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The European Commission announced this week that it is committing €124.3 million ($147 million) of funding to Egypt to support the country’s green hydrogen development and grid expansion projects.
The funding package includes €34.3 million ($41 million) for the Sokhna Green Ammonia project and €90 million ($107 million) for the Egypt Grid Modernisation and Expansion programme.
The projects were presented at the “Egypt's Sustainable Energy Outlook 2040: Cooperation for Shared Prosperity” conference in Cairo, co-hosted by the European Union and the Egyptian government.
Sokhna Green Ammonia project
The €34.3 million allocation for Sokhna Green Ammonia project from the EU and EIB "unlocks major concessional funding to accelerate the development of green hydrogen and renewable energy," the EU diplomatic mission to Egypt posted on its X social media account.
The project, also referred to as Egypt Green Hydrogen, is being developed by a consortium of Norway’s Scatec, Abu Dhabi’s Fertiglobe, and Egypt’s Orascom Construction and The Sovereign Fund of Egypt (TSFE). It comprises a 100 MW electrolyser facility to produce renewable hydrogen to be used as feedstock for the production of up to 74,000 tonnes of renewable ammonia at Fertiglobe’s existing ammonia facilities in Ain Sokhna.
The project is backed by a 20-year offtake agreement with Fertiglobe, which has a separate green ammonia supply deal with Germany-based Hintco starting 2027.
Egypt’s Daily News Egypt had reported last month that the project has commenced partial production of green ammonia and started exporting to Europe and the US.
In November 2023, during its pilot phase, Egypt Green Hydrogen had successfully delivered the world's first renewable ammonia shipment to Unilever in India for the production of near-zero-emissions synthetic soda ash.
Grid expansion
The larger €90 million component will contribute to the Egypt Grid Modernisation and Expansion programme, which aims to help Egypt integrate 22 gigawatts (GW) of additional renewable capacity into the national grid by 2030, in line with its clean energy targets.
T-MED under the Pact for the Mediterranean
The upcoming Trans-Mediterranean Renewable Energy and Clean-Tech Cooperation Initiative (T-MED), a flagship initiative of the Pact for the Mediterranean, is expected to host more such projects on its platform.
“The Mediterranean has vast, untapped renewable energy potential. We will soon launch T-MED, our key initiative under the Pact for the Mediterranean, to support our partners through win-win investments that attract private funding and strengthen cooperation across the region,” said Dubravka Šuica, Commissioner for the Mediterranean Region.
With solar and wind generation costs 35 percent lower than in the EU and continuing to fall, alongside promising geothermal potential and emerging offshore wind prospects, the MENA region could become a cornerstone of the Euro-Mediterranean green transition, according to the T-MED website.
T-MED Investment Platform is designed to develop a consolidated pipeline of renewable energy, electricity grid and clean tech manufacturing projects. These will be supported with financing that involve blended financing solutions, guarantees and technical assistance provided by international financial institutions, national development banks and private investors.
Calls for Expressions of Interest for projects and investors is likely to be issued with the first and second quarters of this year.
(Writing by Dennis Daniel; Editing by Anoop Menon)
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