Prime Minister Mostafa Madbouly recently convened a meeting in New Alamein City to assess the progress of Egypt’s green hydrogen projects.
The gathering, led by Eng. Randa El-Menshawy, First Assistant to the Prime Minister and Head of the Technical Secretariat of the National Council for Green Hydrogen and its Derivatives, highlighted several key efforts to advance the green hydrogen industry in Egypt.
The proposed incentives for green hydrogen projects include cash investment grants, VAT exemptions for equipment and tools, coverage of VAT on project buildings from the public treasury, and a streamlined approval process with a single authorization. While these measures are commendable, the effectiveness of such incentives in attracting substantial investment remains uncertain. Comparable initiatives in other countries have shown mixed results, often depending on the broader economic and regulatory environment. It is essential to monitor how these incentives will translate into tangible progress and whether they will address potential bureaucratic hurdles.
National Strategy and Land Allocation
The establishment of the National Council for Green Hydrogen and its Derivatives and the development of the National Strategy for Hydrogen signify a structured approach to fostering the green hydrogen sector. The allocation of approximately 42,000 square kilometers of land for renewable energy projects across various regions is a substantial commitment. However, the success of these projects will depend on efficient land use management and resolving any conflicts with existing land uses. Additionally, the geographical distribution of these lands raises questions about infrastructure readiness and the logistical challenges of developing projects in less accessible areas.
Production Capacities and Agreements: A Mixed Picture
Menshawy highlighted that 23 green hydrogen projects are currently underway in Egypt, with 23 memoranda of understanding signed with global developers. Additionally, 15 binding framework agreements have been established with existing developers. While these numbers indicate progress, the critical issue lies in the transition from agreements to actual project execution. Historically, many large-scale renewable energy projects have faced delays and cost overruns. Close scrutiny of project timelines, financial closures, and on-ground developments is necessary to gauge the real impact of these agreements.
Comparative Analysis with Global Benchmarks
Incentive Schemes: Learning from Others
Countries like Germany and Japan have implemented robust incentive schemes to support their green hydrogen industries. Egypt’s proposed incentives, though promising, need to be competitive enough to attract global developers. Benchmarking against successful models can provide insights into enhancing Egypt’s incentive structure, ensuring it is attractive and sustainable.
Project Execution: Bridging the Gap
The transition from signing memoranda of understanding to executing projects is a critical phase. Lessons from other countries show that strong regulatory frameworks, transparent processes, and effective stakeholder engagement are vital for success. Egypt must focus on these aspects to ensure that the signed agreements lead to operational projects, contributing to the country’s green hydrogen goals.
