Egypt and EU consortium to invest €7 billion in green hydrogen initiative

CAIRO – June 29, 2024: In a major event at the Egypt-Europe Investment Conference, President Abdel Fattah el-Sisi and European Commission President Ursula von der Leyen officially opened the proceedings.

During the conference, a key cooperation agreement was signed for the production of green hydrogen and its derivatives, such as green ammonia, in the Ras Shuqair region.

The signing ceremony was attended by Prime Minister Dr. Mostafa Madbouly, Minister of Electricity and Renewable Energy Dr. Mohamed Shaker, Minister of Transport Kamel El-Wazir and Executive Vice-President of the European Commission Valdis Dombrovskis, Commissioner for Trade.

The agreement, which involves the Red Sea Ports Authority and the New and Renewable Energy Authority, was concluded with the consortium of EDF Renewables (France) and Zero Waste (a joint venture between Egypt and the Emirates).

Transport Minister Kamel El-Wazir emphasized that this initiative is in line with the president’s directives regarding the location of the green hydrogen industry, optimizing the investment climate and positioning Egypt as a regional and global energy center. The project is expected to significantly boost sustainable development by localizing green hydrogen production and attracting large corporations to set up similar ventures.

Minister El-Wazir noted the unique nature of the project, emphasizing that the state is not obliged to provide any infrastructure or use the power grid for the project, nor does it bear any financial obligations.

This rare investment, usually led by the private sector, requires significant financial and technical capabilities and is characterized by long-term returns, spanning about fifty years. The Ministry of Transport will coordinate with the relevant ministries and authorities to finalize the legal procedures and obtain the necessary approvals.

The economic impact of the project includes direct revenues from service charges, project licensing, land use fees for wind and solar farms, green hydrogen and ammonia plants, and export tonnage taxes, all payable in U.S. dollars.

In addition, indirect benefits include the creation of jobs in the construction and operational sectors, with the project expected to produce over one million tonnes of green ammonia per year.

The EDF Renewables and Zero Waste consortium will invest EUR 2 billion in the first phase, and the total cost of the project in three phases is estimated at EUR 7 billion. The pre-feasibility study identified the required land: 420 km² for renewable energy generation at Ras Shuqair and 1.2 million m² for the production plant, along with a 7-kilometer electricity transmission corridor.

The project will also finance and develop a 400-metre quay for the Red Sea Ports Authority, with a 17-metre draft and all necessary utilities, and construct a desalination plant to meet the project’s water needs.

This project is part of global efforts to transition to clean energy and enables Egypt to meet its commitments under the Paris Agreement and COP27 by reducing carbon emissions locally and globally.

The project aims to make Egypt a regional energy hub amid international competition for this promising industry, which offers benefits such as renewable energy generation, green fuel production and significant reductions in greenhouse gas emissions.

Additionally, the project is expected to create hundreds of thousands of jobs during the development, construction and operation phases, generating significant annual export revenues.

The creation of a new Red Sea port under the Red Sea Ports Authority, without any financial burden on the state, will also encourage the gradual localisation of supporting industries (electrolysers, photovoltaic panels, wind turbines).

In addition, the project will provide sustainable fuel for ships transiting the Suez Canal, meeting evolving global maritime standards, reducing pressure on natural gas resources and offering alternative fuels to support industrial development. The company operating the project will provide training for Egyptian workers, with the aim of reaching 95% of the domestic workforce.

This ambitious undertaking underlines Egypt’s commitment to developing sustainable energy solutions and economic diversification, strengthening its position as a leading player in the global green energy landscape.