The EBRD’s financing will be used to acquire and construct a 100MW electrolyser facility to be powered by renewable energy and when fully developed, the facility will deliver up to 15,000 tonnes of green hydrogen annually. This, in turn, will be used as an input for the production of green ammonia to be sold on the Egyptian and international markets.
Egypt Green is owned, built and operated by Fertiglobe, one of the largest seaborne exporters of combined urea and ammonia, Scatec, a Norway-based integrated independent power producer, Orascom Construction, one of the largest engineering and construction groups in the MENA region, and the Sovereign Fund of Egypt, a state-owned, privately managed investment fund positioning itself as the partner of choice in Egypt.
Ammonia production is energy intensive and responsible for around 1.8 per cent of global carbon dioxide (CO2) emissions despite its essential nature as the building block for nitrogen fertilizers, a critical crop input that provides food to 40% of the world’s population.
Reducing the amount of CO2 produced during the manufacturing process is key to helping the world achieve its net zero targets by 2050.
The project is a first step towards the decarbonisation of the ammonia sector in Egypt and serve as a benchmark for future green hydrogen projects and showcase that hydrogen and ammonia production can be decarbonised in Africa’s largest ammonia-producing country, where current production is natural gas based, generating significant carbon emissions. At full capacity, the facility’s green hydrogen production will save more than 130,000 tonnes of CO2 emissions per year.
Nandita Parshad, Sustainable Infrastructure Managing Director at the EBRD, said the project will contribute to the decarbonisation of Egypt’s carbon-intensive industries and will demonstrate the commercial viability of green hydrogen production, paving the way for the decarbonisation of fertiliser and other hard-to-abate industries in our economies.
Andrew Tait, Chief Financial Officer of Fertiglobe, said: “This also underpins our future efforts to scale up towards the 100 MW electrolyser capacity, as we work on reaching the Final Investment Decision for the next phase of the project.”
Reham ElBeltagy, CFO of Orascom Construction, said its partnership with the EBRD spans several sectors that have a direct positive impact on infrastructure and industrial development.
Karim Badr, CEO of the TSFE Infrastructure & Utilities Subfund, said the loan is a testament from lenders to Egypt’s attractiveness as a green hydrogen hub.
Mikkel Tørud, CFO of Scatec ASA, said, “We see a massive green hydrogen demand driven by strong policy support globally, and Africa is perfectly positioned to take advantage of its low-cost renewables and strategic position.”
The EBRD also launched the EBRD Corporate Climate Governance Facility today at COP27, which aims to transform the way its clients do business by building their capacity to manage climate-related risks and opportunities and unlocking green investment.
Harry Boyd-Carpenter, EBRD Managing Director, Climate Strategy and Delivery, said, “Better climate governance, and a more informed understanding of the potential impact of physical and transitional climate risk, can improve EBRD clients’ access to finance and markets.”
With €30 million of funding for its advisory services, the EBRD facility – a hub of sustainability expertise to help businesses plan their green transition, scaling up work the Bank has done on a smaller scale since 2018 – will build up to work with over 100 clients by 2024.
It will provide financial institutions, corporate and municipal clients as well as policymakers with access to bespoke advisory services to help them upgrade their businesses’ climate governance and plan a green transition to bring them in line with international best practice and the goal of the 2015 Paris Agreement to limit climate change to 1.5C by 2050.
By the end of 2022, the EBRD claims it will become one of the first financial institutions to align all its lending and investments with the goals of the Paris Agreement, and has pledge to make more than half of its investments green by 2025.
Banks representing about 40% of global banking assets have likewise committed to aligning their lending and investment portfolios with net-zero emissions by 2050 and to setting intermediate targets for 2030 or sooner.
As these banks reduce their exposure to climate-related risks, other companies will come under pressure to demonstrate to investors that they too understand and are planning for climate risk.
At the same time, the spread of carbon pricing and taxes to more jurisdictions and EU plans to introduce a carbon border adjustment mechanism in 2026 mean corporates’ carbon intensity will directly affect their competitiveness and access to export markets. These disruptions in corporate access to finance and markets come in a decisive decade for climate-related investment.
One EBRD priority, said Boyd-Carpenter, is helping companies and cities transform themselves for this new era.
“As a development bank that focuses on the private sector … we want to leverage that to help those companies put in place corporate transition plans to help them get to a low-carbon future.”