Egypt inks $4bn green hydrogen deal with Saudi firm
On Wednesday, ACWA Power, the Saudi-listed developer specializing in water, power, and green hydrogen initiatives, announced the signing of a framework agreement with Egyptian state-owned entities for the development of a green hydrogen project in the Suez Canal Economic Zone (SCZone).
This framework agreement builds upon the initial agreement signed in December 2022. It outlines the initial phase of the green hydrogen project, which will be powered by wind and solar plants and aims to produce 600,000 tonnes per year of green ammonia. The estimated investment for this phase exceeds $4 billion.
The second phase of the project holds the potential to achieve a capacity of 2 million tonnes per year. The agreement was formalized between ACWA Power and various entities, including the Sovereign Fund of Egypt (TSFE), the SCZone, the Egyptian Electricity Transmission Company (EETC), and the New and Renewable Energy Authority (NREA).
Green hydrogen is proving to be the latest energy commodity scramble among a few African countries. News of Egypt’s deal comes after the announcement of $1 billion in funds each set up by southern African neighbors, Namibia and South Africa, to finance green hydrogen projects in their respective countries and Morocco’s planned $60 billion outlay. With its vast resources, Africa has the potential to become one of the main global renewable energy hubs. But it remains to be seen whether its nations can deliver a cost-competitive product in an emerging global hydrogen sector. With this new initiative, ACWA Power's portfolio in Egypt now includes a total of five assets, encompassing operational projects, under construction, and in advanced development. All of these projects are focused on renewable energy, contributing to a combined power generation capacity of 1.4 GW.