Egypt Green Hydrogen (EGH), the project company led by Norway’s Scatec, has signed an agreement with Germany’s PtX Development Fund for a grant of €30m ($32.8m) to partially finance the project, which will have a total capex of about €500m.

The German Federal Ministry for Economic Cooperation & Development and the country’s main development bank, KfW, established the PtX Development Fund.

It is the first grant approved by the fund, which investment company KGAL manages. The fund aims to support Power-to-X projects – facilities producing derivatives from renewable energy – in developing and emerging countries.

EGH is developing an integrated green hydrogen and ammonia project in the North African country. In July, it signed a 20-year ammonia offtake agreement with Abu Dhabi-listed fertiliser producer Fertiglobe.

Fertiglobe will supply the renewable ammonia to Germany’s Hydrogen Intermediary Network Company (Hint.co) after the two companies signed an offtake agreement in August.

The signing of the offtake agreement with Hint.co followed Fertiglobe’s successful bid in the first tender by H2Global Foundation to supply green hydrogen-derived ammonia from Egypt to the EU.

Fertiglobe will receive €391m ($431m) for its proposal, in addition to securing a green ammonia offtake deal with Hint.Co, an H2Global affiliate.

Fertiglobe committed to delivering an initial up to 19,500 tonnes of renewable ammonia to Hint.Co, with the first shipments scheduled for 2027, “contingent on production and supply conditions”.

Fertiglobe is the sole winner of the first trio of tenders in the first auction round, which was funded entirely by the German government.

Investors and lenders 

The Egypt Green Hydrogen project was first announced in 2021. Scatec, Fertiglobe and the local Orascom Construction are developing the project in partnership with The Sovereign Fund of Egypt and the Egyptian Electricity Transmission Company.

At the time, Scatec and its partners agreed to develop, build, own and operate a 100MW electrolyser facility to produce renewable hydrogen to be used as feedstock for the production of renewable ammonia at Fertiglobe’s existing ammonia plant in Ain Sokhna, Egypt.

Scatec said the project will be powered by about 270MW of solar and wind power capacity and deliver approximately 13,000 tonnes of renewable hydrogen and up to 74,000 tonnes of renewable ammonia annually.

It said the next important milestones for the project are to select the electrolyser supplier and complete the project financing process.

The European Bank for Reconstruction & Development, European Investment Bank, Germany’s development finance institution and KfW subsidiary DEG, British International Investment and US International Development Finance Corporation (DFC) are providing competitive financing to support the project.

The partners expect to reach financial close in the first half of 2025.

Scatec is the lead developer and majority sponsor of Egypt Green Hydrogen, with a 52% ownership share. It will also collaborate with Orascom Construction to provide engineering, procurement and construction services.

Scatec will also provide operation and maintenance and asset management services for the project alongside key technology providers and project partners, the company said.