Egypt’s Suez Canal Economic Zone signed $83 billion worth of green energy deals and nine agreements at the UN climate summit Cop27.
The deals exceeded the expectations of the economic zone, which told The National in August that it expected to finalise around five agreements worth $25bn.
As part of the summit's Energy Day on Tuesday, Egypt signed nine framework agreements with international power companies for green hydrogen and ammonia facilities in the economic zone along the Red Sea, the Egyptian cabinet said.
The facilities would collectively produce up to 7.6 million tonnes of green ammonia and 2.7 million tonnes of hydrogen annually.
Cop27 in Sharm El Sheikh started on November 6 and is scheduled to conclude on Friday.
Companies from the UAE leading projects include Abu Dhabi’s clean energy company Masdar and Dubai-based AMEA Power.
The agreements are a step forward from the 16 preliminary agreements the economic zone signed since March. The next steps will be for the companies to conduct studies in the coming months before final investments are made.
It will take until 2035 for all of the projects to be operational and will help Egypt reach its ambition to become a green hydrogen hub, Minister of Planning and Economic Development Hala El Said told Egyptian TV channel Al Hayah.
About 20 per cent of the $83 billion is “cash” investment, while 80 per cent is technology transfer investment, Ms El Said said.
Egypt aims to source 42 per cent of its energy from renewable sources by 2035, up from about 11 per cent in 2019.
Africa could capture as much as 10 per cent of the global green hydrogen market by 2050 as demand for cleaner fuel continues to grow amid decarbonisation efforts, a report from Masdar said last week.
Green hydrogen is produced using electrolysers powered by renewable energy to split water from oxygen, significantly reducing the carbon dioxide emissions caused by traditional hydrogen production methods that mainly use fossil fuels.
The production of hydrogen is responsible for around 830 million tonnes of carbon dioxide emissions per year, equivalent to the combined emissions of the UK and Indonesia, according to the International Energy Agency.
Masdar, along with Egyptian partners Infinity Power Holding and Hassan Allam Utilities, is planning a two gigawatt facility that will produce up to 480,000 tonnes of green hydrogen per year. The facility is scheduled to begin operations by 2026.
Last week, the same Masdar-led consortium announced a 10 gigawatt wind project in Egypt. One of the largest wind farms in the world, it would reduce carbon dioxide emissions by 23.8 million tonnes per year, equivalent to 9 per cent of Egypt’s current output, Masdar said.
Masdar also signed an initial agreement for another two gigawatt green hydrogen production plant in the Mediterranean in April.
The agreements strengthen UAE-Egypt ties and “highlights our two nations’ commitment to delivering zero-carbon energy solutions”, said Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Special Envoy for Climate Change and chairman of Masdar.
“Through Egypt’s hosting of Cop27, our two countries have also been able to exchange expertise and share insights that we will take forward and build on in the UAE when we host Cop28 next year,” Dr Al Jaber said.
AMEA Power said it will develop a 1,000 megawatt green hydrogen project with a capacity of 800,000 tonnes of green ammonia a year. Operations on the first phase of the project are expected to begin in 2027.
Elsewhere from the Gulf, Saudi Arabia’s Alfanar signed an agreement for a 500,000-tonne green ammonia facility. The company had signed a $3.5 billion initial agreement for the facility earlier this year.
Green ammonia, used for agricultural fertilisers, can be made by using hydrogen from water electrolysis and nitrogen separated from the air.
One of the most touted projects in recent months has been the 100MW green hydrogen facility from Norway’s Scatec, Fertiglobe, Orascom Construction and the Sovereign Fund of Egypt.
Fertiglobe is a joint venture between Adnoc and Netherlands-listed OCI.
On Tuesday, the European Bank of Reconstruction and Development said it will provide an $80 million loan for the facility, which will deliver up to 15,000 tonnes of green hydrogen annually. This will then be used as input for green ammonia production.
At full capacity, the facility’s green hydrogen production will save more than 130,000 tonnes of carbon dioxide emissions per year.
“It will 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,” EBRD said.
The consortium announced its plan to establish Africa’s first integrated green hydrogen plant about a year ago and last week began commissioning the first phase.
India’s largest renewable energy company ReNew Power and Egyptian multinational Elsewedy Electric signed an agreement for an $8 billion project that will produce 220,000 tonnes of green hydrogen and 1.1 million tonnes of ammonia per year. After making a final investment decision in the next 12 to 16 months, commission for the pilot phase is expected in 2026.
Africa-focused UK power producer Globeleq agreed to build a two million tonne green hydrogen facility.
Australian energy producer Fortescue Future Industries said it is considering projects that could support a capacity of 7,600MW of renewable energy, with the potential to produce 330,000 tonnes per year of green hydrogen.
“Egypt is showing the world here at Cop27 it is on the way to becoming a global powerhouse in the green energy value chain,” said Moataz Kandil, FFI president of Middle East and North Africa.
French energy producer Total Eren and Egypt-based investor Enara Capital signed an agreement for a facility in Ain Sokhna that would produce 300,000 tonnes of green ammonia per year.
Finally, EDF Renewables, a wholly-owned subsidiary of the French utility EDF Group, and Egypt's ZeroWaste agreed on a $3 billion facility that will produce 350,000 tonnes of green fuel for ships. Construction is expected to begin in 2024 and operations in 2026.