Egypt signed multi-billion dollar agreements and memoranda of understanding (MoUs) this week to encourage the creation of global consortia and alliances specialising in green fuel production. Green fuel is produced using renewable processes and from renewable resources.
“The aim of these MoUs is to prepare a [suitable] investment climate for global alliances to start the financial, technical, and legal studies necessary to contract with Egypt ahead of the 2022 UN Climate Change Conference (COP27) in Sharm El-Sheikh,” Yehia Zaki, chair of the Suez Canal Economic Zone (SCZone) told Skynews Arabia.
Earlier this month, Prime Minister Mustafa Madbouli said that Egypt was keen on attracting foreign investments in green hydrogen ventures and plans to introduce a package of incentives to press ahead with the country’s strategy to increase green fuel in its energy mix.
The premier said that this came as Egypt was becoming more determined than ever to implement huge green hydrogen projects to become a regional hub for energy.
The UN meeting, slated to be held in November in Sharm El-Sheikh, is gaining international momentum, especially from investors interested in green energy, seen as the holy grail in the battle to halt climate change.
The Suez Canal Authority (SCA) plans to produce between five and six million tons of green fuel products through projects that are currently being agreed upon with global consortia during the current period, with an expected date of production by mid-2024, Zaki added.
Over the past week, Hassan Allam Utilities signed two MoUs with the Abu Dhabi Future Energy Company (Masdar) to build hydrogen plants in the SCZone and on the Egyptian Mediterranean coast, with a production capacity of up to 480,000 tons of green hydrogen annually in various stages until 2030.
Under the two MoUs, Masdar, one of the world’s leading renewable energy companies, and Hassan Allam Utilities, the investment and development arm of the Hassan Allam Holding Group, will form a consortium to develop green hydrogen production plants in the SCZone and on the Mediterranean coast, a cabinet statement said.
The MoUs were signed as part of efforts to encourage global, Arab, and local companies to enter Egypt’s green energy investment market, added the statement. “These agreements represent a vital step forward in the development of the green hydrogen economy for both the UAE and Egypt and will play a significant role in our two nations’ decarbonisation efforts,” CEO of Masdar Mohamed Jameel said.
Egypt and the UAE are slated to host the next two sessions of the COP27 and COP28 meetings.
CEO Hassan Allam said that the first phase of the project will establish a green hydrogen production plant to be operational in 2026. The plant will produce 100,000 tons of green methanol annually to supply marine transport ships in the Suez Canal, along with 2.3 million tons of green ammonia for export by 2030, in addition to supplying local industries with green hydrogen.
Earlier this week, a consortium led by EDF Renewables and UAE-based Zero Waste signed an MoU worth $3 billion for cooperation on the joint development of a green hydrogen and green ammonia mega-project to be located in the SCZone.
The project, signed by the Egyptian New and Renewable Energy Authority (NREA), the Egyptian Electricity Transmission Company (EETC), the General Authority for the SCZone, and the Sovereign Fund of Egypt, will see the production of 350,000 tons of green fuel per year.
Another MoU was signed during the week by the Egyptian government and AMEA Power UAE, affiliated with the Al-Nowais Group, to set up a project to produce another 390,000 tons of green ammonia annually within the SCZone.
Last month, Egypt and Norway signed two agreements to construct and operate a project to produce green hydrogen with a 100 MW capacity in the SCZone and another agreement on the purchase of hydrogen. The deal comes within the framework of an MoU that Egypt signed with Norway’s Scatec earlier in March for the construction of Egypt’s first ammonia plant at a cost of $5 billion.
On 10 March, the cabinet said that this project would have a production capacity of one million tons annually, with the potential to expand to three million tons. The project, expected to start production in 2025, will aim to export green ammonia to European and Asian markets.
The agreements were signed by a consortium of the Sovereign Fund of Egypt, Egypt’s Orascom Construction, the Norwegian Scatec company, and the UAE-based ammonia producer Fertiglobe, a joint venture between the UAE’s Abu Dhabi National Oil Company and the Netherlands’ chemical producer OCI.
The partnership further solidifies the Fund’s commitment to investing in the energy transition value chain in line with Egypt’s roadmap towards zero-emission targets, Ayman Suleiman, CEO of the Sovereign Fund of Egypt, commented. “We are thrilled to play an active role in the green transformation towards a more sustainable future,” he said.
The Sovereign Fund of Egypt, Norway’s Government Pension Fund Global, and Scatec also signed a framework agreement on cooperation in developing renewable energy, green hydrogen, and green infrastructure in a number of African countries, namely the Democratic Republic of Congo, Tanzania, Ghana, South Sudan, Rwanda, Sierra Leone, Burundi, Djibouti, and Uganda as a first phase, with expansion into other African countries in a second.
In the meantime, the US company Honeywell announced that it was seeking to pump $200 million in investments into Egypt for the production of green fuel and petrochemicals for jet fuel production in cooperation with the Egyptian General Petroleum Corporation (EGPC), according to a statement by the cabinet.
The announcement came during a meeting between Minister of Petroleum and Mineral Resources Tarek Al-Molla and a delegation from Honeywell to discuss future cooperation and investment opportunities in the fields of green energy.
Honeywell’s Country President for Egypt Khaled Hisham said that the country had the potential to “become a pivotal centre linking Europe with the Middle East, especially in green fuel projects to refuel ships and produce hydrogen and ammonia.”
The company also seeks to establish a centre to follow up on projects and provide consulting services in Egypt, Hisham added. Honeywell wants to expand its business portfolio in Egypt and participate in strategic projects, especially in the fields of green fuels and providing advanced technologies to reduce emissions. It could also contribute to initiatives being prepared for launch at COP27.
*A version of this article appears in print in the 28 April, 2022 edition of Al-Ahram Weekly.