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
  • Top deals signed at Dubai Airshow 2025

    27 November 2025

    The Dubai Airshow 2025 drew to a close on 21 November, with deals exceeding $202bn, double the $101bn secured at the 18th edition in 2023. 

    This new milestone reinforces Dubai’s position as a global aviation hub and central force shaping the future of the aviation and space industries, according to a statement from the Government of Dubai Media Office.

    The 19th edition of the event, held at Dubai World Central under the theme ‘The Future is Here’, also drew record attendance, welcoming 248,788 visitors, including industry leaders, government officials and aviation specialists from across the globe. 

    More than 1,500 exhibitors took part, with 440 participating for the first time, along with 490 military and civil delegations from 115 countries. The show also included 21 national pavilions, 98 chalets, an extra 8,000 square metres of display space, and a startup ecosystem with 120 startups and 50 investors.

    One of the most globally diverse editions to date, this year’s airshow featured the usual mega-orders, but also a surprise fleet pivot and an emerging picture of the region’s biggest players taking control of their futures by influencing the development of tomorrow’s jets and securing their supply chains. 

    Anchor customer

    UAE national carriers placed orders for 502 aircraft during the five-day event, with Emirates leading the charge. On the first day of the airshow, Emirates announced a $38bn order for 65 new Boeing 777-9 aircraft. The airline also ordered 130 GE9X engines from GE Aerospace, which power the new twin-engined planes. 

    The deal gives Boeing a boost after the 777-9’s debut was delayed to 2027 – but equally significantly, it provides strong backing for Boeing’s feasibility study to develop the 777-10, a larger variant of its 777X family, as Emirates pushes to replace its Airbus A380 fleet.

    “Emirates has been open about the fact that we are keen for manufacturers to build larger capacity aircraft, which are more efficient to operate, especially with projected air traffic growth and increasing constraints at airports,” said Sheikh Ahmed Bin Saeed Al-Maktoum, chairman and chief executive of Emirates Airline and Group.

    “We fully support Boeing’s feasibility study to develop the 777-10 and have options to convert our latest 777-9 order to the 777-10 or the 777-8.”

    Several days later, Emirates also ordered eight more A350-900 aircraft, worth $3.4bn and powered by Rolls-Royce Trent XWB84 engines, while also urging Airbus to explore a larger version of its A350-1000 wide-body.

    Emirates’ commitment to new aircraft at the Dubai Airshow 2025 is worth $41.4bn at list prices, and brings the airline’s total wide-body aircraft orders to 375, with deliveries scheduled through 2038.

    It was also announced that Emirates would deploy Starlink Wi-Fi across its entire in-service fleet, beginning with Boeing 777 aircraft in November 2025 and completing the rollout by mid-2027.

    Airbus pivot

    Flydubai also signed a memorandum of understanding (MoU) with Boeing to purchase 75 Boeing 737 MAX aircraft valued at $13bn. In one of the show’s biggest strategic shifts, a further MoU was signed with Airbus for 150 A321neo aircraft, making the airline a new Airbus customer.

    Sheikh Ahmed, also chairman and CEO of flydubai, said this addition would diversify the airline’s narrow-body fleet and “enable flydubai to play a key role in the success of Dubai World Central’s expansion plans, an airport we aim to become the largest airport in the world”.

    “We look forward to establishing a strong and enduring partnership between flydubai and Airbus,” he said. 

    Etihad Airways confirmed an order for 32 new Airbus aircraft, including freighters, marking a significant expansion of its wide-body fleet, while Gulf Air, Bahrain’s national carrier, finalised a firm order for 15 787 Dreamliners with options for three more as the carrier looks to further develop its international network. The order adds three Boeing 787s to the airline’s commitment this July and brings Gulf Air’s order book to 17 of the versatile widebody jets.

    Saudi Arabia's emerging airline, Riyadh Air, confirmed a purchase of 120 CFM LEAP-1A engines for its incoming A321neo fleet.

    Taking control

    In a clear sign that Gulf airlines are taking charge of their supply chains, Emirates and France's Safran Seats signed an MoU to bring a manufacturing and plane seat assembly factory to Dubai. The joint industrial cooperation, the first of its kind, will initially focus on Emirates’ business and economy class seats for cabin retrofit projects, with plans to expand into new aircraft in the future.

    “This agreement with Safran marks a pivotal and strategic cooperation that establishes Dubai as an aerospace manufacturing hub,” commented Sheikh Ahmed. “We're bringing world-class seat production capabilities and supply chain to our doorstep, creating highly skilled jobs, and developing capabilities to support Emirates and produce seats for export to other carriers.”

    Emirates is also securing its own engine maintenance capabilities, signing an MoU with Rolls Royce to conduct engine maintenance, repair and overhaul on its own A380 fleet at a new plant in Dubai from 2027.

    Green airline fuel

    Sustainability was a core priority at the airshow, with initiatives including the supply of sustainable aviation fuel (SAF) for participating aircraft, the use of electric and propane-powered ground support equipment in partnership with Jetex, and exhibition halls run entirely on renewable energy.

    On the sidelines of the event, Emirates and Enoc Group signed a memorandum of understanding to explore and develop joint initiatives for the supply of SAF to Emirates at its Dubai hub.

    Defence deals

    Capping the exhibition were the 36 deals signed on behalf of the Ministry of Defence and Abu Dhabi Police by the UAE’s Tawazun council – the national authority mandated to enable, regulate and sustain the UAE’s defence and security industrial ecosystem. Valued at AED25.455bn, the deals included contracts for drones, rescue gear, aircraft parts and support.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15167232/main.gif
    Marianne Makdisi
  • Prequalification begins for Riyadh King Salman Stadium

    27 November 2025

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Sports Ministry has issued a notice inviting companies to prequalify for a contract to design and build the King Salman International Stadium in Riyadh.

    The notice was issued on 26 November, with a prequalification deadline of 16 February.

    The stadium will cover an area of about 660,000 square metres (sq m) and will have a seating capacity of 92,000.

    The stadium will feature a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

    The plan also includes several sports facilities covering more than 360,000 sq m, including two training fields and fan zones; a closed sports hall; an Olympic-sized swimming pool; an athletics track; and outdoor courts for volleyball, basketball and padel.

    The new stadium will host the final of the 2034 Fifa World Cup and will serve as the Saudi national football team’s main headquarters.

    US-based architectural firm Populous is the lead architect for the stadium.

    Construction of the stadium is expected to be completed by 2029.

    The stadium will be located next to King Abdulaziz Park.

    Saudi Arabia stadium plans

    In August last year, MEED reported that Saudi Arabia plans to build 11 new stadiums to host the Fifa World Cup in 2034.

    Eight stadiums will be located in Riyadh, four in Jeddah and one each in Al-Khobar, Abha and Neom.

    An additional 10 cities will host training bases. These are Al-Baha, Jazan, Taif, Medina, Alula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.

    There are expected to be 134 training sites across the kingdom, including 61 existing facilities and 73 new training venues.

    The kingdom was officially selected to host the 2034 Fifa World Cup through an online convention of Fifa member associations at the Fifa Congress on 11 December 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15166460/main.jpg
    Yasir Iqbal
  • Morocco signs $861m deal for polysilicon plant

    27 November 2025

    Register for MEED’s 14-day trial access 

    Morocco has signed a MD8bn ($861m) investment agreement with GPM Holding to establish the country’s first polysilicon manufacturing plant in the southern province of Tan-Tan.

    GPM Holding is a US-based company and a key partner in Green Power Morocco (GPM), which specialises in the installation and maintenance of photovoltaic solar panels.

    GPM is a joint venture with UAE-based renewable energy company Amea Power.

    The planned facility will be located in the El-Ouatia industrial zone, according to the North African country’s Ministry of Investment.

    The facility will have an annual production capacity of 30,000 tonnes, with 85% earmarked for export.

    The plant is expected to generate 1,500 direct and more than 2,000 indirect jobs and strengthen Morocco’s position in renewable energy supply chains, particularly in the manufacturing of solar panel components, according to the Ministry of Investment.

    Last year, GPM completed a 34MW solar project in Hjar Nhal, south of Tangier, under a corporate power purchase agreement.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15163133/main.jpg
    Wil Crisp
  • Kuwait plans gas export pipeline

    27 November 2025

    State-owned upstream operator Kuwait Oil Company (KOC) is planning a project to develop a new sour gas export pipeline from booster station 171 (BS-171).

    According to information published by KOC, the pipeline will have a diameter of 24 inches and will run from the facility known as TP-1 to the Intermediate Slug Catcher (ISC).

    The project, which is located in the southeast of Kuwait, will include the installation of bi-directional pig traps above the new pipeline.

    A pig trap is a section of piping that allows the launch or reception of a pipeline pig, a device used to clean the pipeline.

    The chosen contractor will need to provide:

    • Valves
    • Piping
    • Fittings
    • Civil services
    • Structural services
    • Electrical and instrumentation services
    • Tie-ins
    • Testing services
    • Pre-commissioning services
    • Commissioning services

    Kuwait is trying to boost project activity in its upstream sector.

    The country’s national oil company, Kuwait Petroleum Corporation, is aiming to increase oil production capacity to 4 million barrels a day (b/d) by 2035.

    In August, Kuwait announced that it was producing 3.2 million b/d.

    Earlier this month, KOC said it was planning to spend KD1.2bn ($3.92bn) on its exploration drilling programme through 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15163075/main.jpg
    Wil Crisp
  • Emarat awards contract for Dubai airport jet fuel pipeline

    26 November 2025

    Register for MEED’s 14-day trial access 

    Dubai’s Emirates General Petroleum Corporation (Emarat) has awarded a contract for engineering services for a project to build a new jet-fuel supply pipeline to Al-Maktoum International airport in the emirate.

    The contract for end-to-end engineering design services has been won by Bilfinger Middle East, a subsidiary of Germany-headquartered Bilfinger Tebodin.

    The expansion of Al-Maktoum International airport is estimated to be valued at $35bn. The government approved the updated designs and timelines for its largest construction project in April 2024.

    In a statement, the authorities said the plan is for all operations from Dubai International airport to be transferred to Al-Maktoum International within 10 years.

    The statement added that the project will create housing demand for 1 million people around the airport.

    In September last year, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as the lead masterplanning and design consultants on the expansion of Al-Maktoum airport.

    Construction on the first phase has already begun. In May, MEED exclusively reported that DAEP had awarded a AED1bn ($272m) deal to UAE firm Binladin Contracting Group to construct the second runway at the airport.

    The enabling works on the terminal are also ongoing and are being undertaken by Abu Dhabi-based Tristar E&C.

    Construction works on the project’s first phase are expected to be completed by 2032.

    ALSO READ: Dubai selects Al-Maktoum airport substructure contractor

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15160792/main0620.jpg
    Indrajit Sen