Scatec has entered into a joint venture agreement with Fertiglobe plc, a leading ammonia producer jointly controlled by OCI N.V. and Abu Dhabi National Oil Company (ADNOC), and The Sovereign Fund of Egypt (TSFE), to create a 50-100MW green hydrogen facility as feedstock for green ammonia production.
Scatec will construct, operate, and majority own the facility, and will engage into a long-term offtake arrangement with Fertiglobe subsidiary EBIC. The facility, which will be built near EBIC in Ain Sokhna, is the first step toward the development of Egypt’s first green hydrogen hub.
“We are proud to establish a strong partnership with Fertiglobe and the Sovereign Fund of Egypt to move the green agenda forward in Egypt. The development of this green hydrogen project builds on our long experience in project development, financing, and delivery of renewable energy projects in emerging markets. New business models and innovation have been at the core of Scatec since our inception, and we see green hydrogen as a natural part of our strategy and the renewable ecosystem in the years to come,“ says CEO Raymond Carlsen.
This new alliance is part of Scatec’s strategic program, “Power to X,” which aims to enable and realize industrial initiatives that contribute to carbon reduction by providing competitive renewable energy. The goal is to establish long-term relationships that allow Scatec to use its experience in renewable energy project development in high-growth sectors worldwide. Renewable energy technology, long-term offtake contracts, equity co-investments, and project financing from multilateral finance organizations all play a significant role in this strategy.
Ahmed El-Hoshy, CEO of OCI N.V., commented: “We are pleased to partner with Scatec, a leader in the global renewables market and Egypt’s largest renewable power developer. Together we will deploy world-leading technology to ramp up our green ammonia production profile and further expand our low-carbon portfolio. Fertiglobe is increasingly becoming an ideal springboard to capture the huge growth opportunities offered by the hydrogen economy. The participation of the Sovereign Fund of Egypt underlines Egypt’s commitment to become a global leader in the renewables space.”
Ayman Soliman, CEO of TSFE, commented: “We are pleased to be partnering up with Scatec and Fertiglobe who are pioneers in green hydrogen production, to provide a unique investment product that creates financial returns while nurturing the green economy at large. The Sovereign Fund of Egypt is a manifestation of Egypt’s 2030 Vision with the principles of sustainable development and impact investment instilled in its mandate, and this project is a cornerstone investment in our green sustainable portfolio build-up with many more to come.”
The partners will seek support from Egypt’s government for regulatory clearances and grid-based renewable energy procurement, with the goal of expanding solar and wind capacity to power Egypt’s green hydrogen goals in the coming years. The project will be implemented in close collaboration with top hydrogen technology companies and multilateral development banks. The necessary technical and development work, including the drafting of commercial agreements for the new facility, will begin immediately, with an investment decision expected in 2022 and the hydrogen facility operational by 2024.