Welcome to this week’s On Our Radar, our summary of developments from the past week that will have a significant impact on emerging markets, and, crucially, exactly why they are relevant to foreign investors.
These summaries are taken from excerpts of our Country Insights and Horizon Engage Interactive services – if you would like to receive our full reporting and analysis from our team of regional experts and former ambassadors on any of these developments, please click here for more information.
Country Insights Roundup
Algeria: Leaders Regret Assad’s Fall in Syria
What happened: The fall of the Assad regime in Syria leaves Algeria without a key ally in the region and is also raising nervous chatter about the stability of Algeria’s own government.
Why it matters: Plausible allegations that Algerian intelligence collaborated with the Assad regime to support the Syrian crackdown could also damage Algeria’s international reputation.
What happens next: Algeria’s security apparatus is on high alert, so unrest inspired by Syria is unlikely. However, events there could inspire reflection and shape Algeria’s future political direction.
Angola: Lourenco “Rejuvenates” MPLA to Consolidate Power
What happened: Recent changes to MPLA statutes will allow President Lourenco to consolidate his power within the ruling party.
Why it matters: Lourenco can now remain party leader after his last presidential term ends in 2027, giving him much of a say in picking his successor.
What happens next: We believe the president will use the latest changes to block challengers and weaken the old guard; investors should closely watch new MPLA Vice President Mara Quiosa.
Brazil: Pushing the Green Hydrogen Play
What happened: On 20 December, President Lula’s administration approved 12 green hydrogen and sustainable fuel projects for public sector backing.
Why it matters: These projects qualify for funding from the Climate Investments Fund’s Industry Decarbonization program (CIF-ID), and several have received committed financing from the EU-led Industrial Transition Accelerator (ITA) program.
What happens next: In our view, Brazil’s green hydrogen play will advance in 2025, but the question is whether or not the country’s capital goods manufacturers can keep pace in fabricating components and assembling electrolyzers.
Japan: Hydrogen Subsidy Gate Opens
What happened: METI began accepting bids for its flagship hydrogen subsidy scheme in late November. In July, the ministry hinted it would award the subsidy to at least one applicant by the end of the year. That time has finally arrived.
Why it matters: This announcement is significant because it’s the first time the subsidy details have been hammered out since Japan’s hydrogen strategy was formulated in June 2023. We knew that the government wanted to ramp up hydrogen use throughout the economy six-fold by 2040 and ten-fold by 2050, but it’s only now that the key issue of the “reference price” has been ironed out.
What happens next: The closing date for CfD applications is March 2025, when Japan’s fiscal year ends. METI will prioritize reviewing applications that are submitted before 31 January.
South Africa: Eskom’s Turnaround
What happened: Eskom released its group annual results, showing a massive loss for the fiscal year.
Why it matters: The state-owned power utility’s improved electricity supply has boosted investor confidence in recent months but also encouraged critics who argue against a greater role for IPPs and a shift away from Eskom’s reliance on coal.
What happens next: Eskom’s turnaround will be closely monitored, but market reforms that will see its vertical monopoly unbundled will continue.
Yemen: The Houthi Role After Assad’s Ouster
What happened: The takeover in Syria by Sunni militant group HTS leaves Yemen exposed as one of two remaining Iran-allied Arab capitals.
Why it matters: Riyadh may exploit this to pressure the Houthis into finalizing a Saudi-Houthi deal before the Trump team gets ensconced in power.
What happens next: Saudi reticence to inflame the situation means there will likely be no major anti-Houthi offensive in the foreseeable future.
Stakeholder Influence Tracker
Rising Influence: Angolan Interior Minister Manuel Homem
Interior Minister Manuel Homem scored a victory in his campaign to root out corruption with the arrest of the head of migration acts at the Migration and Foreigners Service. The official was accused of accepting bribes in exchange for enabling illegal migration through the issuance of passports and forged documents.In our view, the arrest highlights Homem’s commitment to delivering on his promise to tackle corruption within the government.
Declining Influence:
Korea Electric Power Corporation CEO Dong-cheol Kim
Korea Electric Power Corporation (KEPCO) CEO Dong-cheol Kim is continuing to lobby the government to raise electricity rates in order to offset KEPCO’s soaring international fuel costs and $139bn debt. The ongoing political turmoil has frozen discussions on price hikes, leaving the fuel cost adjustment rate at $0.34 per 100kWh. In our view, Kim’s failure to secure rate hikes threatens KEPCO’s sustainability and investment appeal. This could damage his reputation and raise questions about his ability to navigate the company through the current political and fiscal hurdles.
Find Out More
These summaries are taken from excerpts of our Country Insights and Horizon Engage Interactive products – if you would like to receive our full reporting and analysis from our team of regional experts and former ambassadors on any of these developments, please click here for more information.
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