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Tuesday, 26 April 2022

Egypt signs green energy agreements

Egypt has signed major agreements with international companies to produce green energy in the Suez Canal Economic Zone (SCZone) in a step that could help turn the zone into a green energy hub. French energy giant EDF Renewables and Emirati energy firms AMEA Power and Masdar have agreed to establish facilities producing green forms of energy including hydrogen and ammonia, the cabinet said in separate statements last week (here, here and here).

#1- EDF Renewables will build a USD 3 bn facility to produce green fuel for ships alongside local firm ZeroWaste and the Sovereign Fund of Egypt (SFE). The Ain Sokhna-based plant will eventually produce 350k tons of fuel each year but will have a 140k-ton production capacity in the initial phase. Construction of the plant will begin in 2024, with operations slated to begin in 2026.

#2- AlNowais’ AMEA Power will partner with the SFE and other government agencies to establish a facility to produce green ammonia. The plant make 235k tons of ammonia a year during the initial phase, with production set to increase to 390k tons at a later date. Construction will begin by the end of this year, with the project set to come online by the end of 2025.

#3- A consortium of Emirati renewable energy company Masdar and Hassan Allam Utilities will establish green hydrogen plants that can produce up to 480k tons of green hydrogen a year. The first facility will produce 100k tons of e-methanol annually to use as green fuel for ships, the cabinet quoted Hassan Allam Holding CEO Amr Allam as saying. The plant is set to become operational by 2026. The consortium also plans to expand electrolyser facilities to up to 4 GW by 2030 to produce 2.3 mn tonnes of green ammonia to export as well as supply green hydrogen to domestic industries, he added.

Who owns what: The cabinet didn’t provide a breakdown on the ownership of the plants but SFE head Ayman Soliman told Bloomberg Asharq last week that the fund will own 15-20% of each.

Green energy projects in the SCZone have been all the rage lately: Earlier this month, the SFE, Norway’s Scatec, Nassef Sawiris-backed ammonia producer Fertiglobe and Orascom Construction signed an agreement to build and operate a planned 100 MW green hydrogen plant in Ain Sokhna. The project is set to come online by 2024, making it Egypt’s first operational green hydrogen plant. This came only a few weeks after Scatec announced plans to build a 1 mn ton-per-year green ammonia plant in the zone.

BACKGROUND: Egypt is pushing a strategy to channel bns of USD of investment to create a local green energy industry amid a rising international interest in energy sources such as green hydrogen. Cairo’s plans have attracted major global players seeking investments in the sector in the country.

Head to our explainer here for everything you need to know about green hydrogen and what Egypt plans to do with it.

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