UAE's AMEA Power signs agreement to set up green hydrogen project in Egypt

'Advanced discussions' with several companies to secure a long-term buyer for green ammonia

The Zafarana wind farm in Egypt, which is diversifying its energy sources. Victoria Hazou / The National
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Dubai-based AMEA Power has signed a framework agreement with Egypt to develop a 1,000 mega watt green hydrogen project for the production of green ammonia.

The project, to be located in Egypt’s Suez Governorate, will have a capacity to produce 800,000 tonnes of green ammonia a year for domestic use and export, the company said on Wednesday.

AMEA Power has teamed up with the Sovereign Fund of Egypt, the Egyptian Electricity Transmission, the New and Renewable Energy Authority, and the Suez Canal Economic Zone to develop the project.

“The world is entering a new era of clean energy deployment, where emerging solutions like green hydrogen will present huge opportunities for investment, job creation and countries like Egypt to become major hubs for clean energy,” said chairman Hussain Al Nowais.

“This project is the first of several large scale clean energy projects that AMEA Power will develop across the region.”

Hydrogen, which is produced from both renewable energy and natural gas, is expected to become a critical fuel as economies and industries transition to a low-carbon world.

It comes in various forms, including blue, green and grey. Blue and grey hydrogen are produced from natural gas, while green is derived from splitting water by electrolysis.

Low-carbon ammonia, which is made from nitrogen and clean hydrogen, is the most promising at-scale hydrogen carrier and potential clean fuel for a wide range of applications, including transport, power generation and fertiliser production.

The hydrogen plant will be developed in two 500MW phases to “de-risk” the project and ensure it benefits from technology efficiency improvements and declining equipment prices, AMEA Power said.

The company is in “advanced discussions” with European, Chinese and Japanese companies to secure a long-term buyer for the green ammonia, it said.

The Dubai-based company is also in talks with the Egyptian Hydrocarbon Corporation to provide a portion of the green hydrogen production to support the development of green industries in the north African country.

AMEA Power, which has completed a feasibility study for the project, said a final investment decision was expected within the next two to three years. Operations on the first phase of the project are expected to begin in 2027.

Egypt, one of Africa’s largest economies, has been looking to position itself as a regional energy hub and hydrogen production is key to its strategy.

Earlier this year, the country signed a $3 billion agreement month with a consortium led by French firm EDF Renewables and Egyptian company Zero Waste to develop a green hydrogen megaproject in Ain Sokhna on the Red Sea that will produce up to 350,000 tonnes of green fuel annually for ships passing through the Suez Canal.

“This great success marks a major milestone for Egypt’s green strategy and was only possible with the persistence of all government sponsors and the partners’ belief in the potential of Egypt as a green hydrogen hub,” Ayman Soliman, chief executive of the Sovereign Fund of Egypt, said.

“Egypt has put tremendous effort into the development of its Green Hydrogen Program and has made incredible progress reaching this stage in a matter of months.”

Globally, the hydrogen industry is expected to be worth $183 billion by 2023, up from $129 billion in 2017, according to Fitch Solutions. French investment bank Natixis estimates that investment in hydrogen will exceed $300 billion by 2030.

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, Abu Dhabi's clean energy company Masdar said in a report last week.

Updated: November 16, 2022, 8:42 AM