Egypt is gearing up to make new investments in renewable energy to ease the recent blackouts and to face challenges related to shortages in the supply of the gas needed to power its electricity network.
On the other side of the Mediterranean, Europe is eyeing new sources of energy to compensate for the reduced supplies from Russia. It was only to be expected that investments in renewables and clean energy projects would take centre stage at the EU-Egypt Investment Conference held in Cairo on 29-30 June.
The conference aimed to foster bilateral investments, enhance economic cooperation, and explore new avenues for sustainable development. It comes after the upgrading of the relationship between the EU and Egypt to a Strategic Partnership in March.
“Relations between Egypt and the European Union are witnessing positive developments in various areas of cooperation. This conference is a message of confidence and support from the EU for our economy, Egypt’s President Abdel-Fattah Al-Sisi said during his opening speech at the conference.
“We are backing our new partnership with substantial public investments. But what truly makes a difference is that the private sector is also on board,” said European Commission President Ursula von der Leyen, at the Conference.
The conference saw the signing of deals and memoranda of understanding (MoUs) worth 67.7 billion Euros. Taking place under the title “Unlocking Egypt’s Advantages in a Fast-Changing World”, it explored the role of renewable energy in shaping a brighter future for Egypt and discussed cooperation in the green and circular economy, in addition to shedding light on the economic reforms taking place to enhance a green transition.
Von der Leyen said that Egypt’s plan to become a clean energy hub in the region puts it “at the centre of the Mediterranean crossroads, with new corridors to transport clean electricity and hydrogen… [it] will create new clean-tech value chains that span across our region, from the Gulf to Europe.”
“The EU delivers strategic investments that will help Egypt to realise this goal,” she said.
According to the government’s economic strategy for the next six years published in February, the aim is to make Egypt an international hub for green hydrogen by 2030. The strategy targets producing 3.2 million tons of green hydrogen a year by 2030, to be tripled by 2040.
Prime Minister Mustafa Madbouli attended the signing of four agreements at the conference worth $33 billion in the field of green ammonia with European developers, in addition to other agreements for green hydrogen projects.
These projects, according to Von der Leyen, are significant developments in Egypt’s renewable energy landscape, as energy is a key area of cooperation between Egypt and the EU.
Another agreement was also signed on Saturday between the Sovereign Fund of Egypt (TSFE), Orascom Construction, Fertiglobe, and SCATEC to start the official operation of the Ain Sokhna green hydrogen plant.
The plant, which has been in a trial phase since December, can produce 13,000 tons of green hydrogen annually. The project also includes establishing two solar and wind power plants with a total capacity of 250 MW to power the plant.
The New and Renewable Energy Authority (NREA) along with the Red Sea Ports Authority signed an agreement with the Egyptian-Emirati company Zero Waste and the French EDF Renewables to establish a seven billion Euro project for green hydrogen and green ammonia production in the Ras Shokeir area in South Sinai.
At the Investment Conference, Mohamed Shaker, Egypt’s minister of electricity and renewable energy, said that Egypt plans to increase the renewables share in the country’s energy mix to 42 per cent by 2030 and 58 per cent by 2040.
He said that Egypt’s new energy strategy would be published within the next two months. According to the strategy, there is a great scope for investment in renewable energy in Egypt, and the country is ready to provide a large number of investment opportunities to investors.
Gert Jan Koopman, EU director-general of Neighbourhood and Enlargement Negotiations, said that renewable energy projects are an integral part of the EU’s investment capacity and that this is an area that the EU will be prioritising in its investments in Egypt.
“The EU member states have a strong interest in investing in Egypt, as the costs of production and labour in Egypt are much lower than in the EU,” Koopman said, adding that facilitating investments through regulations and policies to encourage private-sector investments was on the agenda.
Ahmed Elsewedy, head of Elsewedy Electric, a leader in integrated energy, infrastructure, and digital solutions, said during the conference that Egypt has an edge because of its modern infrastructure to become an industrial hub for the region, especially if the country invests more in vocational training.
Hossam Heiba, CEO of the General Authority for Investment and Free Zones (GAFI), highlighted a package of reforms aimed at transforming Egypt into a regional investment hub, including key measures such as the expansion of free zones and investment areas, the introduction of the golden licence system to expedite project approvals, and the development of a unified electronic platform to establish companies.
Heiba said that the government has approved investment incentives for many sectors including green hydrogen and the automotive industry. “These reforms reflect Egypt’s commitment to creating a more efficient and investor-friendly business environment that will allow for more economic cooperation between Egypt and the EU,” he said.
* A version of this article appears in print in the 4 July, 2024 edition of Al-Ahram Weekly
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