Norwegian developer and operator of renewable energy projects Scatec announced on Thursday that it has today signed a memorandum of understanding (MOU) with the General Authority for Suez Canal Economic Zone (SCZONE), The Sovereign Fund of Egypt (TSFE), the Egyptian Electricity Transmission Company (EETC), and the New and Renewable Energy Authority (NREA), to jointly develop a green ammonia facility in Egypt with a production capacity of one million tonnes annually and with a potential for an expansion to three million tonnes annually.

The green hydrogen and ammonia facility will be located in SCZONE’s Ain Sokhna Industrial Zone and powered by renewable energy plants to be built in close proximity on an area of land allocated by NREA, the company said in a press statement.

The statement said the project is the first large-scale project for production of green ammonia in the country, which also includes the participation of the Government of Egypt.

It said the project would be implemented in phases, and long-term offtake agreements would be secured to enable non-recourse project financing for the green ammonia.

The green ammonia would mainly be exported to European and Asian markets, where demand for clean ammonia is increasing rapidly.

Scatec’s renewable energy portfolio includes solar, wind, hydro power plants and storage solutions with more than 3.5 GW in operation and under construction. 

On Wednesday, Zawya Projects had reported that TSFE is discussing a $1.5 billion desalination project powered by green energy with UAE-based Metito Holdings, Norway's Scatec, and Egypt's Orascom Construction.

A separate statement by SCZone, quoting a government spokesperson, said the project would be developed at a total investment of $5 billion. The statement said SCZone and Scatec had concluded a memorandum of understanding for the project in December 2021.

(Writing by SA Kader; Additional writing by Eman Hamed; Editing by Anoop Menon)