclusive, safe, resilient and sustainable by 2030.

For UN-Habitat has struggled in recent years to attract funding from national governments — its primary donors — with the Nairobi-based agency receiving just $2.5 million of a  two-year $45 million budget for core operations.

“Before I see change in cities I want to see change in UN-Habitat to make sure it is relevant,” Sharif, a professional planner, told the Thomson Reuters Foundation on Monday on the sidelines of a workshop on sustainable cities.

Since Sharif took office she has stressed that the U.N. General Assembly has adopted a resolution on strengthening UN-Habitat as the organisation’s focal point on sustainable urbanization and human settlements and that is her aim.

Sharif said one of her most immediate challenges is to reform UN-Habitat so that it can be a global driving force in implementing the New Urban Agenda (NUA), a 20-year-road map adopted by global leaders in 2016.

This sets non-binding goals such as developing cities that do not harm the environment, redeveloping informal settlements with residents involved and reining in urban sprawl.

Part of this includes working on a new six-year strategic plan to address urban challenges such as income inequality, affordable housing, climate change and resilience.

Sharif said making cities more liveable for women is one ofbher priorities because the benefits will be far-reaching. “If we plan the city for a woman, we plan it for all,” Sharif said.

“If pavements are more accessible for women with children, it’s also good for men and it’s also good for people with mobility issues.”

Sharif said participatory budgeting, in which ordinary people have a say in how city funds are spent, is an effective way to make sure women are included in key planning decisions.

Sharif added that urban planning was not just a “check-box” of building the school, the park, the road but you need to create “inclusive communities” involving the public, public sector and private companies.

“When you ask people what they want, you can make good decisions,” she said.
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Russia’s Gazprom said on Monday it had completed the sea portion of the first line of the TurkStream offshore gas pipeline across the Black Sea.

Gazprom, which plans to complete the pipeline in 2019, said in a statement that 1,161 km, of pipe had been laid since it began construction last year.

The second line, designed to ship gas to south European countries such as Greece, Bulgaria and Italy, will be laid in the third quarter of 2018, the company said.

Russian Energy Minister Alexander Novak said this month that Turkey’s approval for Gazprom’s onshore portion of the TurkStream pipeline’s second line was still pending.

Moscow, which relies on oil and gas revenue, sees new pipelines to Turkey and Germany – TurkStream and Nord Stream 2 – as crucial to increasing its market share in Europe.

 
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Mexican companies are delaying investment, bringing forward imports to protect against currency swings and warning the next few months could be volatile as the NAFTA trade talks reach a climax and July’s presidential election nears. 

From bakers to retailers and construction firms, more than a dozen of Mexico’s biggest companies cited concerns over NAFTA and the election and issuing conservative guidance in recent weeks, despite economic data pointing to an uptick in Latin America’s second-largest economy.

Grupo Bimbo, the world’s largest bread maker, said it was delaying capital expenditure and tightening costs due to a volatile economic environment amid the presidential campaign.

Though no major company mentioned him by name, the prospect of a government led by left-winger Andes Manuel Lopez Obrador is beginning to unsettle markets. Lopez Obrador is ahead by double digits in all major polls and the peso fell 2 percent in just one day in April, hit by political risk.

“These are not ‘business as usual’ times: there’s much at stake for Mexico in this election,” Bimbo’s Chief Executive Daniel Servitje told an earnings call. “The current situation…demands a cautious stance.”

Exchange rate uncertainty pushed retailer Liverpool to order all the imported products needed for its discount clothing stores Suburbia for the second half of the year.

Its Liverpool department stores have covered 50 percent of imported merchandise needed for the second half of 2018 and even the first half of 2019, the company said.

Juan Fonseca, head of investor relations at bottler and retailer Femsa, one of Mexico’s largest companies, said encouraging signs from falling inflation and wage growth were being overshadowed by the fragility of the peso due to political risk.

“Between now and the election, clearly things are going to be volatile,” he told an analyst call. “There are more data points that would support a cautious case.”

Preliminary gross domestic product (GDP) data for the first quarter on Monday showed year on year growth of 1.2 percent, driven by a jump in the service sector.

Analysts predict Mexico’s gross domestic product will grow 2.3 percent this year as manufacturing activity improves.

However, Scotiabank analysts warned in a recent report that NAFTA and the election could have a significant impact on economic performance.

Tough end to the year

Political leaders from the United States, Mexico and Canada say an initial deal to renew the North American Free Trade Agreement (NAFTA) is close but issues remain. Negotiations in Washington have been paused until May 7.

Mexican companies fear that scrapping the trade pact, as U.S. President Donald Trump has threatened to do, or renegotiating the deal in a way that hinders the Mexican economy would hit their earnings. Around 80 percent of Mexican exports go to the United States.

Executives at Unifin – which leases equipment and vehicles to mid-sized manufacturing, services and construction companies – said clients postponed business decisions every time they saw news suggesting cancellation of NAFTA.

Mexican cement companies Grupo Cementos Chihuahua and Elementia both warned of a tough second half of the year. 

Elementia said government spending on projects was “practically nonexistent” and the private sector was nervous.

“Consumption might stay, but personally, I don’t think it will grow in the second semester,” CEO Fernando Benjamin Ruiz said.

Several companies, including GCC and Mexican bank Banregio, linked their guidance to the outcome of NAFTA and the election.

Paper maker Kimberley Clark de Mexico warned that volumes could be hit by the uncertainty, while airlines Volaris and Aeromexico said it could change customers’ behavior.

The chief executive of Monterrey-based bottler Arca said that while the economy remained very robust in northern Mexico, a good year depended partly on the fate of the trade pact.

“If NAFTA is finally agreed…we definitely will see a good year in volume,” Francisco Rogelio Garza said.

Analysts at MRB Research and Barclays suggested, however, that markets may not yet be pricing the risks of Lopez Obrador winning the presidency.

The former Mexico City mayor, running on an anti-corruption platform, has threatened to cancel a project for a $13 billion airport in the capital and review a major energy reform.

A victory by Lopez Obrador, known as AMLO, would spell volatility in equities and the peso, Barclays said, adding it would be worrying for sectors from infrastructure and banks to construction.

“The assumption that AMLO’s bark is worse than his bite has been drifting into an even more complacent argument: that a populist leader is no bad outcome in the short term, implying fiscal thrust and more growth,” MRB Research said.
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Taiwan is becoming the next battleground for the world’s top offshore wind developers as they seek a foothold in Asia for a technology that has been expanding fast in Europe.

Taiwan announced results Monday of its first major offshore wind farm auction that aims to add 3.8 gigawatts (GW) of capacity to its existing network of just 8 megawatts (MW).

The island’s offshore wind market is expected to expand to 5.5 GW by 2025, and the government aims to invest $23 billion on onshore and offshore wind projects by 2025, law firm Jones Day says.

Taiwan is making a big push to attract investments in renewable technology as it phases out nuclear power by 2025, after the 2011 Fukushima disaster in Japan highlighted the risks of using nuclear energy in a region prone to earthquakes.

For developers in Europe, where expanding offshore wind projects particularly in the North Sea has driven down costs, Taiwan is seen as a route into Asian markets, such as Japan and South Korea, where the technology is still barely used.

Denmark’s Orsted and Germany’s wpd were Monday’s biggest winners, securing contracts to install 900 MW and 1 GW of capacity, respectively.

“We see Taiwan as a stepping stone into Asia-Pacific,” said Matthias Bausenwein, the regional general manager for Orsted, the world’s largest owner of offshore wind power sites that was previously known as DONG Energy.

Taiwan’s auction drew bids from the world’s biggest international players, attracted by the island’s strong winds, a stable regulatory framework and the offer of 20-year power purchase agreements with a feed-in-tariff above European benchmarks.

“We have aggressive targets in Taiwan and, with things going on in China, South Korea and other markets, that amounts to it becoming the fastest-growing region globally,” said Bausenwein.

Falling costs

Offshore wind power is costlier than onshore projects or solar power, and still only accounts for about 3.5 percent of global wind energy capacity.

But Europe has been leading the way in using the technology, adding 3 GW last year and taking total offshore capacity to 19 GW, according to the Global Wind Energy Council.

Costs have plunged as a result. In last week’s auction in Germany, the world’s second-biggest offshore wind power market, some bids offered capacity with no subsidies. In Britain, the world’s biggest market, the cost of wind power fell below new nuclear generation for the first time last year.

This has been encouraged by an expanding regional grid, greater ability to manage variable wind power supplies and the growing scale of turbines, expected to have capacity of 10 to 15 MW each in two or three years, roughly twice as powerful as today.

Taiwan is not considering firms from China, the world’s third-biggest offshore market and which claims Taiwan as Chinese territory. Chung-Hsien Chen, director of the energy technology division at Taiwan’s Bureau of Energy, said Chinese bids were excluded “due to concerns of national security.”

Alongside Orsted and wpd, other bidders included Copenhagen Infrastructure Partners, Canada’s Northland Power, Yushan Energy, a subsidiary of Singapore based Enterprize Energy and Taiwanese firms China Steel Cooperation and Taipower.

After awarding 3.8 GW capacity Monday, a further 2 GW will be allocated through a competitive price tender this summer. Monday’s auction had included an assessment of factors such as the amount of local content included.

European firms want local suppliers to avoid the cost of shipping bulky equipment used in the turbines from Europe.

“The requirements for local content are increasing step by step,” said Andreas Nauen, offshore chief executive for Siemens Gamesa, adding some European equipment would initially be used.

Siemens Gamesa is working to develop the Port of Taichung as a regional hub and has signed non-binding agreements with some local partners that could provide gear locally.

MHI Vestas, a venture between Japan’s Mitsubishi Heavy Industries and Danish turbine maker Vestas, is also considering developing local manufacturing.

“We want to produce locally because we want to be competitive,” the joint venture’s chief executive, Philippe Kavafyan, told Reuters.
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U.S. President Donald Trump has postponed a decision on imposing steel and aluminum tariffs on Canada, the European Union and Mexico until June 1, and has reached an agreement in principle with Argentina, Australia and Brazil, a source familiar with the decision said on Monday.

The decision came just hours before temporary exemptions were set to expire at 12:01 a.m. (0401 GMT) on Tuesday.

“The administration has reached agreements in principle with Argentina, Australia, and Brazil, details of which will be finalized in the next 30 days. The administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days,” the source said.

Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum in March, but granted temporary exemptions to Canada, Mexico, Brazil, the European Union, Australia and Argentina. He also granted a permanent exemption on steel tariffs to South Korea.

Trump administration officials have said that in lieu of tariffs, steel and aluminum exporting countries would have to agree to quotas designed to achieve similar protections for U.S. producers. South Korea’s permanent exemption is in exchange for having agreed to cut its steel exports to the United States by about 30 percent.

Canadian Prime Minister Justin Trudeau said on Monday that any move by the United States to impose tariffs on Canadian steel and aluminum would be a “very bad idea” guaranteed to disrupt trade between the two countries.

Canada is the largest source of steel imports into the United States, with a steel industry that is highly integrated with its southern neighbor.

Trump has invoked a 1962 trade law to erect protections for U.S. steel and aluminum producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China.

If the EU is subject to tariffs on the 6.4 billion euros ($7.7 billion) of the metals it exports annually to the United States, it has said it will set its own duties on 2.8 billion euros of U.S. exports of products ranging from makeup to motorcycles.
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