To lower greenhouse gas emissions, improve air quality, and provide chances for a gradual shift toward reliance on sustainable energy, Egypt has vigorously advocated for increasing the generation of renewable energy.
The construction of several projects to generate electricity from wind and solar power, with the goal of supplying green hydrogen manufacturing projects and saltwater desalination projects, resulted in a considerable expansion of the energy sector. On the fringes of the United Nations Conference of the Parties (COP27) in Sharm El-Sheikh in November, nine agreements were made between Egypt and significant coalitions of worldwide energy firms to begin new projects in the field of renewable energy with investments surpassing $83 billion.
Vice Chairperson and CEO of ACWA Power Paddy Padmanathan predicts that by 2026, the company will invest up to $10 billion in Egypt.
He also said that the business will invest $1 billion in 2023, followed by $3 billion in investments each year from 2024 to 2026.
He emphasized that these investments do not include the targeted green hydrogen projects and that if ACWA Power were to enter this market, these investments would grow significantly.
He stated that the Kom Ombo plant project, which has a 200-megawatt wind energy production capacity, is one of the company’s most notable projects in Egypt in 2022. He added that we are currently working to close some financial matters related to the project with investments totaling about $300m and that the project will go into effect before the end of the year.
He emphasized the company’s desire to advance its collaboration with Egypt’s energy industry in order to support the switch to sustainable and clean energy and lower emissions.
He continued by saying that discussions with significant public and private sector banks are ongoing in order to get loans and funding for projects in Egypt.
He mentioned that the business had begun negotiations and was seeking to finalize an agreement to build 1.1 gigawatts of fresh wind energy in the Gulf of Suez region. He predicted that the project’s investments would total more than $1 billion.
The Saudi ACWA Power Company will own the remaining share, which is anticipated to grow into a larger wind farm by 2026, while Hassan Allam Holding will own 25% of the project and 10% in favor of Egypt’s Sovereign Fund. The project will be carried out in cooperation with the Oman Investment Authority.
He mentioned a brand-new renewable energy project that will use wind energy to generate electricity with a capacity of roughly 10 gigawatts. We are currently coordinating with the Egyptian government to allocate the project’s land, and construction is expected to begin in 2024 with investments of between $7-8 billion.
He suggested that the development process for this project’s energy production will begin in 2024, explaining that it will not take as long as renewable energy projects because the site must be developed and all surrounding factors must be made to adapt to the project and new energy, which is anticipated to take about 18 months.
In a related context, he stated that the company had begun work on its green hydrogen project in collaboration with the American firms “Air Products” and Saudi NEOM. This project, which is thought to be among the largest in the world, is being built in the city of NEOM with investments, and production is anticipated to begin in 2026.
He emphasized that all three partners will have an equal ownership stake in the project, which will be ready to export hydrogen to international markets for use as a biofuel in transportation and communication networks once it is produced. With expenditures exceeding $6 billion, it will also create 1.2 million tonnes of green ammonia yearly, as well as 650 tonnes of green hydrogen daily.
He continued by saying that all of these initiatives have generated substantial expertise that qualifies them to construct numerous projects in this field, particularly in Egypt’s green hydrogen industry.
In particular, he noted that Egypt and Saudi Arabia have natural resources that qualify them to lead green hydrogen projects due to the nature of the wind and sun, which are present most days of the year. He predicted that green hydrogen would become one of the most significant sources of renewable energy in Egypt and around the world.
He emphasized that the group will begin researching investment potential in Egypt’s green hydrogen sector over the coming months, especially given that Egypt is a new regional hub for the export of renewable energy to Africa and Europe.
He explained that although Egypt already has a sizable electrical generation capacity, the majority of it is still derived from fossil fuels, making it a prospective market for the growth of renewable energy due to the presence of the sun. He claimed that all we required to extract electricity and sell it was to install solar panels.
He stated that Egypt has a huge number of nations and a promising platform to sell renewable energy and generate a lot of money. He anticipated that green energy will become more affordable and less expensive over the course of the following five years compared to conventional energy.
He stated that ACWA Power is achieving rapid growth by launching new projects based on its strong experience in developing and exporting renewable and green energy, pointing out that this is the real value of growth and not the acquisition of assets. He also addressed the company’s intention to buy stakes in Egyptian companies.
He emphasized that one of the crucial components for growth is the company’s ongoing effort to increase production capacity in ongoing projects.
According to him, the business intends to expand into other areas in the near future. It has already begun projects in Indonesia and is far along in its efforts to open an office there and launch new ventures. Additionally, the company’s projects in Thailand will begin next year.
According to him, the business already has assets and ongoing projects in South Africa, and in 2023 it intends to enter a new market by building a desalination plant in Senegal that will turn brine into potable water.
He emphasized that the company always takes the lead in alliances for the majority of its projects and invests some of its funds in addition to luring other investors to its side. He noted that the company will end this year with investments totaling more than $13 billion and that it expects to pump out investments totaling the same amount the following year.
Currently, ACWA Power has operations in 13 countries throughout the Middle East, Africa, Central Asia, and Southeast Asia. Its portfolio of 67 energy production and water desalination projects represents a $66.5 billion investment.
