meed-logo

line1 line2 line3
SIGN IN / REGISTER

Familiar realities threaten Egypt’s energy ambitions

7 February 2024

This package on Egypt's power sector also includes:

> Egypt to complete Gabal El Zeit wind farms sale
> Egypt president and Putin mark El Dabaa construction
> EBRD invests in 1.1GW Egypt wind farm
> Scatec in talks for Nagaa Hammadi solar project
> Team signs land deal for 1.1GW Egypt wind project
> Acwa Power moves forward with Egypt green hydrogen project

 

As of early 2024, Egypt appears to have come full circle in terms of providing electricity services to its citizens.

The country faced severe power shortages in 2013-14, which gave way to the fast-tracked construction of 14.4GW of gas-powered generation capacity in 2018. This, along with the increase in renewable energy capacity, resulted in a surplus of up to 25%, yet since late last year consumers have once again been experiencing power outages lasting up to two hours.

This time, however, the power outages – which began in the summer of 2023 and are expected to last until March this year – are not due to a capacity deficit.

The government-initiated load-shedding programme initially aimed to rein in rising electricity consumption and reduce pressure on the country's gas network.

According to the country’s Electricity & Renewable Energy Ministry, national electricity consumption reached 43,650MW in mid-July last year, up significantly from previous highs of about 31,000MW.

While the record-high consumption level is still way below the official generation installed capacity of close to 60,000MW, consumption levels of between 34,000MW and 36,000MW will require around 129-146 million cubic metres of gas and diesel a day.

Barring load-shedding, any increase in consumption beyond 36,000MW will require a commensurate increase in gas and diesel, which is understood to be beyond the government’s capacity to procure.

Crucially, the other side of the electricity rationing initiative has to do with the need to save gas for exports, to boost the government’s dollar reserves in the face of the ongoing currency crisis.

Frustration over the power cuts and their impact on job productivity and the overall economy has been growing over the past few months.

There are no magic pills, however, and any solution needs to start with broader economic and energy sector reforms, to improve the prospects of attracting investments, notes Jessica Obeid, a partner at Dubai-headquartered New Energy Consult.

“Reducing reliance on gas for domestic power generation and increasing renewable energy plus storage are critical, not only to reduce the shortage gap but also to improve energy security, since one gas field, Zohr, feeds almost half of the domestic needs,” she explains. “In the immediate term, doubling down on energy-efficient measures and demand-side management is needed.”

It is an awkward and unprecedented situation for the North African state, which has espoused a clear intention – and started executing relevant projects – to establish itself as a regional energy hub, exporting natural gas and electricity to neighbouring countries, as well as to Europe.

“The government has signaled its prioritisation of exports, although no economy can grow nor become a hub while dealing with energy shortages,” Obeid says.

“The Egyptian government has showcased that the focus is on economic revenues from gas exports, even if that is at the expense of the living conditions of the citizens. However, Egypt cannot realise its hefty regional ambitions without efficient measures and reforms to mend the high domestic reliance on gas, and the lower gas production prospects.”

Another expert on Egypt’s energy policies notes that the country is in a tough spot and “needs ideas to move ahead from this”.

In addition to its energy hub plans, Egypt could look into other opportunities such as setting up repair hubs for ships, as well as education centres to cater to the needs of those hubs, the expert suggests, while noting – as Obeid does – the need for wide-ranging reforms, including improving the rule of law and developing alternative sources of wealth and income.

Important milestones

Six months of electricity rationing makes it easy to overlook the cumulative – though, in hindsight, insufficient – steps that Egypt has taken to avoid falling once again into the power outage trap.

Egypt has one of the highest renewable energy penetration rates in relation to overall installed capacity in the Middle East and North Africa region. While this is commendable, it has only served to highlight the weakness of the country's electricity grid when it comes to handling intermittent renewable energy sources such as solar and wind.

Nonetheless, the country is continuing to build additional renewable energy capacity, including hydropower, and with the help of Russian financing, it has also embarked on the construction of its first nuclear power plant. These projects could replace the ageing oil and gas fleet, lowering the sector's emissions while also supporting the country's energy diversification and security agendas.

Egypt aims to be a global green hydrogen and ammonia hub, and signed preliminary agreements for over a dozen such schemes when it hosted the UN global climate summit, Cop27, in November 2022.

If these projects reach the execution stage, not only do they have the potential to advance the country’s ambition to be a global green energy hub, they will also help to attract much-needed dollars to fund its economic diversification plans.

However, the ability to implement reforms and develop bankable projects lies at the heart of the deployment of any technology in Egypt, points out Obeid.

“Egypt’s existing experience in hydrogen, and being part of that trade market, along with abundant renewable energy resources, a vast land [area] and the country’s geographic location are enablers of a hydrogen market," she says.

“Yet, Egypt’s economic and financial challenges have led to higher interest rates, lower lending capacity and higher costs for system components, and these need to be addressed first.”

Never say die 

Despite a bleak short- to medium-term outlook, some projects are moving ahead in Egypt.

The European Bank for Reconstruction & Development will invest $75m in equity in the Netherlands-based subsidiary of Egypt's Hassan Allam Utilities, which along with Saudi utility developer Acwa Power is co-developing a wind independent power producer scheme in the country's Gulf of Suez and Gabal El Zeit area.

Acwa Power also reached financial close for a 200MW solar photovoltaic facility in Kom Ombo in August last year, two years after the project was put on hold due to rising solar panel and freight costs.

Even the 505MW Amunet wind farm project, located in Ras Ghareb in the Gulf of Suez on the Red Sea coast, is moving ahead. A consortium of the UAE-based Amea Power and Japan’s Sumitomo Corporation last year enlisted Shanghai-headquartered Envision Energy to supply wind turbines for the project.

According to the New & Renewable Energy Authority (NREA), solar and wind projects with a total capacity of close to 3.5GW were under development in Egypt as of the end of 2023, while schemes totalling 39GW are in the planning stage. 

Hydrogen and ammonia

In November, Abu Dhabi-based Fertiglobe delivered what might have been the world's first internationally certified renewable ammonia from its pilot electrolyser site in Egypt to India. The ammonia will be used to produce near-zero-emissions synthetic soda ash – a key ingredient in laundry powder – for Unilever.

Several planned integrated green hydrogen projects in Egypt are in the pre-front-end engineering and design (pre-feed) stage.

One of the green ammonia projects is being developed by Germany's DAI Infrastruktur. To be located in East Port Said, the Ra green ammonia project will have a total production capacity of 2 million tonnes a year (mtpa) of green ammonia, of which 1.65 mtpa is expected to be based purely on renewable energy resources when complete.

DAI has signed a preliminary agreement with Siemens Energy, which plans to supply electrolysers, auxiliary plant systems and critical equipment making up the hydrogen island of the project.

DAI and UK-headquartered Freepan Holding are also understood to have signed an offtake agreement for the ammonia produced at the Ra plant. The 10-year offtake agreement covers 800,000 tonnes a year of ammonia, with the first green ammonia delivery to Freepan expected in 2028.

A similarly sized project is being developed by Amea Power in the coastal town of Ain Sokhna in the Suez governorate. The company is in the process of appointing pre-feed consultants and contractors that will undertake geotechnical, topography and environmental studies for the project.

Detailed studies are also under way for interconnections transporting clean energy from Egypt to Europe, as the latter seeks alternatives to Russian energy exports.

Stakeholders in these projects will continue to monitor the Egyptian government's management of its energy policies at home and abroad over the next few months as they decide the next steps in their investment plans.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11489597/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Firms submit Jebel Ali sewage PPP prequalifications

    24 July 2026

     

    Dubai Municipality received statements of qualification on 23 July from firms interested in delivering phase three of the Jebel Ali sewage treatment plant (STP) expansion project.

    Known as DS150/3, the project will be delivered under a public-private partnership (PPP) model on a design, build, finance, own, operate and transfer basis.

    The project involves the development of a new water resource recovery facility with an ultimate treatment capacity of up to 1 million cubic metres a day (cm/d).

    It is being procured through Dubai Municipality’s sewerage and recycled water projects department and will be delivered via a two-stage operational approach over a 30-year concession period.

    It is understood that the following firms are among those likely to qualify for the project:

    • Acciona (Spain)
    • Alkhorayef (Saudi Arabia)
    • Besix (Belgium)
    • Etihad WE (UAE)
    • GS Inima (Spain)
    • Metito (UAE)
    • Miahona (Saudi Arabia) 
    • Samsung E&A (South Korea)
    • Saur (France)
    • Suez (France)
    • Taqa Water Solutions (UAE)
    • Veolia (France)

    The municipality issued a request for qualifications notice in May with an intial bid submission deadline of 18 June. UK-headquartered Deloitte is acting as financial adviser, Aecom is the project's technical adviser and CMS is the legal adviser.

    Dubai Municipality said the project will also include additional land uses and community-focused amenities as part of broader sustainability and urban integration objectives.

    Phase one and two expansion

    On 9 July, firms submitted bids for an engineering, procurement and construction contract covering the expansion of the Jebel Ali STP phases one and two.

    Located on a 670-hectare site in Jebel Ali, the original wastewater facility has a treatment capacity of about 675,000 cm/d, following the completion of phase two in 2019, combining approximately 300,000 cm/d from phase one and 375,000 cm/d from phase two.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cm/d, with the expansion estimated to cost $300m.

    UK-headquartered KPMG and UAE-based Tribe Infrastructure are serving as financial advisers on the project.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17735401/main.jpg
    Mark Dowdall
  • Contractors submit interest for Riyadh Expo substructure

    24 July 2026

     

    Contractors have submitted expressions of interest on 23 July for a contract to deliver the early works and substructure works for several assets at the Expo 2030 Riyadh site.

    Expo 2030 Riyadh Company (ERC) is tasked with delivering the Expo 2030 Riyadh venue. Saudi sovereign wealth vehicle, the Public Investment Fund, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for the event.

    The assets include the Icon; the convention centre; and thematic pavilions, including the Culture of Wisdom, Place & Planet and Adaptation & Innovation pavilions.

    The Icon will be located at the entrance of the Expo 2030 Riyadh site, within the Collaboration Precinct.

    The structure will be connected to the metro station and will serve as a gateway to the event.

    It will be 66 metres tall and will comprise an observation platform, food and beverage (F&B) outlets and other features.

    The convention centre will cover about 22,000 square metres. It will be the first point of arrival for visitors to the expo.

    The Culture of Wisdom pavilion will be a 25-metre-tall building that will feature exhibition galleries, innovation laboratories and conference and learning spaces.

    The Place & Planet building will also be 25 metres tall, and will include indoor and outdoor exhibition spaces, F&B and retail facilities and support areas.

    The Adaptation & Innovation pavilion will be located within the Loop of Nations precinct and will comprise a 29-metre-tall building.

    Construction progress

    The tendering of the pavilion structures followed progress on the site’s infrastructure development works.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners. That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems, and electric vehicle charging stations.

    The overall infrastructure works – covering the construction of main utilities and civil works at Expo 2030 Riyadh – are split into three packages:

    • Lot 1 covers the main utilities corridor;
    • Lot 2 includes the northern cluster of the Nature Corridor;
    • Lot 3 comprises the southern cluster of the Nature Corridor. 

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739044/main.jpg
    Yasir Iqbal
  • Oil price rises above $100 a barrel after Red Sea attacks

    24 July 2026

    Oil prices rose to their highest level in nearly two months on 23 July after the latest escalation in the US-Iran conflict threatened severe new disruptions to global energy supplies.

    Global benchmark Brent crude closed 7% higher, at $100.69 a barrel on 23 July. Earlier in the trading day, it rose as high as $102 a barrel. That is its highest level in eight weeks, since the end of May.

    Brent was trading at over $100 a barrel in the early hours of 24 July, but later pared gains to settle around $99.63 a barrel as of 11am Gulf Standard Time (GST).

    The surge in the Brent price came after Iran-backed Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea following their announcement of a naval blockade on Saudi Arabia.

    It appeared to be the first time since the regional war began that attacks on oil tankers and other commercial ships had extended beyond the Strait of Hormuz, opening up a new front in the volatile conflict.

    The Houthi threat is unsettling to oil markets because millions of barrels a day pass through the Bab El-Mandeb Strait to reach global markets.

    ALSO READ: Opec+ holds the line on unwinding of production cuts

    About 12%-15% of global maritime trade, worth more than $1tn, transits the waterway every year.

    It has also served as an alternative to the Strait of Hormuz, where traffic remains largely at a standstill, with ship crossings falling to single digits on 21 July.

    Since the start of July, oil prices have risen about 35%. Those prices are more than 60% higher than at the start of the year. This has erased much of the progress made in bringing prices down after the US and Iran signed a memorandum of understanding in mid-June.

    The interim peace deal has now collapsed, with US President Donald Trump threatening on 22 July to blow up an Iranian bridge or power plant for every vessel Tehran attacks.

    This was followed by the Houthi claim to have hit two tankers in the Red Sea.

    The UK’s Maritime Trade Office reported a tanker “struck by an unknown projectile” north of the Bab El-Mandeb Strait, and state-run Saudi Press Agency (Spa) reported that a vessel named Encelia was set ablaze by an attack while it was sailing overnight in the Red Sea, citing an unidentified source from the General Authority of Transport. Spa did not mention the other vessel, which is understood to be called Layla.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739553/main4051.jpg
    Indrajit Sen
  • Qiddiya tenders Dragon Ball theme park package

    24 July 2026

     

    Qiddiya Investment Company (QIC) has tendered a contract to undertake the back-of-house works on the Dragon Ball theme park in Qiddiya, Saudi Arabia.

    The scope covers the construction of plant rooms, facilities management buildings, workshops, storage warehouses and central processing kitchens.

    It also includes a monorail service depot, a fire station, parking, utilities and other associated infrastructure.

    The bid submission deadline is 13 September.

    The Dragon Ball theme park will cover more than 500,000 square metres and will have seven themed zones inspired by the Japanese media franchise, including Kame House, Capsule Corporation and Beerus’ Planet.

    The park will offer more than 30 rides with five main attractions, including a rollercoaster that passes through a 70-metre landmark based on the series’ wish-granting dragon Shenron. 

    The development will also include themed hotels.

    In September 2024, US-based firm Falcon’s Creative Group announced that it is undertaking the masterplan and attraction design and is the creative lead for the theme park.

    QIC formally launched the Dragon Ball theme park in March 2024.

    The announcement came after QIC signed an agreement with Japanese firm Toei Animation, the producer of the Dragon Ball anime series.

    The Dragon Ball theme park is one of several major projects within the wider Qiddiya development. Other projects include an e-games arena, Prince Mohammed Bin Salman Stadium, a horse racing venue, a performing arts centre, the Speed Park and Six Flags theme parks and Aquarabia waterpark.

    The project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom. According to UK analytics firm GlobalData, leisure tourism in Saudi Arabia has experienced significant growth in recent years.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17738622/main.jpg
    Yasir Iqbal
  • Saudi Arabia appoints developer for hybrid power plant

    24 July 2026

     

    Saudi Arabia-based Lamar Holding has signed a contract to develop a hybrid power plant at the Empty Quarter (Rub Al-Khali) land port in Saudi Arabia, according to a source.

    The public-private partnership (PPP) project aims to reduce diesel fuel use with renewable energy and ensure a long-term power supply at the Empty Quarter land port. It includes the construction of 15MW of total hybrid installed capacity, installation of a 7 megawatt-peak solar photovoltaic system and eight 1MW internal combustion engines.

    In March, MEED exclusively reported that Lamar had been given preferred bidder status and was in advanced discussions with Saudi Arabia’s Zakat, Tax & Customs Authority (Zatca) for the contract.

    MEED understands that the proposed plant will have the capacity to produce 25 gigawatt-hours of electricity annually. It will be implemented under a design, build, finance, operate, maintain and transfer contract model for 25 years, excluding the construction period.

    US/India-based Synergy Consulting is acting as financial advisor to Lamar on the project. Egyptian firm Eternal Consultation Engineering Services is acting as the technical support consultant and Dubai-headquartered Aktech is the technical consultant for the project.

    Lamar Holding and Dubai’s SirajPower submitted bids for the Empty Quarter hybrid power plant project in July 2025, as previously reported by MEED.

    Zatca, in collaboration with the National Centre for Privatisation & PPP, had previously prequalified the following four companies to bid for the contract in October 2024:

    • Alfanar Company (Saudi Arabia)
    • Lamar Holding (Saudi Arabia)
    • Olayan Energy (Saudi Arabia) / Enerwhere Sustainable Energy (UAE)
    • Siraj Power for Renewable Energy (UAE)

    Prior to that, in July 2024, 12 Saudi companies and local branches of international companies, along with 11 overseas-based companies, submitted statements of qualifications for the contract.

    In addition to building and operating the power plant, the project scope includes ensuring the facility operates to defined requirements and output specifications. It also involves managing power generation and the connection to the Zatca interface point for the entire project term.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17733327/main.jpg
    Mark Dowdall