After the Suez Canal Economic Zone (SCZONE) signed six memoranda of understanding for investments worth US$ 10 billion for green hydrogen and green ammonia projects, Rystad Energy noted that Egypt has all the prerequisites to become a green hydrogen giant.
Currently, Egypt’s pipeline for green hydrogen projects stands at 11.62 gigawatts (GW), equivalent to over 1.57 million tonnes of green hydrogen, ranking the country in the top three green hydrogen pipelines globally, after Australia and on par with Mauritania. The projects are expected to come online before 2035.
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What is more, a series of projects announced in Egypt over the past three months has captivated foreign developers, and highlighted the country’s potential. The interest shown by international developers in Egypt is due to some favorable factors including the country’s location, natural gas infrastructure, liquefaction facilities, bunkering market, and marine ports, as well as its high solar and wind potential.
In addition, Egypt plans to release a $40-billion national hydrogen plan in the coming months, recognizing the importance of production, storage and export/import of green hydrogen and ammonia under its economic development strategy and allowing for state support and tax incentives.
The process of establishing, operating, and managing hydrogen projects has been simplified, requiring a single permit, which means less red tape. Additional incentives could include special custom points for export/import, utilities connection costs being passed on to the state, the reimbursement of 50% of land allocation costs and other non-fiscal incentives.
Egypt has all the prerequisites to become a green hydrogen giant – fantastic renewable potential, space for mega projects and construction expertise. The 40 billion in planned investments by the Egyptian government demonstrates commitment and will bring further foreign investment
says Dr Minh Khoi Le, Head of Hydrogen at Rystad Energy
This plan would be a huge development for Egypt’s green hydrogen economy. The upcoming legislation will enable green hydrogen and ammonia plans, and with the over 11-GW of projects already announced, Rystad Energy expects a huge inflow of foreign investment into the country.
Several feasibility studies and MoUs between Egyptian state entities and leading international ammonia and hydrogen market players for the development of green ammonia and green hydrogen have been reported in 2021.
These studies and preliminary agreements are expected to proceed to projects due to the commitment from the Egyptian government that should encourage additional international investors to enter the Egyptian hydrogen and ammonia market.
