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$41.5bn of investments expected in hydrogen projects through 2030

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According to an official source, Egypt’s estimated investments in green hydrogen projects through 2030 total $41.5 billion dollars, with an expected investment volume of $81.6 billion dollars beyond that.

The Egyptian Sovereign Fund, the Egyptian Electricity Transmission Company, and a potential contribution from the Suez Canal Economic Zone are expected to contribute between 20 and 25 percent of the total investment amount in the first phase.

Scatec, a renowned renewable energy producer, plans to invest $5.2 billion in the first phase of its projects, with the state contributing between $260 and $330 million, with the firm aiming to invest $15.6 billion in hydrogen projects.

Maersk also plans to invest $4.7 billion in Egypt’s first phase of hydrogen projects, which will be completed by 2030. The state’s participation in the projects runs from $240 million to $290 million, with the firm hoping to boost its investment to $14 billion when the first phase is completed.

Furthermore, Total plans to invest more than $5 billion in a hydrogen project in Egypt until 2030, with the government contributing between $250 million and $310 million.

EDF, a French corporation, also wants to build hydrogen plants in Egypt until 2030, with a $1 billion investment and a state commitment of $500 million to $600 million. The corporation plans to increase its investments to $3 billion in the following years.

Amia Power, a subsidiary of the UAE’s Al-Nowais Group, proposes to invest $800 million in hydrogen projects through 2030, with plans to increase to $1.9 billion after that.

Furthermore, Masdar, a UAE corporation, plans to invest $11.3 billion in hydrogen projects through 2030, with the state contributing between $570 and $710 million, with the firm’s investments likely to climb to $12.5 billion after 2030.

Demi, a Belgian business, plans to invest $3.6 billion in Egypt’s hydrogen projects through 2030, with the state’s participation ratio projected to be between $180 million and $230 million.

Furthermore, Fortisky Future aims to build hydrogen projects worth up to $10 billion by 2030, with the state contributing between $500 million and $630 million.

Rystad Energy studies

The hydrogen projects are expected to cost roughly $20 billion without additional infrastructure. According to Rystad Energy studies, the projects should be operational by 2035.

The research said that a string of projects launched in Egypt over the past three months have fascinated global entrepreneurs, underlined the country’s potential, and come as Egypt prepares to host the COP27 in 2023.

The country’s location, natural gas infrastructure, liquefaction facilities, bunkering market, and marine ports, as well as its high solar and wind potential, all contribute to foreign companies’ interest in Egypt. Egypt is also adjacent to areas such as the European Union and the Middle East, which are expected to have high hydrogen demand in the future years.

Egyptian government plans

Egypt’s government wants to issue a $40 billion national hydrogen plan in the next months, recognizing the importance of green hydrogen and ammonia production, storage, export/import, and governmental assistance and tax incentives as part of its economic growth strategy. The process of creating, running, and maintaining hydrogen projects has been streamlined, with only one permission required, resulting in less red tape.

Other non-financial incentives might include specific customs points for export/import, utility connection fees passed on to the state, repayment of 50% of land allocation costs (if the project starts production within two years), and other non-financial incentives.

Dr. Minh Khoi Le, head of Hydrogen at Rystad Energy, said of the billion-dollar investment ambitions, “Egypt has all the requirements to become a green hydrogen behemoth – amazing renewable resources, room for large projects, and building experience.” The Egyptian government’s projected investment of $40 billion proves its commitment and will attract more international investment.”

“Sitting between three continents and with the Suez Canal transporting around 12% of all seaborne freight in the globe, Egypt can deliver renewable energy both close and far,” he continued. The Egyptian agriculture industry may expect to be one of the greenest in terms of fertilizer usage, which will boost the home market.”

This plan would be a huge step forward for Egypt’s green hydrogen economy, according to Rystad Energy, which noted that upcoming legislation will allow for green hydrogen and ammonia plans and that with over 11 GW of projects already announced, the consultancy anticipates a large inflow of foreign investment.

In 2021, several feasibility studies and memorandums of understanding were published between Egyptian state entities and prominent multinational ammonia and hydrogen industry participants for the development of green ammonia and green hydrogen. Due to the Egyptian government’s commitment, these research and preliminary agreements are likely to progress to projects, which should attract more foreign investors to enter the Egyptian hydrogen and ammonia industry.

Egypt’s major projects

EDF, a French utility, and ZeroWaste, a UAE-based project developer, inked an MoU with Egypt’s Suez Canal Economic Zone (SCZONE) to create 350,000 tonnes of green fuel yearly in the Ain Sokhna region for ships, boats, and tankers passing through the Suez Canal.

The first phase of the project will create 140,000 tonnes of green ammonia from 25,000 tonnes of green hydrogen derived from desalinated seawater and renewable energy. The first quarter of 2026 is set for commissioning. After that, capacity will steadily expand to 350,000 tonnes of green ammonia per year. A total of $3 billion will be invested in the project.

In addition, Al Nowais Group subsidiary AMEA Power signed an agreement with SCZONE to generate 390,000 tonnes of green ammonia per year in Ain Sokhna for export.

Scatec, a Norwegian company, has also revealed ambitions to build a $5 billion green hydrogen and ammonia complex in the SCZONE. Scatec has signed a memorandum of understanding with the General Authority for SCZONE for the project, which will be capable of producing 1 million tonnes of green ammonia yearly with the potential to increase to 3 million tonnes. Green ammonia will primarily be sold to European and Asian markets, where clean ammonia demand is quickly expanding.

Maersk, a Danish shipping firm, is involved in several projects in the nation. Petrofac, a British oilfield services firm, and H2-Industries, a New York-based hydrogen production and energy storage company, want to make green fuels, green ammonia, and liquid organic hydrogen carriers (LOHC).

SCZONE, a global logistics center that seeks to connect Europe, Africa, and Asia through the Arabian Gulf and is responsible for 20% of international container commerce and 10% of seaborne trade, is expected to get over 80% of the announced green hydrogen projects in Egypt.

The hub’s Air Sokhna area is next to a saltwater desalination plant (150,000 m3/day), a sewage treatment facility (35,000 m3/day), and ammonia bunkering facilities (80,000 tonnes), making it ideal for the trading of hydrogen and its derivatives. The seven projects launched in the previous three months for the region have a total capacity of 10.76 GW, equivalent to nearly 1.5 million tonnes of green hydrogen production.

TOTALEren has joined the expanding list of energy providers interested in entering Egypt’s green hydrogen market.

The Suez Canal Economic Zone (SCZone), the Sovereign Wealth Fund of Egypt (TSFE), the Egyptian Electricity Transmission Company (EETC), and the New and Renewable Energy Authority have all signed agreements with the French enterprise, which is a subsidiary of TOTALEnergies (NREA).

The partners will perform feasibility studies for a green hydrogen plant in the Gulf of Suez with a capacity of 30,000 tonnes of green hydrogen per year. The capacity is much lower than that negotiated by other companies, such as EDF Renouvelables, a French energy company aiming to produce 350,000 tonnes per year by 2030; Masdar, based in the United Arab Emirates, is aiming to deliver 480,000 tonnes per year by 2030; and Amea Power, based in the United Arab Emirates, wants to build a green hydrogen project with a capacity of 240,000 tonnes per year by 2026 and ramp it up to 390,000 tonnes per year in the

According to SCZone, TOTALEren plans to increase its capacity to 1.5 million tonnes per year. According to a statement released by the authorities, “the Egyptian state is working assiduously to promote the transformation to a green economy based on clean energy, particularly by providing facilities and incentives to attract green investments and utilize green financing opportunities.”

Scatec, the Norwegian corporation that is also Africa’s largest renewable energy generator, is among the several companies that have expressed interest in manufacturing green hydrogen in Egypt. Scatec is collaborating with Orascom Construction and Fertiglobe on this project.

Arnes Biogradlija
Creative Content Director at EnergyNews.Biz

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