Egypt’s SCZone expects to sign $25bn in green energy deals at Cop27

The Suez Canal Economic Zone has signed 16 memoranda of understanding with international companies since March

The Ain Sokhna port on the Red Sea, close to where 15 of the 16 planned projects will be built. Courtesy Suez Canal Economic Zone

Egypt’s Suez Canal Economic Zone expects to sign about $25 billion worth of green energy deals at Cop27, the UN climate change summit to be hosted in the Red Sea coastal city of Sharm El Sheikh in November.

Of the 16 memoranda of understanding signed between the SCZone and international companies since March, about five could result in final agreements at the conference, an SCZone spokeswoman told The National.

Last week, the SCZone signed seven agreements worth at least $31bn to set up green hydrogen and ammonia production facilities. It previously signed seven initial agreements worth more than $14bn.

“SCZone has a vision based on making it a regional and global hub for the production of green fuel, as it is scheduled to announce several projects and final contracts coinciding with Egypt’s hosting of Cop27,” said SCZone chairman Walid El Dein, following a meeting with Egyptian Prime Minister Mostafa Madbouly on Saturday.

Egypt is aiming to increase its renewable energy sources to 42 per cent by 2035 and has been ramping up its green hydrogen ambitions in recent months before Cop27.

Hydrogen is projected to account for 12 per cent of global energy use and 10 per cent of carbon dioxide emissions reductions by 2050, driven by climate change urgency and countries’ commitments to net zero, the International Renewable Energy Agency says.

The colourless, odourless gas comes in several forms, including blue, green and grey. Blue and grey hydrogen are derived from natural gas, while green hydrogen is produced using renewable sources.

The Mena region has the highest number of low carbon-based hydrogen initiatives for export purposes and is projected to be the world’s largest supplier of green hydrogen in the coming years, according to research from the Abu Dhabi-based Clean Energy Business Council.

In the SCZone’s 460-kilometre area, 15 of the planned projects will be in the Ain Sokhna economic zone on the western side of the Gulf of Suez and one in East Port Said, which is close to the north exit of the Suez Canal.

“The integration between the industrial zones and the affiliated ports gave SCZone the competitive advantage that made it one of the most important global destinations and a regional hub for the green fuel industries,” Mr El Dein said.

The seven deals signed last week at the Egyptian government headquarters in New Alamein were between the SCZone, the Sovereign Fund of Egypt, the Egyptian Electricity Transmission Company, and companies from Egypt, India, Saudi Arabia, the UK and the UAE.

India’s Acme Group, which currently has projects in India and Oman, will build a $13bn hydrogen production plant with a total capacity of 2.2 million tonnes annually.

Africa-focused British company Globeleq plans to establish a $11bn green fuel production plant on an area of 10 million square metres and an annual production capacity of two million tonnes.

Saudi Arabian company Alfanar said on Monday it aims to develop a $3.5bn centre in Sokhna that will produce 500,000 tonnes of green ammonia from 100,000 tonnes of green hydrogen per year.

Green ammonia, which is used in making fertilisers, is made with hydrogen that comes from water electrolysis powered by alternative energy.

Alfanar has renewable energy projects in Egypt, India, Saudi Arabia, Spain and the UK.

It currently operates a 50 megawatts solar project in Aswan’s Benban Solar Park. The electricity generated from the solar plant offsets about 57,000 tonnes of carbon dioxide emissions per year, the company said.

The UAE’s Alcazar is looking to construct a $2bn green fuel production complex with an annual production capacity of 230,000 tonnes.

Also from the UAE, the K&K Group plans to build a green hydrogen production plant with the same capacity, although the investment value was not disclosed.

A $1.5bn project from the UK’s Actis will establish green fuel production plants with a capacity of 200,000 tonnes annually.

Finally, Egypt’s Mediterranean Energy Partners will invest $250m to establish a green ammonia plant with a production capacity of 120,000 tonnes per year.

The companies will now begin conducting feasibility studies on the projects, the SCZone said.