Egypt signed a number of renewable energy deals worth $1.8 billion on Sunday as it seeks to diversify its national power mix and position itself as a regional energy centre and exporter, the country’s state news agency said.
Prime Minister Mostafa Madbouly was present at the signing of the agreements in the Suez Canal Economic Zone.
Some of the deals signed were with Norwegian renewable energy developer Scatec, the company said.
Scatec said it had signed a power purchase agreement with the Egyptian Electricity Transmission Company for a total capacity of 1.95 gigawatts solar and 3.9 gigawatt-hours battery energy storage systems.
Scatec will be compensated under a 25-year, dollar-denominated pay-as-produced PPA. The plant is expected to deliver about 6,000GWh of renewable energy annually, the company said.
“By integrating advanced solar and battery technologies, we are providing Egypt with sustainable, round-the-clock power and grid stabilising services, supporting both the country’s energy transition and the region’s long-term economic development,” said Scatec chief executive Terje Pilskog.
Egypt, an important gas producer in the Eastern Mediterranean, has been struggling with an energy crisis after production began to decline in 2022, despite big discoveries such as the Zohr gasfield. It has spent billions of dollars on importing costly liquefied natural gas to meet the shortfall. It produces just enough gas to meet domestic consumption and increasingly relies on imports to plug seasonal shortfalls.
Egypt’s gas production is forecast to slide to 43 billion cubic metres this year, down from 49 bcm last year and significantly lower than its peak of 70 bcm, Rystad analysis shows. Ageing gasfields, structural changes and lack of new discoveries are the primary factors for declining output.
Earlier this month, the Arab world’s most populous country agreed to export natural gas and petroleum products to Syria, adding to a series of regional energy commitments that contrast with its own tightening gas balance and rising domestic demand.
Egypt is aiming to dramatically expand the share of renewables in its power mix to 42 per cent by 2030 and 65 per cent by 2040, under the country’s Vision 2030 strategy.
Egypt's renewable energy sector today produces 8,866MW of power from wind, solar and hydroelectric sources, Energy Minister Mahmoud Esmat said in December.
Since July 2024, Egypt has added 1,150MW of wind capacity, 700MW of solar capacity and 300 megawatt-hours of storage. By the end of 2027, total installed renewable capacity is expected to nearly double to 17,991MW, supported by more than 9,000MWh hours of storage, he added.
In December, UAE-based Amea Power reached a deal with the International Finance Corporation and others to build a $700 million solar plant and battery energy storage system in Egypt to meet its growing electricity needs.
The Dubai-based renewable energy company is also partnering with Japanese energy company Kyuden International Corporation to deliver the 1,000MW solar plant combined with a 600 megawatt-hour battery energy storage system in the southern governate of Aswan.
The project is expected to be ready for commercial operations by June 2026. It is expected to generate more than 3 million MWh of clean electricity annually, enough to power more than 500,000 households, while offsetting 1.6 million tonnes of carbon emissions each year, Amea said.
Last month, Israel said it had approved a deal that will supply up to $35 billion of gas to Egypt from the Leviathan natural gasfield.
The first phase of Egypt’s electricity connection project with Saudi Arabia is also nearing completion, with operations expected to begin in the near future, Mr Esmat said in December.
The project, when complete, will enable the two countries to exchange up to 3,000 megawatts of power, in what is set to be one of the largest electricity links in the Mena region.
Egypt is seeking to become a regional electricity centre capable of exporting power to Europe through a similar linking project with Cyprus and Greece.
Electricity demand in the Middle East and North Africa has tripled since 2000, and it is set to increase by 50 per cent by 2035, as rapid population growth, urbanisation and industrial expansion drive consumption.
The Mena region, mainly viewed as a global oil and gas supplier, is now emerging as a global centre of electricity demand growth, according to a September report by the International Energy Agency (IEA).
The Middle East has the third largest growth in electricity demand after China and India, Dr Fatih Birol, executive director at the IEA, told The National at the time.
