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
  • Egypt prepares to tender five water treatment plants

    25 May 2026

    Egypt is preparing to tender five seawater desalination and industrial wastewater treatment plants under its public-private partnership (PPP) programme.

    The projects will be offered to local and international investors through competitive PPP tenders, Atter Hannoura, head of the PPP unit at the Finance Ministry, has told a local Arabic news channel.

    The first of these involves a plant in the Suez Canal Economic Zone, which will be launched “immediately after the Eid Al-Adha holiday”, Hannoura said.

    In January 2025, MEED exclusively reported that SCZone Istithmar had invited interested firms to prequalify to bid for a contract to develop a seawater desalination plant in the Suez Canal Economic Zone.

    SCZOne Istithmar is wholly owned by the General Authority for Suez Canal Economic Zone.

    The Finance Ministry’s PPP Central Unit, along with the European Bank for Reconstruction & Development, is supporting SCZone Isthithmar in the project’s tender proceedings.

    The opportunity entails a long-term water-purchase agreement to design, finance, build, operate, maintain and transfer the plant’s ownership.

    It was previously reported that this planned seawater desalination plant will have a capacity of 250,000 cubic metres a day (cm/d). 

    Hannoura added that the government is in negotiations with several companies, including Saudi Arabia-based Acwa, regarding large-scale desalination projects.

    Additionally, the government plans to tender four industrial wastewater treatment plants, with the first two projects expected to be launched “within 45 days”.

    One of these will be located in the Amreya industrial area in Alexandria, while the other will be in the Abu Rawash area in Giza, Hannoura said. Details of the other projects were not disclosed.

    Alexandria wastewater treatment plant

    The Authority for Potable Water and Wastewater is planning to build a wastewater treatment plant in eastern Alexandria.

    The $150m facility will have a water treatment capacity of 300,000 cm/d.

    In June 2025, Egypt’s government approved a financing and grant agreement for the project, with financing from the French Development Agency amounting to €68m and a grant of €2m.

    Expression of interest documents were previously submitted in September 2024.

    The main contract for this plant had been expected to be released in June.

    Wastewater upgrades

    Separately, the Construction Authority for Potable Water & Wastewater retendered the phase four expansion of the Abu Rawash wastewater treatment plant in Giza Governorate in January.

    The $157m scheme will be developed under a design, build, operate and maintain contract.

    The plant will have a treatment capacity of 400,000 cm/d, rising to peak flows of 520,000 cm/d. The authority issued the initial main contract tender last August. 

    It is unconfirmed whether this has moved beyond the bidding stage.

    Egypt currently produces between 1.5 million cm/d and 2 million cm/d of desalinated water. The country aims to increase capacity to between 8 million cm/d and 9 million cm/d by 2050.

    In March, Egypt’s cabinet approved a $1.2m grant agreement with the European Investment Bank to support wastewater treatment upgrades in Alexandria and Damietta.

    Part of the funding will support plans to expand the Hanovil wastewater treatment plant in Alexandria Governorate.

    The project will add 50,000 cm/d of treatment capacity in two phases within the plant’s existing footprint. Once completed, the facility will reach a total capacity of 100,000 cm/d.

    The grant will also support expansion works at the Kafr El-Battikh wastewater treatment plant in Damietta Governorate.

    The facility currently receives more than 7,000 cm/d of wastewater, while its treatment capacity is 3,000 cm/d.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16980726/main.jpg
    Mark Dowdall
  • Momentum builds for Syrian projects

    25 May 2026

     

    Support from the US, as well as the closure of the Strait of Hormuz, has increased expectations about the development of infrastructure projects in Syria.

    On 22 May, the US published guides to investing in Syria, funded by the US Department of State, that pointed investors towards 590 planned projects in the country.

    The permanent removal of US sanctions in December last year, combined with fallout from the closure and disruption to shipping through the Strait of Hormuz, has boosted interest in planned projects in the country.

    Shipping through the Strait of Hormuz has been disrupted since the US and Israel attacked Iran on 28 February.

    The route normally transports about 11 million barrels a day of oil and around 20% of the world’s liquefied natural gas, as well as a range of other key materials and consumer goods.

    The disruption to shipping through the strait has left nations in the Middle East scrambling to find new routes for imports and exports – and Syria plays a role in many of these new plans.

    This has bolstered the country’s plans to become a regional trade hub.

    Energy corridors

    Already, Iraq is moving a large volume of oil by truck across the country to export it from Syria’s Mediterranean ports, such as Latakia or Tartous.

    In April, Iraq’s state-owned oil marketing company, Somo, said it had awarded contracts to supply about 650,000 metric tonnes of fuel oil per month for overland trucking across Syria.

    On top of this, Iraq is currently looking into reestablishing a pipeline route that transported oil from Kirkuk to the port of Baniyas in Syria.

    The pipeline originally went into operation in April 1952.

    During the 2003 invasion of Iraq, the pipeline was damaged by US air strikes and has remained out of operation since then.

    There have been repeated attempts to either refurbish the existing pipeline or build a new one along the same route, but none has been successful.

    In December 2007, Syria and Iraq agreed to rehabilitate the pipeline. The pipeline was to be reconstructed by Stroytransgaz, a subsidiary of Russia’s Gazprom.

    However, Stroytransgaz failed to start the rehabilitation, and the contract was nullified in April 2009.

    The disruption to shipping through the Strait of Hormuz has added a new urgency to the project to reestablish pipeline flows from Iraq to Baniyas.

    Syria could also play a role in plans for a pipeline to transport gas from Qatar to Europe via Syria and Turkiye.

    The country could additionally form part of plans to rehabilitate and expand the Arab Gas Pipeline.

    The pipeline connects Egypt, Jordan, Syria and Lebanon, although the Lebanese section is not currently operational.

    Trade routes

    Beyond oil and gas, Syria is emerging as a key part of other plans for new trade routes.

    Earlier this month, Syria’s Transport Minister Yarub Badr said the country was seeking to restore its role as a regional transit corridor linking Europe and the Gulf by reviving cross-border trucking and rehabilitating railway connections with neighbouring countries.

    He said the overland corridor between the Turkish and Jordanian borders handled between 100,000 and 115,000 trucks annually in both directions before 2011. Freight rail services also operated between Tartous port and Iraq’s Umm Qasr port via Baghdad in 2009, he added.

    He said Syria was coordinating with Turkiye, Jordan and Saudi Arabia to simplify customs and border-crossing procedures and facilitate freight movement.

    Railway rehabilitation is expected to take longer due to extensive infrastructure damage and the suspension of cross-border rail links over the past decade.

    Badr said Syria is working with the World Bank to secure grants ranging between $65m and $200m to support railway rehabilitation and restore Syria’s role as a regional transit route linking Turkiye, Syria, Jordan and Iraq.

    Earlier this month, Syria’s state-owned railway company, the General Establishment for Syrian Railways, and the operator of Syria’s Latakia International Container Terminal signed a memorandum of understanding to coordinate container traffic between the Mediterranean port of Latakia and inland freight hubs.

    The framework covers feasibility studies for moving containers by rail from Latakia to dry ports in Adra, Hasiya and Aleppo.

    The feasibility studies are expected to take four months to complete.

    Tartous port

    Also this month, executives from the UAE’s DP World and Syria’s General Authority for Borders and Customs (GABC) met to discuss accelerating the development of Syria’s Port of Tartous.

    Essa Kazim, chairman of DP World, met with Qutaiba Ahmed Badawi, chairman of GABC, to discuss opportunities to enhance infrastructure and logistics efficiency, ensuring the Port of Tartous is well-equipped to handle the anticipated rise in trade and cargo volume.

    DP World’s plans to develop the Port of Tartous form part of a 30-year concession agreement signed in July 2025 with the Syrian government.

    Under the agreement, DP World committed to invest $800m to upgrade infrastructure, expand capacity, and introduce modern cargo-handling and advanced digital systems.

    DP World has said that, by fast-tracking the development of the Port of Tartous, it aims to boost its operational efficiency and capacity to handle diverse cargo types, including general cargo, containers, breakbulk and roll-on/roll-off traffic.

    Rizwan Soomar, DP World’s chief executive and managing director for Central Asia, the Levant and Egypt, said: “The Port of Tartous development marks a defining moment in Syria’s journey of economic recovery and modernisation of its trade infrastructure. We are proud to contribute to this vital phase of growth.”

    Located on Syria’s Mediterranean coast, the Port of Tartus is the country’s second-largest port and a key maritime gateway to trade routes across Europe, the Levant and North Africa.

    Beyond the port itself, DP World is exploring other opportunities to develop infrastructure in Syria with local stakeholders. These include logistics zones, inland freight hubs and transit corridors.

    US interest

    US-based companies are also showing significant interest in participating in new projects in the country.

    On 19 May, a delegation from the Houston-headquartered engineering company KBR travelled to Damascus to discuss road networks and infrastructure projects in Syria.

    During one meeting, Syria’s transport minister outlined strategic projects currently underway, including north-south and east-west corridor projects, the Damascus-Aleppo highway and railway initiatives.

    Badr said that companies were needed to update economic and technical studies for some projects.

    While Syria and the US both have bold ambitions to expand Syria into a regional trade and logistics hub, the poor state of the country’s infrastructure is likely to be a key challenge.

    It is likely that billions of dollars will need to be invested to rehabilitate the country so that its capacity to transport goods returns to levels seen prior to the civil war that began in March 2011.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16975219/main.jpg
    Wil Crisp
  • Alec confirms Sphere Abu Dhabi contract award

    25 May 2026

    Alec Holdings has confirmed that its subsidiary Alec Engineering & Contracting has received a letter of award for the construction contract for the $1.7bn Sphere Abu Dhabi project.

    MEED had previously reported that Alec was the selected contractor and had been working on the project during the pre-construction phase. The construction is due to be completed in the third quarter of the financial year 2029.

    Abu Dhabi’s Department of Culture & Tourism (DCT Abu Dhabi) and US-based Sphere Entertainment announced earlier in May that they have selected Yas Island as the location for the project.

    The venue will be built on a plot between Yas Mall and SeaWorld Abu Dhabi, close to Yas Island’s theme parks and attractions. The project will be the first Sphere venue outside the US. It is expected to echo the scale of Sphere Las Vegas, with a capacity of up to 20,000 depending on configuration.

    DCT and Sphere Entertainment finalised an agreement last year for the construction, development and operation of the Sphere entertainment venue in Abu Dhabi. According to the agreement, Sphere Entertainment granted DCT the exclusive rights to build and operate the Sphere Abu Dhabi entertainment venue.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16973522/main.jpg
    Colin Foreman
  • Consultant wins Jeddah metro design

    22 May 2026

     

    French engineering firm Egis has been appointed to undertake the preliminary design consultancy for the Jeddah Metro Blue Line project.

    The project client, Jeddah Development Authority, issued the tender in early January, when MEED exclusively reported that Saudi Arabia had restarted plans to build the Jeddah Metro.

    Engineering consulting firms submitted bids in April, as MEED reported.

    The Blue Line will run from King Abdulaziz International airport and connect to the Haramain high-speed railway station.

    The line will be 35 kilometres (km) long and will include 15 stations.

    Project history

    Plans for the Jeddah Metro were first publicly floated in the early 2010s and were formally packaged into a wider Jeddah public transport programme around 2013-14.

    In 2014, French engineering firm Systra was appointed to complete preliminary engineering for the Jeddah Metro, as MEED reported at the time.

    In the same year, US-based engineering firm Aecom was awarded a SR276m ($74m) contract to provide pre-programme management consultancy services.

    Under its 18-month contract, Aecom was expected to provide staff to support preliminary planning and design work for various phases of the metro project.

    This was followed by the appointment of UK-based architectural firm Foster + Partners in 2015 to design the metro stations.

    The project then stalled as government spending priorities were reset and major capital programmes were reviewed following the fall in oil prices in 2015, with the metro’s scope, cost and delivery model coming under reassessment.

    Early concept designs envisaged a multi-line network integrated with buses and, later, other city-wide mobility upgrades.

    Route details

    According to Jeddah Transport Company’s website, the scheme comprises 81 stations and 197 trains serving more than 161km. The network will have four lines:

    • Orange Line: a 44.8km line running along Al-Madinah Road and Old Makkah Road, with 29 stops including one at Obhur Bridge
    • Blue Line: a 35km line running from King Abdulaziz International airport to the Haramain high-speed railway station, with 15 stations
    • Green Line: a 17km line running through the city centre, from the downtown area to the Haramain railway station, with nine stops
    • Red Line: A 59.7km line running from King Abdullah Stadium north to Old Makkah Street through King Abdulaziz Road and King Abdullah Road, with 25 stops

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16949416/main.jpg
    Yasir Iqbal
  • Expo Riyadh tenders Saudi Arabia pavilion

    22 May 2026

     

    Expo 2030 Riyadh Company (ERC), tasked with delivering the Expo 2030 Riyadh venue, has tendered a contract to build the Saudi Arabia pavilion at the site.

    The tender was issued on 19 May, with a bid submission deadline of 26 August.

    The pavilion is a major asset located within the KSA District on the eastern side of the Expo 2030 Riyadh masterplan, within the Loop of Nations district.

    The tendering of the pavilion structure follows swift 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 covers 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 covers about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communication 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 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 various landmarks within Riyadh.

    The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, launched ERC – a wholly owned subsidiary – in June last year to build and operate facilities for Expo 2030.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16949696/main.jpg
    Yasir Iqbal