By Nibal Zgheib
The European Bank for Reconstruction and Development (EBRD) is supporting the decarbonisation and Paris alignment of Egypt’s economy with a US$ 80 million loan to Egypt Green to develop the country’s first green hydrogen facility.
Egypt Green is owned, built and operated by Fertiglobe, one of the largest seaborne exporters of combined urea and ammonia, Scatec ASA, a Norway-based integrated independent power producer, Orascom Construction, one of the largest engineering and construction groups in the Middle East and North Africa, and the Sovereign Fund of Egypt, a state-owned, privately managed investment fund positioning itself as the partner of choice in Egypt.
The EBRD’s financing will be used to acquire and construct a 100 MW electrolyser facility to be powered by renewable energy. When fully developed, the facility will deliver up to 15,000 tonnes of green hydrogen annually. This, in turn, will be used as an input for the production of green ammonia to be sold on the Egyptian and international markets.
Ammonia production is energy intensive and responsible for around 1.8 per cent of global carbon dioxide (CO2) emissions. Reducing the amount of CO2 produced during the manufacturing process is, therefore, key to helping the world achieve its net zero targets by 2050. Using green hydrogen, produced by means of renewable energy, is seen as the critical step in getting there.
This landmark project is a first step towards the decarbonisation of the ammonia sector in Egypt. It will serve as a benchmark for future green hydrogen projects and showcase that hydrogen and ammonia production can be decarbonised in Africa’s largest ammonia-producing country, where current production is natural gas based, generating significant carbon emissions.
At full capacity, the facility’s green hydrogen production will save more than 130,000 tonnes of CO2 emissions per year.
“We are proud to support the first, truly innovative, green hydrogen facility in Egypt,” says Sustainable Infrastructure Managing Director at the EBRD, Nandita Parshad. “It will contribute to the decarbonisation of Egypt’s carbon-intensive industries and will demonstrate Egypt’s commitment to a thriving low-carbon hydrogen sector. It also demonstrates the commercial viability of green hydrogen production, paving the way for the decarbonisation of fertiliser and other hard-to-abate industries in our economies.”
Chief Financial Officer of Fertiglobe, Andrew Tait said: “We are pleased to have the support of the EBRD, which enables Fertiglobe and our partners to bring the first phase of this project to life. This also underpins our future efforts to scale up towards the 100 MW electrolyser capacity, as we work on reaching the Final Investment Decision for the next phase of the project.”
CFO of Orascom Construction, Reham ElBeltagy said: “Our partnership with the EBRD spans several sectors that have a direct positive impact on infrastructure and industrial development. This project, in particular, paves the way for the creation of a hydrogen industry for the first time in Egypt. Such new projects require strong financial partners, and we are pleased to collaborate once again with the EBRD on this sustainable project.”
CEO of the TSFE Infrastructure & Utilities Subfund, Karim Badr said: “This loan is a testament from lenders to Egypt’s attractiveness as a green hydrogen hub. We are pleased to have received the first green hydrogen financing from the EBRD following our collaboration on the development of Egypt’s green hydrogen strategy.”
CFO of Scatec ASA, Mikkel Tørud says: “This is testimony to the long-term partnership Scatec has with the EBRD. We are pleased to have strong financial partners in this green hydrogen project in Egypt. We see a massive green hydrogen demand driven by strong policy support globally, and Africa is perfectly positioned to take advantage of its low-cost renewables and strategic position.”
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the Bank has invested more than €10 billion in 154 projects across the country.
