Key View: Non-hydropower renewables projects will drive power capacity growth in Egypt over our 10-year forecast period to 2031, making up more than 80% of the total net growth in capacity over this time frame. Robust government support, declining energy subsidies and vast natural solar and wind power potential will make Egypt a highly attractive destination for private renewables investors, boosting competitiveness in the market. Solar power will remain dominant in the market, though we expect technological advancements and declining equipment costs in the wind power sector will prompt significant wind capacity growth over the coming decade. Ambitious plans to build out its green hydrogen sector will also drive growth in the renewables sector, driving up demand specifically for renewable electricity over the medium-long term.

Key Forecasts And Latest Updates

• Egyptian authorities have seen a significant uptick in the number of large-scale green hydrogen production projects applied for over recent months. Between January and April 2022, five new green hydrogen production projects were announced, totalling more than 2.3mn tonnes per year (tpy) in hydrogen production upon completion. Four of the projects will be located in the Ain Sokhna and Suez Canal special industrial and economic zones. Investors include Scatec, Petrofac, Mediterranean Energy Partners, EDF Renewables, Zero Waste, AMEA Power, Masdar and Hassan Allam Utilities. The projects plan to come online between 2026 and 2030, with some of these plans including proposals to construct solar and/or wind power capacity to power the plants’ electrolysers. Given the vast amount electricity needed to produce these high volumes of hydrogen, we note that this points to significant growth in the demand for renewable electricity over the long term.
• ACWA is reportedly finalising the offtaker agreement with the Egyptian Electricity Transmission Company (EETC) for a 1.1GW onshore wind power project valued at USD1.2mn. Reports indicate that the agreement is expected to award the plant a contract to sell its electricity to the EETC at a rate of USD0.0258/MWh. The company is also negotiating a land use contract with the New and Renewable Energy Authority (NREA), and plans to reach a usufruct agreement within the coming months.
• Orascom Construction, Scatec and Metito Holdings have announced plans to construct a USD1.5bn solar-powered desalination plant in Aswan. The facility will consist of a 400MW solar power plant and a desalination plant with the capacity to process one to two million cubic meters of saline water per day. The project is part of USD2.5bn scheme, which envisages the construction of 17 desalination facilities around the country.