Egypt aspires to become an exporting hub for clean energy from renewable sources, not just for Africa but for the world. The northern African country has something working in its favour: the climate, which it does not lack in the wind or sun.
To a great extent, this has given it considerable opportunities for investment in its renewable energy sector.
In 2021, Egypt was the top producer of renewable energy in the Arab world as its clean energy output grew by 8.3% compared to 2020.
Also, being strategically located at a focal point that links three continents: Africa, Asia and Europe. Egypt, with its infrastructure, has an edge at becoming an energy gateway to the world.
Egypt’s proximity to the Suez Canal, where about 12 per cent of global trade pass annually, is another major plus for the country and the Egyptian government has already signed several agreements with foreign companies looking to establish renewable energy projects involving solar, wind and green hydrogen within the Suez Canal Special Economic Zone.
The Suez Canal Special Economic Zone represents a major point of investment into Egypt as it provides a one-stop shop for foreign investors and a single point of contact that helps ease the process of navigating Egypt’s regulatory environment.
With all these advantages, to achieve its objective, Egypt plans to localize the industry related to the tasks of renewable energy plants to make all facilities available, reduce costs and encourage investors in the country.
It is prominent among its targeted investors in the renewable energy sector in India due to its high ranking and investments.
India ranks 3rd in the renewable energy country attractive index in 2021 and is the 3rd largest energy-consuming country in the world.
It has the world’s largest expansion plan in renewable energy with an ambitious target to achieve a capacity of 175 GW worth of renewable energy by the end of 2022, to be expanded to 500 GW by 2030.
With investible projects in India’s renewable energy sector worth about $181.73 billion as of 2021, and the country’s target of meeting fifty per cent of its electricity requirements from renewable energy sources by 2030, India is undoubtedly an investor’s delight with many opportunities.
India and Egypt have, over the years, set up operations in the renewable energy sector, with experts from both countries sharing ideas to promote clean fuel and utilize abundant resources available to them.
India, on its part, has stepped up the cooperation and exchange of experience with Egypt by offering training courses and workshops to Egyptian experts to improve their chances of getting things done rightly.
With the abundant opportunities which abound in the renewable energy sectors of both India and Egypt and the government’s efforts to explore and make the best out of such opportunities, results are being recorded in Egypt already.
One such was the recent announcement by India’s leading energy transition firm, ReNew Power, to build a 220,000 t/yr renewable hydrogen plant in Egypt’s Suez Canal Economic Zone.
The company intends to invest close to $8bn over two phases, with the initial phase expected for 2023-25 and an investment of $710mn into establishing production capacity for 20,000 t/yr of renewable hydrogen and 100,000 t/yr of ammonia.
The second phase is expected to lift the overall output capacity to 220,000 t/yr of hydrogen and 1.1mn t/yr of ammonia between 2025-29, with more than $7bn investments.
Apart from the already signed agreement, there are various other opportunities in the sector brought about by Egypt’s 2035 Integrated Sustainable Energy Strategy, which builds on previous strategies and emphasizes the importance of renewable energy.
Through the plan, Egypt intends to increase the supply of electricity generated from renewable sources to 20% by 2022 and 42% by 2035, with wind providing 14 per cent, hydropower at 2 per cent and solar at 25 per cent by 2035.
These projections open up investment opportunities and part of plans by the Egyptian government to specifically attract Indian investments over time involve various concessions in certain projects like wind and solar projects, which include free land, and government-guaranteed energy purchase, among others.
Though between the two nations, India seems to be ahead in areas of renewable energy, but it still has its challenges and targets, which create opportunities in its renewable energy sector and gives it better chances for more development, just like Egypt.
Therefore, when eventually these opportunities are tapped into and suitable investments made, it is expected that Egypt will be empowered to accelerate the shift towards renewable energy to, in turn, reduce poverty and unemployment rates for its teeming population, the Egyptian economy and Africa at large.