Egypt, Norway sign deal on green hydrogen production in Suez Canal Zone


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 the project will be constructed in the industrial zone of Ain Sokhna, which belongs to the SCZone, and will have a production capacity of 1 million tonnes annually with a potential to be expanded to 3 million tonnes.

The project, expected to start production in 2025, will mainly export green ammonia to European and Asian markets, according to a statement by Scatec on 10 March.

Egypt is scheduled to host the 2022 United Nations Climate Change Conference (COP27) in November with a vision to promote green energy projects, including green hydrogen projects.

Egypt’s Prime Minister Mostafa Madbouly and Norwegian Foreign Minister Anniken Huitfeldt, who is visiting Egypt for the first time as foreign minister, attended the signing ceremony for the two agreements.

Egypt has been reviewing various offers submitted by international companies to establish green hydrogen projects in the SCZone, as the country seeks to localise the production of clean-burning fuel.

The agreements were signed by the 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.

As per the agreements, green hydrogen will be supplied by the Norwegian side to an Egyptian company owned by Fertiglobe, which will use it as a supplementary feedstock to produce green ammonia under a long-term contract.

"In cooperation with our partners in this landmark project, we are pleased to take an important step in bringing low carbon solutions to the world from Egypt,” said Ahmed El-Hoshy, CEO of Fertiglobe.

The consortium will work on deploying world-leading technology to ramp up green ammonia production and increase low carbon investments, El-Hoshy added.

Developing green infrastructure in Africa

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.

As per the framework agreement, the three signatories seek to enhance cooperation to develop green hydrogen facilities and infrastructure in multiple African countries.

The first phase of the project includes DR Congo, Tanzania, Ghana, South Sudan, Rwanda, Sierra Leone, Burundi, Djibouti, and Uganda, the Cabinet said, adding that the parties seek to expand cooperation to include other African countries in the second phase.

Cooperation, as per the agreement, involves the implementation, development, financing, construction and operation of green energy, green hydrogen and infrastructure projects.

It aims to promote diversification of energy supplies in order to enhance energy security, develop new, sustainable and renewable forms of energy, and support access to renewable energy.

The agreement will also enhance technology transfer to produce sustainable energy, achieving energy efficiency, enhancing capacity building, and facilitating investment in green energy in African countries, the statement said.

The framework agreement also includes the formation of a coordinating committee among the three signatories, which will be entrusted with identifying opportunities for developing projects in these countries.

Regional energy hub

In a meeting with Norway’s FM Huitfeldt today, Madbouly said Egypt is determined to implement huge green hydrogen projects to become a regional hub for energy.

Egypt looks forward to increasing cooperation with Norway within the framework of the agreement signed today to develop renewable energy projects, Madbouly added.

The PM hailed the rapidly increasing Norwegian investments in Egypt, especially in renewable energy, water desalination, and fish production.

Besides huge investments by Norway in fish production and other areas in Egypt, Norway’s Scatec Solar completed in 2019 the $4 billion, 1.8 GW Benban solar project in Upper Egypt’s Aswan – one of the world’s biggest solar parks.

Egypt has secured Norwegian investments and projects worth more than $3 billion in 2021, Egyptian Ambassador to Norway Amr Ramadan said in January.

Presser between top diplomats

In a press conference on Thursday with Huitfeldt, Egypt’s Foreign Minister Sameh Shoukry said the Norwegian companies are keen to increase their investments in Egypt in light of the economic reforms Egypt has carried out.

Egypt benefits from the experience and capabilities of the Norwegian companies to support areas of priority in Egypt, especially in renewable energy and water desalination, Shoukry said.

He added that Egypt aspires to increase economic cooperation with Norway in the near future.

For her part, Huitfeldt said she discussed with Shoukry issues related to human rights, economic relations, and COP27.

Norway looks forward to seeing Egypt’s successful hosting of COP27, she said.

Huitfeldt hailed Egypt’s efforts to search for a solution to the Israeli-Palestinian conflict, including a ceasefire that Egypt brokered between Palestinian factions and Israel in Gaza last May.

Shoukry also praised Norway’s role in bringing the Palestinian and Israeli views closer as well as the country’s “balanced policy” that aims to achieve stability, security, and peace at the regional and international levels.