Egypt’s green hydrogen ambitions are beginning to move from policy signaling to early execution, with Scatec’s 100 megawatt project in the Ain Sokhna Industrial Zone entering partial production as Cairo positions itself as a future export hub for Europe’s decarbonization needs.
The project, developed by Norway’s Scatec alongside the Sovereign Fund of Egypt, Orascom Construction, and Fertiglobe, is one of the most advanced green hydrogen initiatives in the Suez Canal Economic Zone, a location chosen for its proximity to export infrastructure and European shipping routes. Prime Minister Moustafa Madbouli confirmed this week that initial output has begun, with full-scale operations expected in the near term, signaling tangible progress in a sector where many projects globally remain at the memorandum stage.
The 100 megawatt capacity places the project firmly in the pilot-to-early-commercial category rather than at industrial scale. That distinction matters. At current electrolyzer efficiencies and renewable power costs, projects of this size are often designed to validate supply chains, permitting pathways, and export logistics rather than deliver immediate cost-competitive volumes. Still, the project’s advancement gives Egypt a functional reference point as it courts European offtakers seeking non-EU renewable hydrogen supply to meet tightening climate targets.
Government backing remains central to the project’s trajectory. Madbouli reiterated state support during a high-level meeting that brought together energy, industry, planning, and transport ministers, along with representatives from the European Union, Norway, and several European financial institutions. The presence of both EU and European bank officials underscores how closely Egypt’s hydrogen strategy is tied to European demand signals and financing frameworks, particularly as the EU looks beyond domestic production to meet its import targets under REPowerEU.
Egypt’s broader energy context adds urgency to the hydrogen push. The country is expanding renewable generation capacity rapidly, with Prime Minister Madbouli pointing to discussions underway to raise the renewables share of the national energy mix beyond the current 42 percent target by 2030. Large-scale solar projects are a key part of that plan. Scatec’s Obelisk solar plant in Qena Governorate has already delivered its first phase, while a second phase is expected before the peak summer demand period. In parallel, the planned Energy Valley project in Minya Governorate, backed by USD 1.8 billion in investment, illustrates the scale of capital Egypt is attempting to mobilize to underpin both domestic power needs and future hydrogen production.
From a market perspective, the alignment between renewable build-out and hydrogen development is necessary but not sufficient. Export-oriented green hydrogen depends on more than generation capacity. It requires long-term offtake agreements, certification alignment with European standards, and competitive delivered costs once transport and conversion are factored in. While Scatec’s leadership has reiterated its intention to serve European markets, details on pricing structures, offtake volumes, and timelines remain limited, reflecting the early stage of commercial negotiations.
European officials have been careful in their language. EU Ambassador Angelina Eichhorst described Cairo as a global pioneer in green hydrogen, but the reality is more nuanced. Egypt has moved faster than many peers in North Africa and the Middle East in assembling government support, international partners, and pilot projects. Yet the gap between partial production at 100 megawatts and the multi-gigawatt scale implied by European import scenarios remains substantial, both technically and financially.
For Egypt, the strategic calculation is clear. By leveraging its solar and wind resources, industrial zones along the Suez Canal, and political alignment with European climate goals, the country aims to secure a role in future hydrogen supply chains. For Europe, projects like Ain Sokhna offer diversification away from domestic constraints and geopolitical risks, but only if scale, cost, and reliability can be demonstrated over time.
