Plans have been released for a large-scale green hydrogen facility within the Suez Canal Economic Zone which aims to turn Egypt into a global green energy hub.
Independent power company Globeleq has signed a Memorandum of Understanding (MOU) with the New and Renewable Energy Authority (NREA), the General Authority for Suez Canal Economic Zone (SCZONE), the Sovereign Fund of Egypt for Investment and Development (TSFE), and the Egyptian Electricity Transmission Company (EETC), to develop the facility.
As lead developer and investor, Globeleq will develop, finance, build, own and operate the green hydrogen project. It will be developed in three phases, totalling 3.6 GW of electrolysers and around 9 GW of solar PV and wind power generation.
The first phase, involving a pilot project using a 100 MW electrolyser, will initially focus on green ammonia fertilisers, while considering other end-uses of green hydrogen in the medium and longer term, including green fuels.
Globeleq intends to enter into long-term off-take agreements with leading and creditworthy Egyptian and international companies, while supporting their decarbonisation plans.
Egypt is emerging into the green energy spotlight, ahead of hosting COP27 in November.
The news comes as Saudi Arabian company Alfanar said on Monday it has signed an MOU to build a $3.5 billion green hydrogen project in Egypt, according to Reuters, stating the facility will produce 500,000 tonnes of green ammonia, which is used in agricultural fertilisers, from 100,000 tonnes of green hydrogen per year.
Capitalising on Egypt’s wind and solar PV resource, Globeleq aims to competitively produce hydrogen for exports and the local market. Egypt’s benign geographical location, at the crossroads of Africa, Europe, and Asia, where about 13% of global trade flows through the Suez Canal, puts the country in a position to become a global green energy centre.
Globeleq, which has been investing in Egypt since 2003, acquired the ARC for Renewable Energy S.A.E. 66 MWp solar PV plant at the Benban Solar Park near Aswan last year.
The plant was developed by the SECI Energia, Enerray and Desert Technologies consortium as part of the second round of the Egyptian government’s feed-in-tariff program.
It aims to support the country’s ambitious renewables strategy by developing new solar PV, wind, battery energy storage, seawater desalination and green hydrogen projects in Egypt.
Globaleq is 70% owned by British International Investment and 30% by Norfund, UK and Norway’s development finance institutions respectively.
The British Ambassador to Egypt, Gareth Bayley OBE, said the project supports both countries’ leadership and ambitions in renewable energy and combating climate change.
The Norwegian Ambassador to Egypt, Hilde Klemetsdal, said with Globeleq’s ambitious plans, Norway continues to strengthen its investments in green hydrogen in Egypt. He said, “This is an example of just the kind of industry solutions that are required for translating the green transition into action.”
Mike Scholey, CEO of Globeleq, said: “Bold and rapid collective action is required to put the world on a sustainable pathway.”
Waleid Gamal Eldien, Chairman of SCZONE, said the Egyptian government has ambitious energy transition plans, in addition to hosting COP27, and active steps are being taken to make SCZONE a major hub for green hydrogen.
He added, “This partnership reflects the interest of the global entities specialised in investing in such projects as they choose SCZONE as a destination for investment in green fuel projects, to serve the African and international markets.”
Ayman Soliman, CEO of the Sovereign Fund of Egypt, said the partnerships reflect the state’s integrated strategy to diversify energy sources and localise green hydrogen production with all its components covering upstream and downstream stages.
He said its objective is to maximise the use of Egypt’s renewable energy resources in partnership with global specialised developers, whereby the goals and strategy of The Sovereign Fund of Egypt are realised.