The green hydrogen sector in Egypt has emerged as a critical component in meeting the country’s increasing energy demands while combating the climate crisis and reducing dependence on fossil fuels.
With its favorable geographical location and cost advantages, Oman aims to enhance its investments in Egypt’s renewable energy sector by exploring the development of a massive green hydrogen project. Negotiations have begun between the Omani Investment Authority, the Egyptian Sovereign Fund, and the Ministry of Electricity to assess the feasibility of this endeavor, which could range between $3 and $5 billion. The Suez Canal economic zone is among the potential areas being considered for hosting the project.
Egypt’s abundant renewable energy potential, particularly in wind and solar power generation, coupled with its existing infrastructure, has attracted billions in investments to the green hydrogen sector. During a recent visit by Sultan Haitham bin Tariq of Oman to Cairo, discussions between the head of the Omani Investment Authority, Abdul Salam bin Muhammad Al-Murshidi, and Egyptian officials continued, indicating progress toward implementing the large-scale green hydrogen project. The official announcement of the project is expected before the end of the third quarter of 2023.
Al-Murshidi highlighted the longstanding relationship between Oman and Egypt, foreseeing significant economic cooperation in the coming years, with Egypt being the largest Arab market and a leader in the clean energy sector.
This project marks another step for the Omani Investment Authority in strengthening its presence in Egypt’s renewable energy sector. Previously, the authority signed a memorandum of understanding with Saudi company ACWA Power to study investment opportunities in the Egyptian Suez wind plant project. This investment, worth approximately $1.5 billion, represents Oman’s first venture into Egypt’s renewable energy sector and will become the largest wind power project in the Middle East once fully developed by 2026.
Egypt has set an ambitious goal of producing 42% of its electricity from renewable sources by 2035, with the green hydrogen sector playing a crucial role in achieving this target. The government has designated 2022 as the “Year of Green Hydrogen,” underscoring its commitment to the sector. Egypt has taken the lead among Arab countries in hydrogen projects, with approximately 23 projects focused on producing green hydrogen and green ammonia, according to a report by the Organization of Arab Petroleum Exporting Countries (OAPEC).
Despite its potential, the green hydrogen sector in Egypt faces several obstacles and challenges. These include the high cost and limited availability of necessary technologies, the requirement for a substantial electricity source, and transportation and storage limitations, as highlighted by Eng. Mohamed Anwar, a consultant and chief expert in SCADA control systems at the Egyptian Electricity Holding Company of the Ministry of Electricity and Renewable Energy.