Category Archives: Resource Based Economy

Kenyas economic problems are not economic in nature. They are political. And theExecutive is not the only one to blame for this economic muddle. Parliament is an integral part of the problem. It has failed the Constitution and the people of Kenya by not exercising its constitutional mandate of controlling wanton borrowing and spending of the Executive.

President Uhuru Kenyatta must admit that his government has made costly economic and fiscal policy management decisions in the past eight years. He must focus his remaining short time in office to lead the country towards an economic stabilisation and recovery path.

The country needs a coherent evidence-based economic stabilisation and fiscal consolidation plan that includes seeking to negotiate and agree with creditors to suspend debt servicing for at least three years with a commitment to immunise core recovery plan from the political cycle.

The National Treasury bizarrely prepared 2020/2021 financial budget that was completely unhinged and divorced from the reality of the devastating Covid-19 pandemic. The budget priorities should be overhauled in special supplementary budget for the remaining part of the financial year. This is not the moment for huge capital expenditure on mega projects.

The FY 2020/2021 budget ought to have been informed by realities on the ground;Covid-19 andits socio-economic impacts. That is where money should have been directed to. That is what all responsible governments are doing the world over. Unfortunately the supplementary budget tabled before Parliament has adopted a 'business as usual attitude'.

The national government must completely overhaul the current Third Medium Term Plan (MTP III) 2018-2022. The existing economic conditions, Covid-19 devastation, shrinking revenue and the debt nightmare have rendered it irrelevant and redundant.

The National Treasury must prepare and present to Parliament an interim transitional Mid-Term Framework plan and budget for the FY 2021/2022. This process must also be carried by county governments.

The FY 2021/2022 budget must purposefully be about addressing the unprecedented health, economic and fiscal shocks occasioned by Covid19. There has to be intensive public participation and consultation. The new MPT should adopt and be guided by the principles of zero?based budgeting to ensure the country drastically reduces all expenditure that it can no longer afford.

Covid-19 has laid bare the stark realities of deep-seated inequalities, inequities and vulnerabilities in the society. The new MTP must reflect the constitutional reality that failure to restructure, align and reorder the old system of national planning and economic policy in accordance with the devolved system of governance and county economic development, poses the greatest economic and financial risk to our country. This is exacerbated by huge debt distress and budget deficit.

Counties must be the central drivers of the new MTP. This is because social and economic devolution is about people managing their local development affairs, developing their potential and setting their own development priorities sensitive to local realities.

The greatest potential for development support exists at the county level, with a focus on attracting investments, creating jobs and boosting demand. A devolved unit's role has expanded from providers of public goods and basic social services to include local economic development initiatives.

Forensic audit

There is urgent need for the National Treasury to open the debt register to an independent international agency for thorough forensic audit to see which debts are genuine, and which ones ended in the pockets of a few people. The comprehensive forensic audit of Kenya's debt will ascertain the true situation before debate on raising the borrowing ceiling can progress. It's foolhardy to proceed and raise the borrowing ceiling without a clear debt picture and its implications on economy.

The national and county treasuries must develop and enforce a public expenditure and financial accountability tool to deliver on three main budgetary outcomes: Aggregate fiscal discipline; strategic resource allocation and efficient use of resources for service delivery.

It will not be easy to return the economy and the lives of Kenyans to where they were before Covid-19. Kenya needs to forge new economic and fiscal social contract. This will require intensive participation and consultation between the people, businesses, the two levels of government, media and civil society in order to rebuild a more productive and equal prosperous society.

-Mr Ndungu is executive director, International Centre for Policy and Conflict. @NdunguWainaina

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Only tough choices will save economy - The Standard

CHARLOTTE, N.C.--(BUSINESS WIRE)--Bank of America today announced a goal of deploying and mobilizing $1 trillion by 2030 in its Environmental Business Initiative in order to accelerate the transition to a low-carbon, sustainable economy. This commitment will anchor a broader $1.5 trillion sustainable finance goal by both environmental transition and social inclusive development purposes, spanning business activities across the globe.

The private sector is well-positioned to ensure that the capital needed at the scale it is needed can drive the transition to a low-carbon, sustainable economy, said Bank of America Vice Chairman, Anne Finucane, who leads the companys environmental, social and governance (ESG), sustainable finance, and public policy efforts. We will meet our commitment by working with clients to provide lending, capital raising, advisory and investment services, and to develop financial solutions and drive innovation to ensure the transition to a sustainable economy.

Bank of Americas broader $1.5 trillion sustainable finance target is consistent with the United Nations Sustainable Development Goals (UN SDGs), and will spur transformative change nationally and around the world. Beyond the $1 trillion climate-related finance, the balance of the sustainable finance goal is focused on social inclusive development, scaling capital to advance community development, affordable housing, healthcare, and education, in addition to racial and gender equality.

We stand alongside our clients in helping drive the transition in sustainable lending, investing, and markets activity, said Chief Operating Officer Tom Montag, who co-chairs Bank of Americas Sustainable Markets Committee with Finucane. Bank of America will continue to mobilize players across the entire financial system to increase the flow of capital.

Environmental Business InitiativeTodays announcement increases Bank of Americas 2019 commitment of $300 billion to low-carbon, sustainable business initiatives, to $1 trillion by 2030 as part of its Environmental Business Initiative. This commitment advances an environmental transition across sectors to solutions in energy efficiency, renewable energy, sustainable transportation, resource efficiency, sustainable water and agriculture as well as improved forestry and pollution control measures. Since launching the Environmental Business Initiative in 2007, Bank of America has deployed more than $200 billion to low-carbon, sustainable business activities, including expanding its asset-based lending, tax equity investment and capital raising activities across current and emerging clean energy and power, transportation and other industry sectors important for environmental transition. Todays news follows the companys recent announcement to achieve Net Zero before 2050.

Leading innovation and development in Sustainable FinanceFinucane and Montag co-chair the companys Sustainable Markets Committee, which collaborates across business lines to deliver innovative financing solutions in support of the United Nations Sustainable Development Goals. The companys sustainable finance highlights include:

A top issuer of Green, Social and Sustainability bonds: In 2020, Bank of America issued a $1 billion corporate social bond to support those on the front lines of the coronavirus health crisis; and a first-of-its kind $2 billion equality progress sustainability bond to help advance racial equality, economic opportunity and environmental sustainability. Since 2013, the company has issued $9.85 billion in eight corporate Green, Social and Sustainability bonds.

For recent highlights of the banks ESG efforts, see page 38 of the Bank of America 2020 Annual Report. Further information can be found in the 2021 Proxy Statement and at http://www.bankofamerica.com/environment.

Bank of AmericaAt Bank of America, were guided by a common purpose to help make financial lives better, through the power of every connection. Were delivering on this through responsible growth with a focus on our environmental, social and governance (ESG) leadership. ESG is embedded across our eight lines of business and reflects how we help fuel the global economy, build trust and credibility, and represent a company that people want to work for, invest in and do business with. Its demonstrated in the inclusive and supportive workplace we create for our employees, the responsible products and services we offer our clients, and the impact we make around the world in helping local economies thrive. An important part of this work is forming strong partnerships with nonprofits and advocacy groups, such as community, consumer and environmental organizations, to bring together our collective networks and expertise to achieve greater impact. Learn more at about.bankofamerica.com, and connect with us on Twitter (@BofA_News).

For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom and register for news email alerts.

http://www.bankofamerica.com

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Bank of America Increases Environmental Business Initiative Target to $1 Trillion by 2030 - Business Wire

OCC baled for recycling. | Sergej57/Shutterstock

Recycled paper mill operator DS Smith predicts strong growth in corrugated packaging, long after the initial impacts of the COVID-19 pandemic have passed, the companys head of recycling said.

DS Smith is headquartered in Europe but operates two paper mills in the U.S., and the company has pushed further into the U.S. market in recent years. The company operates multiple U.S. box-making facilities and recycling facilities, focused on fiber-based packaging and OCC recovery.

The pandemic threw a wrench in the OCC market, driving up demand sharply at the same time that supply streams were adjusting. In a phone interview, Toby Earnest, director of recycling at DS Smith North America, discussed the impact of those disruptions.

Earnest also shared forecasts for growth in OCC demand, discussed the companys plans for further North American expansion, and provided insights on how Chinas import ban has impacted the global OCC market (this interview has been edited for brevity and clarity).

RR: How has the pandemic impacted the OCC market in recent months?

Toby Earnest, director of recycling at DS Smith North America

Toby Earnest: The pandemic has created a lot of volatility in the recovered fibers market. Weve seen supply decreases from the industrial, commercial, hospitality, restaurant industry. Those sectors were hit hard. Theyre coming back a little bit now and have been back on the comeback trail for a little while. Weve seen grocery experience goods spike, and of course the e-commerce business has spiked quite a bit since the recovery from the pandemic.

The pandemic accelerated the shift to online shopping and that e-commerce. That packaging ends up in our residential sector. The addition of our recycling operations in North America has kind of positioned us to help use our robust supply chain to capture some of those recovered fibers in the market needed to fuel our essential paper mills and other paper mill partners.

We announced that paper recycling facility in Reading, Pa. just about a week before the pandemic and lockdowns and restrictions took place. Having that recycling facility kind of gave us a circular economy trifecta that we like to have, as we have a paper mill in Reading, Pa. and also a packaging facility there, all within a mile or two of each other.

That circular economy trifecta also allows us to recover fibers from our packaging facility, other packaging facilities in the area, along with some distribution centers and other fiber streams. We bring those into the recycling plant for processing and we send those to our paper mills, our carton paper mills, and they generate paper and send it back to the packaging plants to produce the essential packaging products for our customers.

So a lot of changes over the last 12 months due to the pandemic, but we feel like weve evolved and adapted well within the market.

Is it mostly OCC youre using, or other grades?

At our mills, its mostly OCC.

Were going to have to continue to find ways to find synergies in the supply chain in total to keep ahead of OCC demand, because from everything I read and the people I talk to, the demand itself is expected to increase worldwide every year through 2025.

Are MRFs a significant channel for sourcing recovered fiber at DS Smith?

It is one of the streams that we use. We try to work with those larger facilities, the Waste Managements, the Republics, those material recovery facilities.

We try to work with them because we operate in the cities they operate in. So I think its being a part of that community, we need to be a part of that solution as well.

What has it been like sourcing OCC during the pandemic? Since the clean commercial generators have slowed, are you having any trouble getting enough material?

I think negotiating a new reality around recovered fibers has been a challenge for everyone. It is difficult. OCC is now and was before, but I think now more of a global commodity, well-sought-after in the U.S. as well as across the world.

DS Smith, here in the U.S. and in Europe, weve leveraged some of our established customer relationships, our supplier relationships, our supply chain relationships, to help weather this storm. I think were going to have to keep doing that.

Were going to have to continue to find ways to find synergies in the supply chain in total to keep ahead of OCC demand, because from everything I read and the people I talk to, the demand itself is expected to increase worldwide every year through 2025. Our circular business model is helping build bridges to get to that reusable OCC.

Our CEO has stated many times that we want to grow in the U.S. market. The packaging is going to be up 3.3% in total, and I think the U.S. market is primed to get a large percentage of that.

Do you tie the projected OCC demand directly to what were seeing in the corrugated market, that e-commerce is driving these packaging changes?

Absolutely. We work hand in hand with a lot of those major customers.

Were up 44% year over year just in that e-commerce sector. Initially during the pandemic, volumes were down, but once lockdowns and restrictions eased and we made adjustments, and really just our industry made adjustments to the new COVID reality, growth has been fast and furious. For us, were seeing it. Were feeling it. Projections for the packaging market as a whole, its set to grow 3.3% in 2021. Were going to be a part of that growth.

DS Smith previously predicted significant growth in the U.S. corrugated market in the years to come, and the company expressed interest in expanding its presence in the U.S. That was before COVID hit. How does the pandemic impact that growth?

We absolutely plan to grow in the U.S. market. I think the market is right for us to grow here, and our CEO has stated many times that we want to grow in the U.S. market. The packaging is going to be up 3.3% in total, and I think the U.S. market is primed to get a large percentage of that. Its kind of a ferocious growth in packaging for the U.S., and I think DS Smith definitely wants to be a part of that growth and has plans in place to make that happen.

This year brings another major shakeup in the global recovered fiber market, as China has officially banned imports of all recovered fiber. Does this impact your operations? Does it present an opportunity to bring in material displaced by that market shift?

From a fiber standpoint, China moving out of the market has created opportunities for other countries.

A lot of the companies that were heavily involved in China have now moved to India, to Malaysia, to Thailand, some of the other countries surrounding China, and have put a lot of infrastructure in place to provide pulp from OCC and recyclable products back into China.

That trend, and Chinese imports going down, they started that in 2017 when they announced that they were going to do it and not take any more recycled fibers into the country. I think our industry was well aware that that was coming. Its kind of been factored in all along. We knew it was coming. We saw the decreases in export from Europe, from the US, every year. They started out in 2017 taking 25 million tons. That number decreased to 18 million tons in 2018, 11 million tons in 2019 and in 2020 they took just about 5.5 or 6 million tons. And now theyre not taking any.

But that was the plan all along. We all saw it coming. We all saw the infrastructure that was being developed around the world to help compensate. Even in the U.S., theres been investments from Asian companies in the U.S. We saw that increased investment with Nine Dragons and some of the other companies.

The fiber need is still there. Whether theyre taking it directly into China or not is not paramount to whats really going on. The fiber need is still there, and that growth is still there. If youre going to grow packaging 3.3%, youre going to have to have the fiber.

January was the first month of Chinas all-out import ban, and the U.S. export figures reflected that as exports to China had decreased almost entirely. But overall exports of the material were up, so other countries have really filled that void.

Its going everywhere. Its going to India. Its going to Southeast Asia. Its going to Latin America. Like I said, this is really a global commodity, and its going everywhere.

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Q&A: Why OCC will be in high demand as a 'global commodity' - Resource Recycling

Small businesses and large multinational corporations face incredible challenges and uncertainty in todays world. Whether an uncertain economy, continuing impact of a pandemic, or the rapidly changing natural environment of water scarcity, ecosystem collapse, record high temperatures, wildfires, and sea level rise, todays CEOs have a full docket of issues, all of which one way or another intersect with our changing planet.

Theres no shortage of authoritative voices sounding alerts to these challenges. The World Economic Forums Global Risks Report 2021 highlights that the natural resource crisis impacts business continuity, growth, and positive social impact. In a recent Brookings essay, Rebooting the Climate Agenda: What should the priorities be? Senior Fellow Amar Bhatacharya writes, The damages due to climate change and biodiversity loss could be even bigger and more lasting than those we are experiencing from COVID-19. Decisions made now are crucial in shaping the future of people and the planet: we must not go back to the old normal. The imperative now in recovery is to build back better on a path of sustainable, inclusive, and resilient growth.

President Bidens Executive Order on Tackling the Climate Crisis at Home and Abroad is a welcome start to addressing climate risk and action. As stated in the very first paragraph of the Order, Together, we must listen to science and meet the moment.

As we applaud the presidents words, we must also recognize that climate isnt the only moment that companies need to meet and listening to the science will require a major change in how the U.S. science agencies such as NASA currently do business. Why? Because it must involve an ongoing dialogue and engagement with business, specifically businesses with which NASA has not traditionally worked.

While legacy aerospace companies come to mind when we think of NASA and industry, an entirely new business community stands to directly benefit from NASA engagement. These are not suppliers, but potential science and data consumers of NASAs unique, robust and unparalleled space-based observations of the Earth. From the worlds largest beer producer, AB InBev, to pharmaceutical giant, Novartis, to information technology leader, IBM, businesses stand to gain important insights from NASA Earth Science and for different reasons.

With more than 20 ongoing satellite missions, numerous instruments on the International Space Station, cutting edge data analytics and visualizations, and a treasure trove of historic data, NASAs Earth science program provides insights into our atmosphere, land, and oceans, all of which represent the starting point for an environmental information ecosystem that results in NOAAs weather, ocean, and climate services, USDAs agricultural forecasts, the Department of the Interiors conservation programs, EPAs air quality analysis, and, in many cases, numerous analyses across the national security sector.

Of a group of companies that participated in roundtable discussions focused on NASA science, many noted that it was their first introduction to NASAs vast science and data analytic resources. The business representatives shared their interests in examining not only climate, but water, biodiversity, air quality, and sustainability. AB InBev, for example, stressed their interest in working with the space agency to explore and apply NASA data to map risk and opportunities related to changing climate and water conditions. Others emphasized the value of NASAs biodiversity data for protecting unique and critically important ecosystems for biopharma products, while still others hoped to gain greater knowledge and access to cutting-edge data analytics, AI efforts, and visualizations. These representatives stressed the need to identify an entry point for industry data consumers, opportunities for collaboration, and the importance of continued dialogue.

To truly listen to science NASA should think more broadly about their data users, look beyond the Academic sector, and recognize a new and growing private sector customer base for their products. Such an approach will maximize our precious national investment by ensuring that more can listen, learn, and meet the moment. NASAs valuable, cutting-edge Earth science research recently appropriated at nearly $2 billion for FY 2021 should be viewed as a potential stimulus for U.S. business. Much like the COVID-19 vaccines, the Federal government just needs to deliver this critical resource to those that need it and increase production through better research to operations with partner agencies like NOAA and value-added businesses that create environmental information products and forecasts.

Imagine the possibilities when U.S. investment in the worlds best science about the planet leads to more sustainable business practices and efficiencies, directly strengthening the U.S. economy while protecting the environment? Imagine if U.S. business could easily tap the most timely and relevant information on forests, oceans, air quality, water resources, and ecosystems? Imagine NASA a symbol of our nations most admired scientific and technological achievements provided its unique satellite-derived insights about the Earth as a foundation to build back better? Now, that would be a moment that I think we all hope to meet.

Nancy Colleton, is the president of the Arlington, Virginia-based Institute for Global Environmental Strategies (IGES) and studies Earth observations applications for U.S.business and conservation.

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Op-ed | NASA Earth Science to Meet the Moment - SpaceNews

ROCHESTER, N.Y., March 30, 2021 /PRNewswire/ --The latest Paychex | IHS Markit Business Employment Watch shows notable increases in jobs growth in March across all four U.S. regions and nearly all states and metros analyzed in the report. The Small Business Jobs Index increased to 94.25 in March. While the index remains 4.03 percent below its March 2020 level, last month's 0.30 percent increase has been the most significant one-month gain since 2013.

Another leading indicator of economic strength, hourly earnings, reached 2.98 percent, its fourth month of growth. Weekly earnings also increased, rising to 3.58 percent, a result of growth in weekly hours worked.

"The Small Business Jobs Index revealed a meaningful increase in March. But there remains much ground to make up," said James Diffley, chief regional economist at IHS Markit.

"With vaccinations ramping up across the country and business restrictions easing as a result, small business employment growth is starting to move in a positive direction. Increased hiring and wage growth in the leisure and hospitality industry, which was particularly impacted over the past year, are promising signs," said Martin Mucci, Paychex president and CEO. "The extension of the Paycheck Protection Program for two more months provides additional support as the loans should help qualifying businesses weather remaining challenges resulting from the COVID-19 pandemic."

The monthly report is compiled from aggregated payroll data of approximately 350,000 clients on the Paychex human capital management (HCM) suite. Paychex software and solutions reach 1 in 12 American private-sector employees, making the Small Business Jobs Index report an industry benchmark. The national jobs index uses a 12-month same-store methodology to gauge small business employment trends on a national, regional, state, metro, and industry basis.

In further detail, the March report showed:

The complete results for March, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at http://www.paychex.com/watch. Highlights are available below.

Note: Data presented for the month of January was collected between February 12, 2021 and March 18, 2021.

National Jobs Index

National Wage Report

Regional Jobs Index

Regional Wage Report

State Jobs Index

Note: Analysis is provided for the 20 largest states based on U.S. population.

State Wage Report

Note: Analysis is provided for the 20 largest states based on U.S. population.

Metropolitan Jobs Index

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Metropolitan Wage Report

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Industry Jobs Index

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The Other Services (excluding Public Administration) industry category includes religious, civic, and social organizations, as well as personal services, including automotive and household repair, salons, drycleaners, and other businesses.

Industry Wage Report

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The Other Services (excluding Public Administration) industry category includes religious, civic, and social organizations, as well as personal services, including automotive and household repair, salons, drycleaners, and other businesses.

For more information about the Paychex | IHS Markit Small Business Employment Watch, visit http://www.paychex.com/watch and sign up to receive monthly Employment Watch alerts.

*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.

About the Paychex | IHS Markit Small Business Employment WatchThe Paychex | IHS Markit Small Business Employment Watch is released each month by Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to medium-sized businesses, and IHS Markit, a world leader in critical information, analytics, and expertise. Focused exclusively on small business, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful tool delivers real-time insights into the small business trends driving the U.S. economy.

About PaychexPaychex, Inc. (Nasdaq:PAYX) is a leading provider of integrated human capital management solutions for payroll, benefits, human resources, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by more than 45 years of industry expertise, Paychex served more than 680,000 payroll clients as of May 31, 2020 across more than 100 locations in the U.S. and Europe, and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting paychex.com and stay connected on Twitter and LinkedIn.

About IHS Markit (www.ihsmarkit.com)IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world's leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners 2021 IHS Markit Ltd. All rights reserved.

Media ContactsLisa FlemingPaychex, Inc. +1 585-387-6402[emailprotected]@Paychex

Kate SmithIHS Markit+1 781-301-9311[emailprotected]

Colleen Bennis Mower +1 585-389-1865[emailprotected]

SOURCE Paychex, Inc.

http://www.paychex.com

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Small Business Jobs Growth Shows First Significant Gain Since the Start of the Pandemic in the US - PRNewswire

Financial Summary

In 2020, CICC posted

As of December 31, 2020, the Company had

BEIJING, March 30, 2021 /PRNewswire/ -- China International Capital Corporation Limited ("CICC" or "the Company", 601995.SH, 3908.HK) announced its annual results for the year ended December 31, 2020. As at the end of 2020, the total assets of the Company amounted to RMB521.62 billion, representing an increase of 51.2% compared with that at the end of 2019; net assets(note) amounted to RMB71.63 billion, representing an increase of 48.3% compared with that at the end of 2019. The Company recorded total revenue and other income of RMB32.40 billion, representing an increase of 42.2% year on year; and net profit(note) of RMB7.21 billion, representing an increase of 70.0% year on year, with a weighted average return on net assets of 13.5%.

In 2020, confronted with the impact of COVID-19 pandemic as well as the complex and harsh market environment, CICC has actively coped with the challenges and done well in pandemic control and business operations. By focusing on serving the overall situation of "ensuring six priorities" and "safeguarding the stability in six areas" for steady economic momentum, and implementing the strategic development initiatives, our businesses maintained rapid development, with operating continuously improving efficiency, and we delivered sound returns for our shareholders. Our network and customer coverage was further strengthened, our product and customer service capabilities continuously improved, our business collaboration and digital transformation achieved positive results, and our research and information technology foundation was further strengthened. We continued to explore into domestic market and develop strong cross-border advantages, and strive to enhance our franchise and market influence, so as to significantly accelerate our growth in both scale and strength.

Realizing Comprehensive and High-quality Development in Six Major Businesses

Our investment banking business continued to fully serve the real economy financing. In 2020, our Company ranked first in terms of global IPO underwriting amount by PRC-based issuers, No.2 in terms of A-share IPO underwriting amount, first acting as JGC in terms of Hong Kong IPO underwriting amount, which further consolidated our first-mover advantages in the new economy industry. Our Company ranked fourth among securities firms in terms of onshore bond offerings, and first among Chinese securities firms in terms of the underwriting amount of investment-grade USD bond offerings by PRC-based issuers, making our innovative structured business remain ahead. As for the M&A business, our Company has remained No. 1 on the league table in China, and played a leading role in a number of large-scale industrial restructuring projects for state-owned and private enterprises. Our Company actively grasped the opportunities in the primary market, consolidated our advantages in benchmark projects, and explored innovative financing instruments, so as to provide all-round financing services for deepening the supply-side structural reforms and accelerating the development of the new economy.

Our equities business further consolidated its leading position in the market. In 2020, our equities business maintained development momentum by focusing on the "dual-cycle and dual-capital" platform. We actively expanded institutional coverage, improved our product innovation capabilities, strengthened cross-border business presence, promoted systems development and digitalization, and endeavored to provide the one-stop comprehensive financial services covering "sales, trading, investment and research, products and cross-border business" for domestic and foreign professional investors. In 2020, the prime brokerage business platform in Mainland China improved continuously; the derivative products business achieved rapid customized and standardized development; the stock connect business ranked top and grew steadily in terms of turnover and market share; and the capital introduction business developed steadily and helped expand the ecosystem of institutional customers.

Our FICC business structure and foundation continued to improve. In 2020, our FICC foreign exchange business made breakthroughs and the commodities business grew significantly, which further improved the business structure, forming into the domestic and foreign business system covering interest rate, credit, structuring, commodities and foreign exchange, and contributing to the improvement of our comprehensive service capabilities. In spite of the volatile market environment, our trading business achieved steady investment income by virtue of strong trading and risk control capabilities. In the meantime, the business foundation was further strengthened, as the three platforms of capital, operation and system offered strong support for business development.

The comprehensive service capabilities of our asset management business improved comprehensively. As at the end of 2020, the AUM of the asset management segment exceeded RMB560 billion, representing a significant year-on-year increase of 75%, which further demonstrated our advantages as a comprehensive platform. On the basis of continuously improving the product layout and enhancing the research capability, we made efforts to strengthen the coverage of domestic and foreign institutional customers, and vigorously expand the retail channels and overseas channels, thereby steadily improving the sustainable development capability of our asset management business. The active management capability of CICC Fund Management has been further intensified, and our mutual fund products performed better than those on the market. In the meantime, CICC has made great efforts to seize new business opportunities such as the public offering of REITs proactively, in an attempt to develop a complete product line with CICC features.

We maintained industry-leading position in terms of the total assets under management of private equity investment. As of the end of 2020, the AUM of CICC Capital amounted to over RMB300 billion. We maintained industry-leading position even under the harsh market environment of great fundraising pressure. On the basis of sound business foundation, we positively strengthened cooperation with multinational corporations and large-sized industrial groups, and continued to deepen business presence in key regions. Therefore, our products such as industrial funds, green funds and new special account management funds developed well and our product lines were further enriched. CICC Capital will accelerate the construction of a unified and open management platform to realize resource concentration and management collaboration internally and to form an open platform ecosystem externally.

We achieved remarkable results in transformation and development of our wealth management business. In 2020, our wealth management business grew significantly in terms of product assets, trading market share and total assets in customers' accounts, with steady improvement of our market competitiveness. The buy-side investment advisory business led the development of the industry, so we tried to improve the assets holding experience of customers through multiple asset allocation approaches; as the hierarchical service system for customers was further improved, the scale of our private wealth management business expanded rapidly; as the digital transformation continued to advance, we made great breakthroughs in the technology-driven customer service systems. The continual improvement of our professional products and service systems has laid a solid foundation for the all-round transformation and development of our wealth management business.

Continuing to Realize Solid Progress in Research and Information Technology

Our research work helped enhance the market influence at home and abroad. Our research business focused on the global market, and provided comprehensive research services and investment analysis covering macro-economy, market strategy, fixed income, asset allocation, stocks, commodities and derivative products for domestic and foreign customers. These research products were widely recognized by the investors at home and abroad for their independence, objectivity and thoroughness. In 2020, a number of in-depth research reports aroused strong response from the market, and remarkable business development results were achieved driven by research. CICC Global Institute was established as a new think tank to contribute more CICC research wisdom to public policy-making and financial market development.

Information technology continued to strengthen our business support capabilities. In 2020, our IT organizational structure was further improved. We established dedicated teams to support main business lines to strengthen business interaction and integration, and to enhance the response capability and efficiency of IT personnel. The front, middle and back office information systems were further enhanced to fully improve our online and digital operation and management level, and to support the plan for remote and shared office. We seized the opportunities arising from digital transformation to accelerate the optimization of IT governance system, the construction of integrated management platform and the integration of system and data. Therefore, the supporting capability and driving effect of science and technology for business development were continuously enhanced.

Capital Operation and Integration

The Company attaches great importance to capital operation and regards it as an important approach for realizing rapid development. In November 2020, the Company accurately grasped the market window to complete the listing of A Shares, and raised total proceeds of RMB13 billion, further expanding our capital strength. In the future, the Company will make overall use of the "A+H" dual financing platform to fund the sound and rapid development of our businesses.

We established Jinteng Technology, a joint venture technology company, as an important vehicle to invest in financial technology. In June 2020, CICC and Tencent set up a joint venture financial technology company named Jinteng Technology, which set a precedent in the domestic securities industry. Jinteng Technology and CICC Wealth Management jointly carried out targeted marketing to affluent customers through data-based operations, in an attempt to explore a new operating model combining both online and offline activities.

We further promoted the integration of wealth management businesses to materialize potential synergy. In 2020, the wealth management segment was well integrated, as the integration of OTC trading system was implemented, and the integration of personnel management was accelerated. The Company will steadily promote the "1+1>2" integration effect by continuously focusing on systerms integration and management mechanism innovation.

Outlook

2021 will be a critical year for CICC to deepen strategy implementation and digital transformation. The Company will focus on the "Three + One" strategies, i.e. "digitization, regionalization and internationalization" and "One CICC", and strive to enter a higher stage of development in terms of both scale and quality by increasing resource investment, improving network layout, accelerating transformation and development, and consolidating the middle and back-office capabilities.

NoteNet assets refer to total equity attributable to shareholders of the Company.Net profitrefers to net profit attributable to shareholders of the Company.

China International Capital Corporation Limited (CICC):

China International Capital Corporation Limited (CICC, 601995.SH, 3908.HK), as the first joint-venture investment bank in China, provides comprehensive one-stop investment banking services for domestic and overseas companies, institutions and individuals. Since its inception in 1995, the Company has adhered to the core values of "by the people and for the nation, professionalism and diligence, innovation and entrepreneurship, client first, and integrity", and committed to making itself a first-class international investment bank based in China and a critical player in the future financial system. The Company is qualified for both domestic and overseas securities business operations, having set up a broad range of international business network. Headquartered in Beijing, the Company has set up a number of branch companies and subsidiaries in Mainland China, owns more than 200 securities branches in 28 provinces, municipalities and autonomous regions in China, and established offices in a series of international financial hubs including Hong Kong, New York, London, Singapore, San Francisco, Frankfurt, Tokyo etc., which enables the Company to provide one-stop domestic, overseas, and cross-border financial services. The Company has a comprehensive and balanced business structure including investment banking, equities, FICC, asset management, private equity investment, wealth management and research.

SOURCE China International Capital Corporation Limited

Excerpt from:

CICC Announces 2020 Annual Results Net Profit Achieves RMB7.21 Billion Increases by 70% Year on Year - PRNewswire

Executive Summary

Russias Arctic ambitions have attracted increasing attention in the West over the past decade as climate change opens up new opportunities in the region for navigation and exploration of its riches. For its part, Moscow casts a wary eye on what it sees as a challenge from the United States and the North Atlantic Treaty Organization (NATO) to its position and ambitions there. The Kremlins rhetoric about Western encroachment has become more strident, in sync with its enhanced military posture and ambitious economic and infrastructure projects.

Russian interest in the Arctic has deep historic roots that extend all the way to the sixteenth century and the conquest of Siberia driven by the never-ending quest for more resources and secure trading routes. Modern-day Russian posture in the Arctic is integral to its overall confrontation with the West, in which Europe is the principal theater. The saber-rattling in the Arctic and threatening rhetoric are driven by several factors: preparations for the unlikely, but potentially catastrophic contingency of war in Europe, the need to secure its second-strike nuclear capabilities (the bulk of which is based around the Kola Peninsula), and the quest for resources to pay for the proverbial guns and butter as the competition with the West shows no sign of abating. Great-power ambitions and the interests of powerful bureaucratic elites and business interests also play a role.

It remains to be seen whether Russia will be successful in realizing these ambitions. Its nuclear and conventional naval forces in northwest Russia are increasingly vulnerable to NATOs long-range precision weapons. It is unclear whether the development of the Northern Sea Route (NSR) along Russias northern coastline into a major shipping route between Europe and Asia and the associated commercial projects are feasible and sustainable in the face of high costs and logistical complexity of operating in difficult climatic conditions with limited infrastructure, increased commercial competition from other countries, uncertain demand for hydrocarbons as the world shifts to green technologies, and the possibility of additional Western sanctions. The Kremlins posture in the Arctic is likely to continue as it enjoys backing from President Vladimir Putin and top military, government, and business actors. Its ability to achieve these broad ambitions for the region, however, is questionable at best.

Rumer, a former national intelligence officer for Russia and Eurasia at the U.S. National Intelligence Council, is a senior fellow and the director of Carnegies Russia and Eurasia Program.

Russias conception of its security requirements and NATOs mutual-defense and deterrence commitments on the other hand have resulted in a tense standoff along the alliances northern flank as their forces operate in close proximity. Tempting as it may be to view the Arctic through the prism of great-power competitionwhich undoubtedly would fit with Russias quest for recognition as a great powerthere is little to suggest that its military posture in the Arctic is a fundamentally new undertaking. Rather, it signals the return to a version of its Cold Warera posture centered around long-standing missions of protecting the sanctuaries of its ballistic missile submarine fleet and operations in the North Atlantic in the event of a war in Europe. Yet the Russian military is resuming these missions with fewer resources and facing a more formidable array of adversary capabilities than during the Cold War.

Russia has staked out ambitious territorial claims in the Arctic. Its rhetoric notwithstanding, it has thus far pursued them through legal means in compliance with the terms of the United Nations (UN) Convention on the Law of the Sea, which it has signed and ratified.

Russias actions in the Arcticits aggressive rhetoric and its far-reaching territorial claimshave done little to improve its diplomatic position there vis--vis other Arctic states and only antagonized them. Its only partner in its Arctic pursuits has been China, which claims that it is a near-Arctic statea claim rejected by the United States and likely viewed with suspicion by other Arctic nations.

Richard Sokolsky is a nonresident senior fellow in Carnegies Russia and Eurasia Program. His work focuses on U.S. policy toward Russia in the wake of the Ukraine crisis.

Considering the long-term nature of Russias confrontation with the West, the return to the relatively benign geopolitical environment in the Arctic that existed there in the 1990s is unlikely. Moreover, the current situation is not due to a misunderstanding, but rather to a clash of the two parties interests. That leaves two broad avenues for managing the standoff:

The alliance should continue to manage competition with Russia through a combination of resolve and restraint, improving and demonstrating its capabilities for defense and deterrence, but without overreacting to Russian muscle-flexing. Striking the right balance will be difficult and will require communicating to Russia clearly where the allies interests, objectives, and redlines are. The allies have been there before.

During the first postCold War decade, Russia approached the Arctic as an area of low tensions, where cooperation with other powers in addressing common challenges was desirable and feasible.1 Gradually, however, as relations with the West deteriorated, and especially since its 2014 invasion of Ukraine, Russia has adopted a much more competitive, even confrontational, perspective on the Arctic. Instead of emphasizing the benefits of cooperative engagement, its leaders have articulated their view of the Arctic as a sphere of military and economic expansion, and an arena for their great-power ambitions.2 As a result of this changing attitude, Moscow has prioritized military superiority to counter what it claims is a growing U.S./NATO challenge to its interests there.

By any objective standard, U.S./NATO military deployments in the Arctic do not currently represent a threat to Russias Northern Fleet or to its other military assets there. The region possesses an abundance of natural resources, especially oil and gas, but these are available elsewhere in Russia. Exploring and extracting them in the Arctic requires huge capital investments and modern technology that would stretch its capacity. Global warming is opening up new commercial opportunities for shipping and fishing, but there is scant infrastructure in the region to capitalize on these opportunities, and rectifying this deficiency will be costly.

Paul Stronski is a senior fellow in Carnegies Russia and Eurasia Program, where his research focuses on the relationship between Russia and neighboring countries in Central Asia and the South Caucasus.

Russias evolving Arctic ambitions have engendered growing concerns among other Arctic nations, yet surprisingly little is known about the basis for these ambitions. This paper therefore addresses the following questions: What are the drivers of Russias Arctic policy? How does it define its interests in the region and what tools does it employ to advance them? Who are the Russian stakeholders that would benefit from the exploitation of the region? What are the prospects for Russia realizing its ambitions? What are the implications of its actions and ambitions for U.S./NATO interests and policy?

Since Vladimir Putin first became president, the Arctic has evolved into an increasingly important arena of Russian foreign, military, and economic policy. The Kremlins interest in the region became apparent soon after Russia emerged from its time of troubles in the 1990s and gradually resumed an active posture on the world stage in the early 2000s.

Russian involvement in the Arctic dates back several hundred years. Much of this historical activity was supported and encouraged by successive governments and aimed at promoting trade and extracting natural resources. The discovery of oil and gas in Siberiabelow and above the Arctic Circlein the twentieth century offered wealth and hard currency, enabled domestic consumption, funded the Soviet military machine, and provided the economic foundation for the Soviet Union to pursue its foreign policy objectives.

The exploitation of Arctic riches accelerated in post-Soviet Russia. Oil and gas played the pivotal role in restoring the countrys economic fortunes in the early 2000s, underwriting domestic stability, fostering Putins rise as the countrys undisputed leader, and returning Russia to the world stage as an aspiring great power intent upon recouping its losses in Europe and reclaiming its rightful place in the international system.

The role of oil and gas in Russias Arctic ambitions was highlighted in 2006 as part of the Kremlins agenda to establish the country as an energy superpower and to justify its inclusion in the G8.3 Rising temperatures would make those riches more accessible and ensure the Kremlin a steady source of revenues as well as market and geopolitical influence in Europe and Asia. And without any contenders to challenge these ambitions, Russia had a shot at securing its place as a major geopolitical presence in the Arctic.

Even the high projected costs and technological difficulties associated with exploration and recovery of Arctic offshore resources did not appear to pose a major obstacle to the Kremlins ambitions. Projects would be open to participation by foreign energy companies with their technology and capital, and their participation would make them powerful stakeholders that could influence Western governments policy choices toward Russia. Moreover, thanks to the warming temperatures in the Arctic, the development of the NSR along Russias Arctic coastline would provide the Kremlin with an opportunity to diversify its energy policy by eventually linking the Russian Arctic to markets in Asia, thus reducing the countrys reliance on Europe as a critical energy market and on Ukraine as a critical conduit to that market.4

With oil and gas accounting for as much as 60 percent of Russias export revenues and upward of 30 percent of its federal budget, the motive behind its Arctic ambitions is not difficult to discern. The revenue from these projects would help sustain several critical priorities: further consolidation of Putins hold on political power as the leader who returned Russia from the abyss and restored it to greatness, the accumulation of funds to hedge against future economic or political adversity, and the rebuilding of the military, which had long suffered from neglect and was in need of modernization.

Europe has always been the most important strategic theater for Russia. Its quest for security, great-power status, and recognition as an equal by other European countries has long been reflected in its preoccupation with strategic depth and a difficult relationship with major European powers. Immediately following the fall of the Soviet Union, Russia suffered major setbacks to these objectives and was relegated to the margins of the continents security, diplomacy, and geopolitics.5 The eastward expansion of NATO dealt a major blow to Russias historical ambitions and objectives in Europe, and especially to its quest for strategic depth as a measure of physical security of the homeland. NATO claimed responsibility for European security, and from Moscows perspective, other major European powershistoric adversarieswould have a voice and a veto at the NATO table while Russia would be left out in the cold.

By the end of the 2000s, Russian officials raised with increasing frequency concerns about the proximity of alliance forces to the Russian heartland and continued NATO expansion, despite the fact that most of NATOs military capabilities had been redirected toward non-Russian threats. Moscow was particularly alarmed by the prospect of any future membership in the alliance by Georgia and Ukrainesomething that the Kremlin saw as unacceptable and a threat to Russia.

However, it was Russias invasion of Ukraine in 2014 that led to a fundamental shift in NATOs posture and Russias designation as the principal threat to the alliances security. These reactions by NATO to Russian aggression against Ukraine in turn magnified Russian perceptions of threat from the West. More recently, the unrest in Belarus has added to the Kremlins growing perception of vulnerability, raising doubts about Minsks reliability as an ally in the event of a large-scale conflict with NATO.6

Russias investments in Arctic energy projects are part of its broader strategy toward Europe and the wider world, but Europe is the most important arena in the Kremlins strategic calculations. The revenue from these investments helps sustain Russias defense capabilities needed for balancing against NATO, while Arctic navigation and maritime access to Asia will enable it to reduce its dependence on Europe, which it sees as hostile and increasingly intent on constraining Russia through a military buildup on its border and seemingly endless economic sanctions.7

Russia has three key military interests in the Arctic. Foremost is securing the second-strike capability of its ballistic missile submarine (SSBN) force on the Kola Peninsulahome to seven of the Russian Navys eleven ballistic missile submarinesin a conflict with NATO.8 Concerns about the security of these assets largely account for Russias efforts to improve its anti-access/area-denial systems and monitoring and surveillance capabilities, the increasing tempo of strategic exercises and patrols of long-range bombers and anti-submarine warfare (ASW) aircraft, and the upgrading of military infrastructure to support these operations.9

A second, partly related, interest is protecting Russias ability to operate in the North Atlantic and the European Arctic in the event of a conflict with NATO. Unlike Russias other fleets, the Northern Fleet has direct access to the Barents and Norwegian Seas and the Atlantic Ocean. Its ability to operate there could be critical in determining the outcome of a conflict on NATOs eastern flank.10

A third interest is military protection for Russias growing economic development, investments, and commercial interests in the Arctic. The vastness of the region, the long and open borders whose only protection is offered by remoteness and inhospitable climate, the poor communications systems and infrastructure, the overall harsh environmental conditions, and growing civilian activities there increase the risk of maritime shipping, nuclear, and environmental accidentsand thus the need to be able to rapidly deploy military-response capabilities.

Russias peacetime military presence in the Arctic and the allocation of resources to improve its military capabilities and infrastructure there are aligned with these interests. Maintaining a predominant military position in the Arctic is seen as a necessary component of Russias posture there, given the Kremlins priorities in Europe and tense relationship with the West, NATOs enhanced military capabilities near the Russian border, and Western sanctions targeted to constrain Russian energy exploration and production activities in the Arctic.

Russias sparsely populated Arctic territories account for 10 percent of the countrys gross domestic product and roughly 20 percent of its exports. Hydrocarbons comprise the major share, but these also include nonferrous and precious metals, stones, and other raw materials.11 About one-third of all fish harvested in Russia comes from Arctic waters, making it a key food source. The Russian government hopes to increase that share by 2030, as warming ocean water pushes fish stocks northward.12

Tapping these resources is Russias primary economic interest, but doing so will require developing costly and complicated road, rail, aviation, and maritime transportation infrastructure to connect the Arctic to other parts of the country and beyond. It will also require expanding icebreaking capabilities and developing ports, weather stations, and emergency response facilities. Building this infrastructure is Moscows second economic priority in the region.

Finally, Russia aspires to transform its northern coast into the Northern Sea Route, a navigable maritime corridor through Arctic waters. Currently passable without icebreaker escort only in the summer months, the corridor is used mainly by Russian vessels to transport Arctic resources to markets in Asia. Russias 2020 Arctic strategy, however, envisions transforming it into a competitive Asia-Europe maritime corridor by 2035.13

Russia has pursued its ambitions in the Arctic with legal, diplomatic, economic, military, and information tools that it has wielded with considerable skill and persistence.

Russia is a signatory to the United Nations Convention on the Law of the Sea (UNCLOS), which the United States has never ratified. The Kremlin has based its claim to a large portion of the Arctic seabed as its exclusive economic zone under UNCLOS, arguing that the geology of its continental shelf is consistent with the terms of the convention.14 After its initial claim was rejected on technical grounds by the UN in 2001, Moscow submitted another in 2015.15 Its claim conflicts with similar ones submitted by Canada and Denmark, but if successful, it would grant Russia exclusive rights to exploit offshore resources in a vast portion of the Arctic Ocean. While it awaits the decision, Russia is negotiating bilaterally with Canada and Denmark on ways to reconcile their positions.

For regional diplomacy, Russia relies on the Arctic Council, which is the main international forum dealing with matters of governance and cooperation in the region.16 The council brings together the eight Arctic member states, organizations representing the regions native peoples, and several observer states and organizations, including China. The Arctic Councils 1996 founding Ottawa Declaration limits its mandate to issues of environmental protection, scientific research, and sustainable development.17 Military and security matters were purposely left out. Russia will take over the Arctic Councils two-year chairmanship in May 2021 and has pledged to launch regional cooperation initiatives to reduce greenhouse-gas emissions, attract investment, and improve the condition of Indigenous People.18 Always eager to be seen as influential on the world stage, Russia will use its chairmanship to promote its soft power image on Arctic issues, even if concrete follow-through on environmental issues or Indigenous rights is lacking.

Russia also participates in the Arctic Five forum, which groups the Arctic littoral statesCanada, Denmark, Norway, Russia, and the United Statesand does not include other international or nongovernmental actors.19 The Arctic Five meets on an ad hoc basis, often on the sidelines of other international gatherings. The Arctic Five generally serves as a discussion platform for maritime issues, including fisheries management and competing claims to the continental shelf. As an informal body, it is sufficiently flexible to deal with other issues as required.

Despite Russias limited resources and anemic economy, the Kremlin has committed nontrivial fiscal and monetary resources to support its ambitious agenda in the Arctic. The Russian government has offered tax incentives to large energy, mining, and infrastructure companies to invest in the regionespecially in the eastern/Siberian Arctic territories, which to date have seen far less development than those Arctic regions west of the Urals.20

Some of these incentives are clearly intended for companies with close Kremlin connections. For example, in 2019 the government announced $41 billion in tax incentives over the next thirty years for Rosneft to develop the Vostok oil field, with the goal of eventually producing 2 million barrels a day.21 Potential Indian and Chinese investors in the project approached by Rosneft asked for similar incentives as a precondition for their participation, but reportedly have yet to agree terms.22

In 2020, the government approved an incentive program worth over $300 billion for Arctic infrastructure, industrial, liquefied natural gas (LNG), and oil and gas extraction projects.23 Other than oil and gas extraction, the petrochemical, mining, and timber industries will receive incentives to attract domestic and foreign investors.24 These incentives are intended to stimulate economic activity and the construction of towns, power plants, ports, and airports, as well as to stem the outmigration of population from the region.25

The Northern Fleet is Russias main military instrument in the Arctic. It is used to secure the SSBN force and Arctic borders; to assert great-power status; to support territorial and resource claims, economic interests, and infrastructure; and to counter and deter the buildup of military forces by NATO members and partners, and neutral countries, that the Kremlin considers threatening to Russian interests in the region.26

The importance attached to the Northern Fleet is reflected in organizational changes that have elevated its status. In 2014, Russia created an Arctic joint strategic command for the primary purpose of providing enhanced protection to existing and planned military installations along the NSR. As a critical component of this reorganization, a new Arctic brigade was created. In January, the Northern Fleet was formally designated as Russias fifth Military Districtthe first time that a fleet has been given equal stature with one of the land Military Districts.27

These important changes are the manifestation of the Kremlins 2017 announcement that the capabilities of the Northern Fleet were being upgraded to phase NATO out of the Arctic.28 The fleets capabilities are being modernized with the introduction of more capable naval surface combatants, missile and artillery units; four new brigade combat teams; a motorized infantry brigade; and more sophisticated air defense systems, anti-ship cruise missiles, and command, control, communications, computers, intelligence, surveillance, and reconnaissance systems.29 In addition, facilities are being constructed or upgraded to provide increased logistical support for these assets and a planned fleet of over fifty icebreakers.30

Based on the current pace and scope of this force modernization program, Russia does not appear to be on a trajectory to establish naval superiority in the region or a true blue-water navy. Most of its capabilities are not designed for offensive power projection but rather for close-in perimeter defense and protection of borders. Much of the growth in infrastructure is intended to conduct nonmilitary missions such as search and rescue operations or to protect maritime shipping and energy and economic investments.

However, many of Russias military capabilities and operations in the Arctic have inherent offensive potential and have been used in threatening ways.31 Its air and naval forces have intimidated NATO countries on the northern and eastern flanks of the alliance with provocative maneuvers; have increased naval, submarine, and air patrols near Danish and Norwegian territories; have conducted snap military drills in the region; and have used more aggressive tactics to harass U.S. naval and air operations off the coast of Alaska.32 Moreover, many Russian facilities being developed along the NSR are dual-use, and Russian measures to improve maritime security and safety, such as improved radar surveillance and communications or new drone bases, have inherent offensive potential.33

Russias primary operational focus is defense of the territory and seas surrounding the Kola Peninsula and denial of access to this region by U.S./NATO forces. But implementing an extended defense-in-depth for its SSBNs requires deployments through the Greenland-Iceland-UK gap, which would pose an increased threat to NATOs sea lines of communication and carrier battle groups.34 Perhaps most importantly, Russias intentions could change if U.S./NATO actionsfor example, the deployment of more advanced missile defense or ASW assets in or near the regionheighten its threat perceptions. Should this occur, Moscow will have additional incentives to shift from a defense-oriented strategy to a more offense-minded posture built on greater force-projection capabilities.

The Kremlin has launched an information campaign to highlight its accomplishments in the Arctic and promote its ambitions there. In 2007, an expedition planted Russias flag on the seabed at the North Pole as a symbol of its Arctic claims.35 Senior officials periodically hold high-profile photo opportunities in the region as they inspect military, energy, and scientific facilities.36 Senior officials and companies host high-profile international gatherings on the Arctic.37 One such event was held in 2016 on a Russian nuclear-powered icebreaker.38 Major companiesincluding Rosneft, Norilsk Nickel, and Gazpromhave co-sponsored the Arctic Territorial Dialogue/International Arctic Forum, which has convened periodically in St. Petersburg since 2010 and which Putin attends.39

The Arctic has ample supplies of oil and gas, making it a strategic region not only for the Russian economy but also the commercial interests of key Kremlin powerbrokers who are close associates and members of Putins inner circle.40 The Arctic economic interests of the state and of the ruling elites are intertwined.

The energy industry is the largest economic stakeholder in the Arctic. Energy companies, lacking capital and know-how to tap the regions offshore resources, have turned to foreign partners. In 2011, the state oil company Rosneftcontrolled by long-time Putin associate Igor Sechinpartnered with ExxonMobil, which has ample experience from developing Canadas Arctic resources, to exploit those in the Kara Sea.41 The two companies agreed to invest $3.2 billion to share the risks and technologies to develop offshore reserves, and drilling started a year later.42 However, ExxonMobil was forced to abandon the project in 2014 when U.S. sanctions prohibited Western companies from working on Russian Arctic offshore oil projects. Rosneft resumed the project on its own in 2020 with Kremlin support.43

Novatek, Russias largest independent gas producer, in which another close Putin associate Gennady Timchenko is a major shareholder, has the controlling interest in the Yamal LNG plant. This is the countrys major high-profile project in the Arctic and an example of Russian-Chinese commercial cooperation there.44 After sanctions on Novatek limited Western financing and technology transfers to the project, the China National Petroleum Corporation and a Chinese state investment fund stepped in to fill the gap. Chinese entities now have roughly a 30 percent stake in the project while Frances Total owns a 20 percent stake in the plant.45 Novatek is building one more plant there with financing from China and is planning another in the Russian Far North.46

In 2018, Rosatom, the state nuclear power entity was designated as the manager of shipping along the NSR and given a key role in developing offshore Arctic infrastructure.47 In addition, it has been charged with building and overseeing the nuclear icebreaker fleet, managing emergency response in the Russian Arctic, and developing communication and navigation infrastructure along the route.48 Rosatoms growing role in the Arctic has enhanced its political clout, increased its financing from the state budget, and spurred its diversification into transportation and logistics sectors.49

Finally, the defense and security sector and its leaders are among the key stakeholders in the Arctic. Security Council Secretary Nikolai Patrushev, a close Putin associate and former director of the Federal Security Service (FSB), is an outspoken advocate of expanding Russias presence in the Arctic and showcasing its exploits there to a global audience. In 2020, the Security Council established a special commission to promote Russian interests in the region.50 Former president Dmitri Medvedev chairs the commission, whose membership includes the ministers of defense and foreign affairs, senior representatives from the executive and legislative branches, and regional officials.51 Defense Minister Sergei Shoigu has long been an outspoken advocate of expanding Russias militarys presence in the Arctic as a hedge against threats to its interests from hostile neighbors.52

Notwithstanding the ambitious plans of Russias government and corporations to attract foreign investors to realize their designs on Arctic riches, the prospects for success are far from certain. Oil and gas, which have been given the central role in those plans, are found in large quantities in other, more accessible and hospitable regions where they can be extracted and delivered to customers more economically. Russias track record of fulfilling ambitious programs, even those that are sponsored by Putin personally, is far from encouraging.53 Major corporations with close ties to the Kremlin, such as Rosatom or Rosneft, can extract significant subsidies from the government, but many projects lacking high-level political patronage remain unfunded and unrealized.54 Even in the Arctic, which enjoys a great deal of high-level attention and should be getting priority in resource allocations, major undertakings remain unfunded or underfunded.55

Several factors that are outside the control of the government further cloud the outlook for its Arctic plans. The impact of the COVID-19 pandemic on the global economy has depressed demand for oil and gas.56 Europethe critical destination for Russian gashas suffered a heavy blow to its economy and adopted ambitious plans for cutting greenhouse-gas emissions and reducing its carbon footprint. And, even without these factors, the European energy marketplace has become much more competitive for Russian producers as a result of major EU energy sector reforms.57

Russias ambition to expand its LNG exports to Asian markets, China in particular, also faces uncertain prospects. The combination of the high cost of LNG gas, the length and challenging conditions of the NSR, the risk of more U.S. sanctions, and the hard and unyielding position of Chinese negotiators are all significant challenges to overcome to turn this ambition into reality.58

The sheer size, emptiness, and conditions of Russias Arctic regions pose a daunting challenge to the goal of developing infrastructure, new settlements, and economic activity there. Built mostly with slave labor during the Stalin era, towns there suffer from high poverty and unemployment.59 The best and brightest are leaving.60 Keeping them there is likely to take more than just somewhat higher pay than what they can earn elsewhere. Furthermore, climate change and melting permafrost are having deleterious impacts on the ability to live and work in the region. Both have led to the loss or degradation of existing infrastructure, roads, and buildings, as well as a spate of industrial and transportation accidents.61

The NSR also faces an uncertain future as a major transportation link between Europe and Asia envisioned by Russian Arctic enthusiasts. Insurance for maritime operations in polar waters is expensive, as is ice-breaking support. In 2020, 331 ships traveled along a portion of the NSR, but only 62 made the entire voyage, carrying just 26 million tonsfar below Moscows stated goal of shipping 80 million tons by 2024.62

Even Russias military posture in the Arctic faces an uncertain future. The mission of defending the northern border and the military and economic infrastructure in the region, as well as securing the SSBNs sanctuary, cannot be taken for granted in a hypothetical conflict with NATO. Plans for military modernization and new infrastructure are likely to contend with the same resource constraints and difficult operating conditions as the rest of Russias Arctic ambitions.63 At best, this will mean delays in their completion; at worst, they may prove too costly for the defense budget to sustain, especially if the oil and gas bonanza does not materialize.

Russia has already had to shelve its plan for creating a second Arctic Brigade for improved coastal defense.64 Moreover, the Northern Fleet faces major shortfalls in icebreakers and ice-capable ships, troop transport, aerial refueling, and ASW patrol aircraft.65 The fleets ability to conduct a broader range of missions and operations beyond bastion defense of its SSBNs will be severely hampered unless major investments are made to redress these shortfalls.

Russias ability to prevail in an Arctic conflict with NATO is an open question. The Baltic states are cut off from the rest of the alliance and, in a crisis, reinforcing them or deploying troops on their territory would be extremely challenging, involving a major operation that would be highly vulnerable to Russian interdiction. Moreover, their small size and proximity to major Russian military installations and garrisons would present Russia with undisputed advantages as would its superiority over NATO in icebreakers, ice-capable ships, local infrastructure, and cold-weather technologies and training.66

On the other hand, the geography of the Baltic region presents Russia with major vulnerabilities.67 The proximity of major Russian military installations to the Baltic states would leave them vulnerable to NATOs longer-range precision weapons launched from air- and sea-based platforms. The Russian Navys ability to escape the confines of the Gulf of Finland in the event of hostilities would be in doubt.68 The heavily militarized Kaliningrad enclave, cut off from the rest of Russian territory, would also be vulnerable to NATO strikes.

Russias aggressive posturing in the Arctic and the Baltic regions has provoked NATO moves that in a crisis situation could backfire against it and severely threaten its security and interests. In February, the United States deployed an expeditionary B1-Lancer squadron with 200 personnel on a temporary basis to Norway.69 Last September, the U.S., British, and Norwegian navies conducted joint exercises just over 100 miles from the Russian coastline.70 And last March, Norwegian, British, U.S., and several other NATO units, as well as units from Sweden and Finland, conducted exercises simulating a high-intensity combat scenario in northern Norway.71

Mutual accusations and warnings by NATO and Russia about the threat they pose to each other risk becoming a self-fulfilling prophecy. The situation is similar to the classic security dilemma, in which states take steps to increase their security, prompting other states to respond with their own security measures, thereby decreasing security for the first state.72 This is risky. The commitment of NATO members to each other and Russias vision of its security requirements, which emphasizes strategic depth and buffers to shield it from perceived threats to the homeland, meet toe-to-toe along the alliances northern flank.

An outright military conflict in the Arctic would not be confined to the region and would prove catastrophic for both sides. All the Arctic stakeholders have an obvious interest in avoiding such an outcome, as the result of either a deliberate or an unintended escalation. The latter is the more likely scenario and this risk is likely to increase as the opposing forces continue to operate in close proximity to each other.

However, neither side has shown willingness to back down. For NATO it is a matter of maintaining the credibility of its commitment to mutual defense; for Russia, its main adversary has advanced to the gates of the homeland and is intent on denying the security, geopolitical, and economic claims to which it feels entitled. The rising tensions are not the result of mutual misunderstandingsboth sides actions are deliberate and reflect clashing interests.

It can be difficult to see past Russias rhetoric, deliberately provocative acts, and grandiose statements about its Arctic plans and threats to them, and to acknowledge that its bark so far has been worse than its bite. Russias ambitions far exceed the resources it has to realize them. Thus, while it is essential not to yield to Russias posturing, it is equally important not to overreact to it.

Notwithstanding the seeming novelty of the situationchanging climate, NATOs new frontier in Eastern Europe, Chinas growing footprint in the Arctic, and so onRussias drive to the Far North and the rationale behind it are part of a long-standing historical pattern. Its confrontation with the West is not a new development either, and the push for Arctic resources is crucial for its ability to sustain this posture. From the perspective of the countrys security establishment, Russia is playing defense rather than offense.

Moreover, Russia is confronting the West in vastly diminished circumstances. Its economy is stagnant, its population is declining, and it is diplomatically isolated in Europe and among the Arctic statesalmost entirely thanks to its own actions. It has rebuilt its military capabilities after a long period of neglect and decline, but even this utmost national priority is facing budget constraints and technological challenges. In the years to come Russias Arctic pursuits and posture will likely be driven by concerns about being able to sustain its already weakened position vis--vis the West.

Rather than treat the Arctic as the next arena of great-power competition with Russia, the United States and NATOs other Arctic members should adopt a two-track strategy of diplomacy and deterrence.

Although Russia may not prove receptive, the United States and NATO should explore multilateral arrangements to reduce tensions, avoid or manage crises, and mitigate the risks of conflict through an accident or miscalculation.

Currently, there is no venue for dialogue on security issues in the Arctic. One could be proposed to fill this gapcomprised initially of Russia, the United States, Canada, Denmark, and Norwaywith a mandate to focus on crisis management, risk reduction, and conflict prevention, even if Russias continued unwillingness to engage seriously on these issues raise questions about its near-term viability.

The United States and NATO should implement defensive improvements to discourage Russia from harassing their military and commercial aircraft and ships in and around the Arctic, and to ensure that the alliance maintains the capability to execute its wartime reinforcement plans for its northern and eastern flanks. 73

The alliance should continue with its current posture of restraint and resolve to signal to Russia that it does not intend to engage in offensive operations, but fully prepared to defend its interests. Striking this balance will be difficult and will require clarity in communication to Russia the allies interests, objectives, and redlines.

In responding to Russias ambitions in the Arctic, it is important for the United States and NATO to base their plans on a realistic assessment of its posture there, its drivers, and its capabilities. Tempting as it may be to view the Arctic through the prism of great-power competitionwhich undoubtedly would fit with Russias quest for recognition as a great powerthere is little to suggest that its military posture in the Arctic is a fundamentally new undertaking. Rather, it signals the return to a version of its Cold Warera posture centered around long-standing missions of protecting the sanctuaries of its ballistic missile submarine fleet and operations in the North Atlantic in the event of a war in Europe. The Russian military is resuming these missions with fewer resources and facing a more formidable array of adversary capabilities than during the Cold War.

Some hedging against a greater-than-anticipated Russian threat should be one element of the United States and NATOs overall approach to the Arctic Region. But pursuing the goal of winning a great-power competition with Russia in this region is likely to be a distraction from other, more important U.S. pursuits. The alliance should act with prudence, realism, and restraint in protecting its core interests in the Arctic and carefully manage competition with Russia to avoid destabilizing consequences.

Even though their tense standoff is likely to continue, some cooperation between Russia and other Arctic nations, in practical areas that are largely depoliticized, is probably possible. These include climate change, search and rescue operations, and scientific research. Other opportunities for cooperation should be explored on issues of common concern, such as the safety of maritime shipping, environmental remediation, protection of fisheries, and incident management. In addition, it is essential for NATO allies to find potential diplomatic avenues for managing the standoffthat is, rules of the road to mitigate the risks of crises or incidents with the potential for escalation.74 No matter how unpromising they may seem, they should be explored. The allies have been here before.

The authors are grateful to Grace Kier, Amy Mellon, Tatyana Pyak, and Anna Switzer for their superb assistance in preparing this paper.

The Carnegie Endowment for International Peace is a unique global network of policy research centers in Russia, China, Europe, the Middle East, India, and the United States. Our mission, dating back more than a century, is to advance peace through analysis and development of fresh policy ideas and direct engagement and collaboration with decisionmakers in government, business, and civil society. Working together, our centers bring the inestimable benefit of multiple national viewpoints to bilateral, regional, and global issues.

The Russia Strategic Initiative (RSI) is a U.S. Department of Defense organization that works with structures throughout the U.S. Government and with public and private think tanks around the world to develop a common understanding of Russian decision-making and way of war that supports the Coordinating Authoritys integration that leads to integrated planning, assessments, and action recommendations.

1 Mathieu Boulgue, Russias Military Posture in the Arctic: Managing Hard Power in a Low Tension Environment, Chatham House, June 28, 2019, https://www.chathamhouse.org/2019/06/russias-military-posture-arctic.

2 Pavel Devyatkin, Russias Arctic Strategy: Military and Security (Part II), Arctic Institute, February 13, 2018, https://www.thearcticinstitute.org/russias-arctic-military-and-security-part-two/.

3 Angela Stent, Restoration and Revolution in Putins Foreign Policy, Europe-Asia Studies 60, no. 6 (August 2008): 10891106; Byt li Rossii energeticheskoy sverkhderzhavoy? [Will Russia be an energy superpower?], Izvestia, January 17, 2006, https://iz.ru/447741/byt-li-rossii-energeticheskoi-sverkhderzhavoi.

4 Pavel Devyatkin, Russias Arctic Strategy: Maritime Shipping (Part IV), Arctic Institute, February 27, 2018, https://www.thearcticinstitute.org/russias-arctic-strategy-maritime-shipping-part-iv/; Guy Chazan, Putin Uses Asia in Power Play on EU, Wall Street Journal, April 27, 2006, https://www.wsj.com/articles/SB114607528829736665.

5 For more on this, see other recent Carnegie papers: https://carnegieendowment.org/2020/09/08/etched-in-stone-russian-strategic-culture-and-future-of-transatlantic-security-pub-82657; https://carnegieendowment.org/2019/02/20/russia-s-global-ambitions-in-perspective-pub-78067; and https://carnegieendowment.org/2019/06/05/primakov-not-gerasimov-doctrine-in-action-pub-79254.

6 Keir Giles, Assessing Russias Reorganized and Rearmed Military, Carnegie Endowment for International Peace, May 3, 2017, https://carnegieendowment.org/2017/05/03/assessing-russia-s-reorganized-and-rearmed-military-pub-69853.

7 Rossiya perenapravit potoki gaza na Vostok pri problemakh na Zapade [Russia will redirect gas flows to the East in case of problems in the West], Interfax, September 2, 2016, https://www.interfax.ru/russia/526358.

8 The Military Balance lists ten active SSBNs in the Russian Navysix in the Northern Fleet and four in the Pacific Fleet. The eleven SSBNs referenced here reflects the four in the Pacific Fleet and the six active and one in reserve in the Northern Fleet. International Institute for Strategic Studies, Chapter Five: Russia and Eurasia, The Military Balance 120, no. 1 (2016): 166219.

9 Rebecca Hersman, Eric Brewer, and Maxwell Simon, Deep Dive Debrief: Strategic Stability and Competition in the Arctic, Center for Strategic & International Studies, January 6, 2021, https://www.csis.org/analysis/deep-dive-debrief-strategic-stability-and-competition-arctic.

10 Christopher Woody, Russian and NATO militaries are getting more active in the Arctic, but neither is sure about what the other is doing, Business Insider, July 21, 2020, https://www.businessinsider.com/russia-nato-increasing-military-activity-in-the-arctic-2020-7; NATO Is Facing Up to Russia in the Arctic Circle, Economist, May 16, 2020, https://www.economist.com/europe/2020/05/14/nato-is-facing-up-to-russia-in-the-arctic-circle.

11 Andrew Higgins and Sergey Ponomarev, The Lure of a Better Life, Amid Cold and Darkness, New York Times, December 3, 2017, https://www.nytimes.com/interactive/2017/12/03/world/europe/norilsk-arctic.html; Duncan Depledge, Russia and the Arctic: Crunch Call on Moscows Territory Claim Is Fast Approaching, The Conversation, March 17, 2015, https://theconversation.com/russia-and-the-arctic-crunch-call-on-moscows-territory-claim-is-fast-approaching-38625.

12 Ivan Stupachenko, Can Russias Arctic Deliver on Big Fishing Promises?, SeafoodSource, April 4, 2018, https://www.seafoodsource.com/features/can-russias-arctic-deliver-on-big-fishing-promises.

13 Ob osnovakh gosudarstvennoy politiki Rossiyskoy Federatsii v Arktike na period do 2035 goda [On the foundations of the state policy of the Russian Federation in the Arctic for the period up to 2035], President of the Russian Federation, March 5, 2020, http://static.kremlin.ru/media/events/files/ru/f8ZpjhpAaQ0WB1zjywN04OgKiI1mAvaM.pdf.

14 Timo Koivurova, Juha Kapyla, and Harri Mikkola, Continental Shelf Claims in the Arctic: Will Legal Procedure Survive the Growing Uncertainty?, Finnish Institute of International Affairs, August 2015, https://www.fiia.fi/en/publication/continental-shelf-claims-in-the-arctic.

15 Andrew E. Kramer, Russia Presents Revised Claim of Arctic Territory to the United Nations, New York Times, February 9, 2016, https://www.nytimes.com/2016/02/10/world/europe/russia-to-present-revised-claim-of-arctic-territory-to-the-united-nations.html.

16 Arctic Council, Arctic Council, https://arctic-council.org/en/.

17 Declaration on the Establishment of the Arctic Council, Arctic Council, September 19, 1996, https://oaarchive.arctic-council.org/bitstream/handle/11374/85/EDOCS-1752-v2-ACMMCA00_Ottawa_1996_Founding_Declaration.PDF?sequence=5&isAllowed=y.

18 Experts Speak About the Upcoming Program of Russias Arctic Council Chairmanship, The Arctic, November 25, 2020, https://arctic.ru/international/20201125/988468.html.

19 Andreas Kuersten, The Arctic Five Versus the Arctic Council, Arctic Yearbook, 2016, https://arcticyearbook.com/arctic-yearbook/2016/2016-briefing-notes/205-the-arctic-five-versus-the-arctic-council.

20 John Last, What Russias $300B Investment in Arctic Oil and Gas Means for Canada, CBC, February 15, 2020, https://www.cbc.ca/news/canada/north/russian-arctic-oil-and-gas-explained-1.5462754.

21 Russia Grants Trillion-Ruble Tax Cut for Arctic Oil and Gas Production, Moscow Times, October 25, 2019, https://www.themoscowtimes.com/2019/10/25/tax-arctic-oil-gas-production-a67903.

Originally posted here:

Russia in the ArcticA Critical Examination - Carnegie Endowment for International Peace

LONDON: With climate change and resource scarcity looming, the global green technology sector is leading the charge to create a cleaner energy future.

Green technology (greentech) is a broad term for innovative companies that are working towards carbon-neutral solutions for a sustainable planet.

In tandem with its historically hydrocarbon-powered economy, the UAE is now a pioneer in energy diversification, launching some of the worlds most innovative solar, wind and waste-to-energy projects.

Home to a growing population and rising energy demand, the UAE is leveraging its abundant renewable resources and global technology partners to dramatically reduce its carbon footprint. Chief among its collaborators is the UK, which has a long history of greentech expertise and implementation.

According to Sarah Heineman, head of renewable energy at the UK Department for International Trade, there is vast potential for investment and cross-collaboration between the UK and UAE within the greentech industry.

The British energy sector has one of the most advanced energy systems in the world. It is at the forefront of the transition to decarbonize power generation and has attracted significant private investment into innovation, she said.

Over the last five years, relative power emissions in the UK have fallen faster than in any other G10 nation, Heineman noted, adding that Britain was the first major economy to pass laws for net zero carbon emissions.

Ambitious UAE energy vision

The UAE has shown foresight in the greentech space by laying out its ambitious Energy Strategy 2050. According to the International Renewable Energy Agency, green energy has advanced rapidly in the GCC countries since 2014.

The Gulf project pipeline reached almost seven gigawatts of new power generation capacity by 2018, after record-breaking bids in renewable energy auctions in the UAE and Saudi Arabia made solar power cost-competitive with conventional energy technologies.

As well as being home to the worlds largest single-site solar park, Dubai is pioneering waste-to-energy innovation with the Al-Warsan project which has the capacity to process 1.9 million tons of municipal solid waste per year and power around 135,000 homes.

The UAEs transition to cleaner energy is helping Britain make the shift to net zero in the UK too. Abu Dhabi-owned energy firm Masdar is leading investment, research and development, and commercialization of renewables in the UAE, and has made multi-billion pound investments in three offshore wind farms in the UK. It has also invested millions in Britains electric vehicle charging infrastructure.

Clean energy innovation

A 2018 UN report revealed that global investment in renewable energy and green technology processes surpassed $200 billion in 2017; $2.9 trillion has been invested in sources like solar and wind power since 2004.

In the UK, academia and research centres work closely with greentech companies to develop and commercialise innovative technologies to meet global demand. As the government continues to invest in the sector, Britain has inked hundreds of patents for leading environmental solutions.

The UK with its strong pedigree in renewables is well-placed to help the UAE power ahead with its innovative energy vision and achieve its ambitious targets, said Patrick Moody, British Ambassador to the UAE.

UK greentech startups

British startups have already made significant inroads in helping to shape the UAEs greentech sector. Northern Ireland-based Kiverco has been chosen to design and build the solution that will recycle all waste from Expo 2020 Dubai a global event staged over six months that will see 25 million visits.

Kiverco installed the plant in early 2020, which will divert the highest percentage of landfill waste than any previous Expo. The recycling solutions will recover ferrous metals, non-ferrous metals, plastic bottles, plastic film, paper and cardboard. Organic waste from the sprawling Expo 2020 Dubai South site will be converted into fertilizer, and construction material will be reused in roads.

Global sales manager at Kiverco, Con Gallagher, said: The UAE is leading the charge when it comes to sustainable policies. Kiverco now has five active plants in the Gulf region. We are seeing more and more interest as governments turn their focus to mass-recycling strategies.

UK-based Solar Water Plc, the worlds first carbon-neutral hydro-infrastructure dome, designed to produce clean water for municipal and industrial consumption, is in talks with the UAE government to implement its innovative glass technology.

The dome houses vast parabolic mirrors that capture the suns heat; this energy evaporates incoming seawater, which condenses and precipitates as fresh water, creating a constant water cycle within the dome. Salt is extracted from the brine as a by-product and sold commercially, ensuring that neither salt nor brine is returned to the ocean.

In the last nine months, even amid the coronavirus pandemic, we have created a pipeline of projects in the Middle East, said David Reavley, CEO of Solar Water. I think there will be enormous demand over the next two or three decades. We are solving a big problem as the world progresses into climate change vulnerability.

Patrick Moody, British Ambassador to the UAE, concluded: The UKs thriving renewable energy sector has the expertise and practical know-how to harness the UAEs abundant renewable resources and futuristic sustainability vision. I see great potential for collaboration between the UK and the UAE.

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Yemen's government: Houthis are working with Al-Qaeda and Daesh - Arab News

PHOENIX, March 29, 2021 /PRNewswire/ --Universal Technical Institute (NYSE: UTI), the nation's leading provider of trained technicians to the transportation industry, has entered into a definitive agreement to acquire MIAT College of Technology from HCP & Company, its owner since August 2014. Terms of the transaction have been disclosed in UTI's Form 8-K and completion of the acquisition will occur pending customary closing conditions and regulatory approvals. The Boards of Directors of both companies have unanimously approved the agreement.

Like UTI, MIAT is focused on serving students seeking fast-tracked, high-value education that leads to rewarding jobs and careers and to helping employers meet their demand for talent trained with the high-tech and evolving skills required in today's workforce.

MIAT was founded in 1969 and currently serves approximately 1,200 students through its campuses in Canton, MI and Houston, TX. The company offers vocational and technical certificates as well as associates degrees in fields with robust and growing demand for skilled technical workers, including aviation maintenance, energy technology, wind power, robotics and automation, non-destructive testing, HVACR, and welding. MIAT's preliminary revenue and adjusted EBITDA for calendar 2020 were approximately $25 million and $3.5 million, respectively, with year-over-year revenue growth in excess of 20% in both 2020 and 2019. MIAT is accredited by the Accrediting Commission of Career Schools and Colleges.

The acquisition will enable UTI to further expand its program offerings into growing industry sectors and rapidly expanding fields likely to be bolstered by technological innovation and the country's focus on sustainable energy. Additionally, this will allow UTI to offer MIAT programs at UTI campuses and extend UTI's presence and programs into the Detroit, MI market where MIAT has been for over 50 years.

"We are excited about the upcoming addition of MIAT College of Technology and to advance our strategy to serve more students, particularly in fields where trained technicians are in such strong and increasing demand," said Jerome Grant, chief executive officer of UTI. "Notably, many of MIAT's programs are aligned with expected macroeconomic developments, such as green initiatives and alternate energy, on-shoring of manufacturing and infrastructure investment," he added.

"We believe UTI's existing financial strength, the acquisition of MIAT and the program expansion and diversification synergies it will enable, along with our previously announced planned new campus investments, will position UTI for solid double-digit revenue growth and continued margin expansion over the next several years," Grant said.

UTI has posted an updated presentation regarding its growth and diversification strategy on its investor relations website at https://investor.uti.edu/image/Growth_Diversification_Strategy_Update.pdf.

Barrington Research Associates was the exclusive financial advisor to UTI in this transaction.

Non-GAAP Measures

For internal reporting purposes, MIAT defines adjusted EBITDA as operating income adjusted for certain items that were originally classified within other income/expense, which is then further adjusted for items not considered part of the company's normal recurring operations. Adjusted EBITDA is a non-GAAP financial measure which is provided to supplement, but not substitute for, the most directly comparable GAAP measure. We choose to disclose this non-GAAP financial measure for MIAT because it provides an additional performance measure. Since the items excluded from this measure are significant components in understanding and assessing financial performance under GAAP, this measure should not be considered to be an alternative to net income (loss) or any other measures derived in accordance with GAAP as a measure of operating performance or profitability.

About Universal Technical Institute, Inc.

With more than 220,000 graduates in its 55-year history, Universal Technical Institute, Inc. (NYSE: UTI) is the nation's leading provider of technical training for automotive, diesel, collision repair, motorcycle and marine technicians, and offers welding technology and computer numerical control (CNC) machining programs. The company has built partnerships with industry leaders, outfits its state-of-the-industry facilities with current technology, and delivers training that is aligned with employer needs. Through its network of 12 campuses nationwide, UTI offers post-secondary programs under the banner of several well-known brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI) and NASCAR Technical Institute (NASCAR Tech). The company is headquartered in Phoenix, Arizona.

For more information, visit http://www.uti.edu.Like UTI on http://www.facebook.com/UTIor follow UTI on Twitter @UTITweet, @MMITweet, and @NASCARTechUTI.

About MIAT College of Technology

For more than 50 years, MIAT College of Technology ("MIAT") has graduated highly skilled workers across diversified industrial end-markets and is known as a leader and innovator in post-secondary education technical skills training. As a Commission of Career Schools and Colleges (ACCSC) accredited College, MIAT awards diploma, certificate, and associate degrees at its campuses in Canton, Michigan and Houston, Texas which total over 180,000 square feet of training space. Programs offered include aviation maintenance, robotics and automation, HVACR, energy technology, wind power, and welding. Both campuses provide admissions guidance, career services, financial services, learning resource center support assistance, and are approved for Federal Military and Veterans Education Benefits (VA). MIAT also offers customized industry-specific training for strategic employment partners locally and nationally, which include the U.S. Army, U.S. Air Force, Siemens, Marathon Oil, DTE, Spirit, and Delta Tech Ops.

For more information, please visit http://www.miat.eduor on Facebook at https://www.facebook.com/MIATConnection.

Forward Looking Statements

All statements contained in this press release, other than statements of historical fact, are "forward-looking" statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These forward-looking statements which address UTI's expected future business and financial performance, may contain words such as "goal," "target," "future," "estimate," "expect," "anticipate," "intend," "plan," "believe," "seek," "project," "may," "should," "will," the negative form of these expressions or similar expressions. Examples of forward-looking statements include, among others, statements regarding (1) UTI's belief that it is taking steps to address costs, efficiencies and working capital management; (2) UTI's ability to maintain open campuses during the global pandemic and complete curriculum with in-person labs; (3) UTI's belief that it is taking steps to drive its next phase of organic and inorganic growth; (4) UTI's expectation that inorganic growth will achieve anticipated metrics; (5) UTI's focus on offering a blended curriculum to provide students training for job skills that are in high demand; (6) UTI's expectation for year-over-year annual growth; (7) UTI's expectation for normal seasonality; (8) UTI's focus on continuing to fuel long-term growth and investing in opening more welding programs that will drive incremental growth over the next two fiscal years; (9) substantial and growing interest in UTI and (10) UTI's expectations for new student start growth, average student population growth, revenue, operating expenses, operating income (loss), adjusted operating income (loss), net income, adjusted EBITDA, operating cash flow, adjusted free cash flow, and capital expenditures for fiscal 2021. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on UTI's current beliefs, expectations and assumptions regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of UTI's control. UTI's actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could affect UTI's actual results include, among other things, impacts related to the COVID-19 pandemic, changes to federal and state educational funding, changes to regulations or agency interpretation of such regulations affecting the for-profit education industry, possible failure or inability to obtain regulatory consents and certifications for new or modified campuses or instruction, potential increased competition, changes in demand for the programs UTI offers, increased investment in management and capital resources, the effectiveness of UTI student recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic and political conditions, the adoption of new accounting standards, and other risks that are described from time to time in UTI's public filings. Further information on these and other potential factors that could affect the financial results or condition may be found in the company's filings with the SEC. Any forward-looking statements made by UTI in this press release are based only on information currently available to UTI and speak only as of the date on which it is made. UTI expressly disclaims any obligation to publicly update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, changes in expectations, any changes in events, conditions or circumstances, or otherwise.

Contacts

Company Contact: Troy Anderson Chief Financial Officer Universal Technical Institute, Inc. (623) 445-9365 [emailprotected]

Investor Relations Contact: Robert Winters or Wyatt Turk Alpha IR Group (312) 445-2870 [emailprotected]

Media Contact: Jody Kent Vice President, Communications and Public Affairs Universal Technical Institute (623) 445-0872 [emailprotected]

SOURCE Universal Technical Institute, Inc.

http://www.uti.edu

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Universal Technical Institute to Acquire MIAT College of Technology - PRNewswire

TIDMORSTED 'SeaH2Land' is an ambitious vision, linking GW-scale electrolysis to the large industrial demand in the Dutch-Flemish North Sea Port cluster through an envisaged regional cross-border pipeline. The green electricity required to produce the renewable hydrogen is proposed to come from the build-out of additional large-scale offshore wind. The major industrial companies in the region ArcelorMittal, Yara, Dow Benelux, and Zeeland Refinery, support the development of the required regional infrastructure to enable sustainably-produced steel, ammonia, ethylene, and fuels in the future, helping the Netherlands and Belgium to accelerate their carbon reductions towards 2030 and beyond. GW-scale electrolysis and large industrial demand The SeaH2Land vision includes a renewable hydrogen production facility of 1 GW by 2030 to be developed by rsted. If realised, the electrolyser, which will produce the renewable hydrogen, can convert about 20 % of the current hydrogen consumption in the region to renewable hydrogen. With 580,000 tonnes per year, the North Sea Port cluster is one of the largest production and demand centres of fossil hydrogen in Europe today. Driven by decarbonisation efforts, industrial demand in the cluster could grow to about 1,000,000 tonnes by 2050, equivalent to roughly 10 GW of electrolysis. GW electrolyser directly linked to new 2 GW offshore wind farm rsted proposes to connect the GW electrolyser directly to a new 2 GW offshore wind farm in the Dutch North Sea. This will enable the large-scale supply of renewable electricity required for production of renewable hydrogen and fits well with the ambitions of the Dutch authorities for an accelerated offshore wind roll-out in line with increasing electricity demand. The offshore wind farm could be built in one of the zones in the southern part of the Dutch exclusive economic zone that has already been designated for offshore wind development. Regional infrastructure and hydrogen exchange between big industrial players The industrial players in the region, united in the Smart Delta Resources (SDR) industry partnership, will continue the dialogue with TSOs for them to develop a regional open-access pipeline network of about 45 km, stretching across the North Sea Port area from Vlissingen-Oost (NL) to Gent (BE). The GW electrolyser is proposed to link to the envisaged regional pipeline system connecting large-scale consumption and production in the cluster. Yara, in consortium with rsted, and Zeeland Refinery have each announced plans for mid-size renewable hydrogen production at their sites, while Dow has been exporting hydrogen to Yara since 2018 through the world's first conversion of a gas pipeline into hydrogen. The network can be extended further south to ArcelorMittal as a short-term no-regret and further north, underneath the river Scheldt, to Zeeland Refinery, as a crucial link to create a unique regional ecosystem of hydrogen exchange with significant carbon reduction in the manufacturing processes of ammonia, chemicals, and steel and a significant contribution to the European Green Deal. Moreover, the cluster strategy proposes to extend the 380 kV high-voltage network for the electrification needs of the industry south of the river Scheldt. This would enable GW-sized electrolysis and offshore wind landing zones on both sides of the river, turning the cluster into a true energy hub. Phased build-out of electrolyser capacity Subject to a regulatory framework being in place, the regional network will unlock the first phase of SeaH2Land, which comprises 500 MW of electrolyser capacity. The second phase of SeaH2Land which scales the electrolyser capacity to 1 GW will require the possibility to connect to a national hydrogen backbone, providing additional flexibility and storage. Several locations north and south of the river Scheldt have been identified for GW-scale electrolysis. In the meantime, several projects are being developed in the region on the sites of industrial players, such as Zeeland Refinery's envisaged 150 MW electrolyser, which are also to be connected to the network. Dialogue with regulatory authorities The partnership will now move forward and engage in dialogue with the regulatory authorities on the framework and policies needed to support the development of renewable hydrogen linked to large-scale offshore wind, the regional infrastructure, and conduct a full feasibility study of the project. This ambition fits well with the Hydrogen Delta Programme for the region, developed by Smart Delta Resources -- the association of industrial companies in the region -- and supported by the Provinces of Zeeland and Oost-Vlaanderen. Roles between partners If realised as envisaged, rsted -- the world leader in offshore wind -- will develop the offshore wind farm and electrolyser. North Sea Port -- the port stretching from Zeeland (NL) into Flanders (BE) -- and Smart Delta Resources will take the lead in developing the regional infrastructure in close collaboration with the TSOs, supported by the provinces of Zeeland and Oost-Vlaanderen. The biggest industrial companies in the region, ArcelorMittal -- the world's largest steel producer outside China, Yara -- the world's leading ammonia producer, Dow -- one of the biggest material science companies in the world, and Zeeland Refinery -- owned by leading oil and gas companies and a co-supplier of low-carbon hydrogen to the network - will continue to take part in the hydrogen exchange in the industrial cluster. The industrial demand in the region will provide the offtake of renewable hydrogen when the right framework conditions and economics are in place. Martin Neubert, Chief Commercial Officer and Deputy Group CEO, rsted, says: "The Dutch-Flemish North Sea Port covers one of the largest hydrogen clusters in Europe. As the world looks to decarbonise, it's paramount that we act now to secure the long-term competitiveness of European industry in a green economy. The SeaH2Land project outlines a clear vision and roadmap for large-scale renewable hydrogen linked to new offshore wind capacity. With the right framework in place, the Netherlands and Belgium can leverage the nearly unlimited power of offshore wind to significantly advance renewable hydrogen as a true European industrial success story." Michael Schlaug, Plant Manager, Yara Sluiskil, says: "As one of the largest consumers of hydrogen, Yara welcomes visionary initiatives that can spur the development of a green hydrogen market in the Zeeland region." Manfred Van Vlierberghe, CEO, ArcelorMittal Belgium, says: "ArcelorMittal Belgium maintains its leading role in the field of climate and the environment. We do this by focusing strongly on circularity, gradually replacing raw materials with resources based on waste streams and converting by-products into new raw materials. In addition, we also focus on using hydrogen, both in our existing processes and in novel technologies. Our ambition is to build a hydrogen pipeline between Dow in Terneuzen and ArcelorMittal in Ghent. We also aim to increase the use of green hydrogen, and for this our collaboration with rsted is an important step. Together with our partners in the Smart Delta Region, we will develop an ecosystem with a great complementarity of companies and knowledge centers." Anton van Beek, Chairman of the Board, Dow Benelux, says: "A 380 kV connection to Zeeuws Vlaanderen will be critical to support large-scale direct electrification of Dow's world-scale ethylene plants in Terneuzen." Daan Schalck, CEO, North Sea Port, says: "North Sea Port welcomes the ambition of rsted to further develop the cross-border port as an important hydrogen cluster in Europe together with the big industrial companies in the region." Nathalie De Muynck, General Manager, Zeeland Refinery, says: "Let us create together the critical mass to kickstart the H(2) infrastructure, which is essential for the new H(2) developments in the region." Steven Engels, General Manager Benelux, rsted, says: "SeaH2Land will help the Netherlands to accelerate its offshore wind build-out and to work towards its ambition of 3-4 GW electrolyser capacity by 2030. SeaH2Land offers the Netherlands and Belgium an opportunity to get closer to realising its 2030 climate goals by reducing carbon emissions in the industrial sector. Governments can help this flagship project by putting in place a dedicated support mechanism and renewable hydrogen programme coupled to offshore wind. This should support the necessary industrial scaling to bring down the cost of renewable hydrogen." Contact information rsted Media Relations Netherlands Stefan de Bruijn +31 6 15 18 62 00 xsdeb@orsted.nl rsted Group Media Relations MIchael Korsgaard +45 99 55 94 25 mikon@orsted.dk Attachments -- EN_SeaH2Land_fact sheet https://ml-eu.globenewswire.com/Resource/Download/70a418f8-3fe2-4da8-898d-deb732640814 -- EN_Press Release SeaH2Land https://ml-eu.globenewswire.com/Resource/Download/bf693d0b-1b9b-4113-90c8-59cdab6f764d

(END) Dow Jones Newswires

03-31-21 0215ET

Originally posted here:

195;rsted A/S rsted To Develop One Of The World's Largest Renewable Hydrogen Plants To Be Linked To Industrial Demand In The Netherlands And Belgium -...