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
  • Populous wins Bahrain Sports City contract

    21 April 2026

     

    US-based engineering firm Populous has won a BD5m ($13.5m) contract for the Sports City development at Sakhir in Bahrain.

    The contract was awarded by Bahrain’s Ministry of Works, Municipalities Affairs & Urban Planning.

    The scope covers pre-contract consultancy services, including finalising the masterplan and internal infrastructure, completing phase 1A design works and preparing tender documents.

    Populous is a specialist sports venue designer that formerly operated as part of HOK Group.

    The contract was first tendered in 2021, when Populous emerged as the sole bidder.

    At the time, it was reported that Sports City would include Bahrain’s largest sports stadium and a multi-purpose indoor sports arena.

    The project is expected to provide renewed impetus to Bahrain’s construction and transport sector, which has struggled in recent years, with the total value of awarded contracts falling for a third consecutive year.

    According to regional project tracker MEED Projects, about $400m-worth of contracts had been awarded in Bahrain by the end of October last year – less than half the $1.2bn recorded during the same period the previous year.

    The sector has yet to return to pre-pandemic levels. Before 2020, Bahrain consistently awarded more than $2bn in contracts annually, peaking at nearly $4bn in 2016.

    Bahrain’s construction industry is forecast to record average annual growth of 4.9% in 2026-29, supported by investments in transport infrastructure and renewable energy projects aligned with Bahrain’s Economic Vision 2030.

    Vision 2030 includes the BD11.3bn ($30bn) Strategic Projects Plan, unveiled in October 2021, encompassing 22 national infrastructure projects. It also includes plans to create five new cities by 2030: Fasht Al-Jarm, Suhaila Island, Fasht Al-Azem, Bahrain Bay and the Hawar Islands.

    Growth over the forecast period is also expected to be driven by investments under the National Renewable Energy Action Plan, which targets a 30% reduction in carbon emissions by 2035, compared to 2015 levels, and aims to achieve net-zero emissions by 2060.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16487784/main.jpg
    Yasir Iqbal
  • Entries now open for MEED Projects Awards 2026

    21 April 2026

    Enter the awards

    The MEED Projects Awards in association with Mashreq 2026 have officially opened for entries, inviting companies, developers, contractors and project teams to submit their projects for the region’s most prestigious construction awards.

    For over 15 years, the MEED Projects Awards have celebrated the Middle East and North Africa’s most ambitious and transformative projects, recognising technical excellence, innovation, sustainability and delivery impact. Past editions have highlighted landmark developments that set new benchmarks for the region’s built environment, including internationally recognised projects such as Burj Khalifa and Louvre Abu Dhabi.

    “The MEED Projects Awards are the gold standard for recognising outstanding achievements in construction across Mena, showcasing the region’s technical and design excellence while bringing the industry together to celebrate and connect over the very best projects of the year,” said Ed James, head of content and research at MEED.

    “As a long-standing partner of the MEED Projects Awards, Mashreq is proud to support a programme that is recognised for its independence, credibility and industry impact. These awards celebrate projects that set benchmarks for excellence and contribute meaningfully to the region’s development,” said Arun Mathur, executive vice-president and global head of contracting finance at Mashreq.

    Winners are chosen through a rigorous, independent judging process, led by a panel of more than 50 senior industry experts representing developers, contractors, engineers and project specialists. The awards celebrate projects across a wide range of sectors, including Building, Transport, Energy, Water, Healthcare, Education, Hospitality, Culture, Industrial, Power, Small Projects and Developments.

    Being shortlisted or winning a MEED Projects Award places a project among the region’s elite, offering regional recognition, global exposure and industry credibility.

    Submissions are now open, with full category details and entry guidelines available on the official entry platform.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16487756/main.gif
    MEED Editorial
  • Work advances on Saudi Maaden mine renewables project

    21 April 2026

     

    Local contractor Arabian Qudra Company is advancing construction works on an integrated solar photovoltaic (PV) and battery energy storage system (bess) project at the Al-Baitha bauxite mine in Saudi Arabia.

    The off-grid facility will integrate an 8MWp solar PV array with a 30MWh bess, allowing the mine to operate almost entirely on renewable energy.

    Emerge, a joint venture of Masdar and EDF Power Solutions, is developing the project, including managing financing, design, procurement, construction, operation and maintenance.

    Last August, MEED reported that Maaden Bauxite & Alumina Company (MBAC), a subsidiary of Saudi Arabian Mining Company (Maaden), had signed a 30-year power purchase agreement with Emerge to supply its Al-Baitha bauxite mine with renewable energy.

    Arabian Qudra Company was subsequently appointed as the engineering, procurement and construction (EPC) contractor, with works beginning at the start of 2026.

    The firm is a subsidiary of Abunayyan Holding Company, a privately owned Saudi industrial group.

    The project is expected to generate around 17,300MWh of electricity annually and provide a continuous 24/7 power supply. It will reduce carbon dioxide emissions by approximately 13,800 tonnes a year.

    According to projects tracker MEED Projects, construction is expected to be completed in early 2028.

    Maaden Solar 1

    Maaden is also in the early stages of developing Maaden Solar 1, potentially the world’s largest solar process heat plant. 

    MEED previously reported that US-based GlassPoint had partnered with Saudi Arabia’s Ministry of Investment as a first step towards construction of the planned $1.5bn project.

    In 2025, Spain-headquartered Cox Energy signed a collaboration agreement with the client to participate in the project. The client had been expected to invest approximately $31.1m in the first phase of the project.

    Once complete, Maaden Solar 1 will be a 1,500 megawatt-thermal (MWth) facility. A timeline for the project remains unclear, with construction not expected to begin until at least 2027.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16487404/main.jpg
    Mark Dowdall
  • Egypt to build Olympic Village project on Red Sea

    21 April 2026

    Egypt has moved to back a major new sports development on the Red Sea coast, officially assigning a 225-acre plot for a planned Olympic Village in the Red Sea Governorate.

    The site is located opposite the resort destination of El-Gouna, giving the project access to an established tourism corridor.

    The development is intended to strengthen Egypt’s ambition to become a hub for international sports tourism, with facilities designed to support large-scale regional and global championships.

    Plans include stadiums and purpose-built arenas designed to meet Olympic-level requirements, enabling the complex to accommodate multiple sports and event formats.

    To support visiting delegations and spectators, the Olympic Village is expected to include on-site hospitality facilities, including a hotel.

    The project is intended to operate as an integrated, self-contained destination capable of staging regional and international tournaments, while also leveraging the Red Sea’s year-round appeal for camps, friendlies and seasonal training programmes.

    According to UK analytics firm GlobalData, Egypt’s residential construction sector is expected to grow by 8.3% from 2026 to 2029, supported by investments in the housing sector and the government’s focus on addressing the country’s growing housing deficit amid a rising population.

    The commercial construction sector is expected to register real-term growth of 6.6% in 2026-29, supported by a rebound in the tourism and hospitality markets and an improvement in investment in office buildings and wholesale and retail trade activities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16485900/main.jpg
    Yasir Iqbal
  • Algeria launches oil and gas licensing round

    21 April 2026

    Algeria has launched a new bid round offering seven exploration blocks to international companies.

    The round was launched by the National Agency for the Valorisation of Hydrocarbon Resources (Alnaft), which manages and regulates the upstream oil and gas sector in the country.

    The blocks are located in the regions of Ouargla, Illizi, Touggourt and El-Bayadh. Both oil and gas assets are included.

    The blocks on offer are:

    • Est Bordj Omar Driss 1
    • Illizi Centre 1
    • El-M’Zaid Nord
    • El-Borma 2
    • El-Hadjira 3
    • El-Benoud Est
    • Touggourt Sud

    Technical evaluation of bids will cover exploration, development and production optimisation plans.

    All bids – except those for Est Bordj Omar Driss 1– will also be assessed against financial criteria, including the bidder’s participation rate in financing upstream operations.

    Successful bidders will access the assets through contracts with Sonatrach, either via production service agreements or participation agreements, depending on the block.

    Algeria is currently seeing an uptick in demand for its gas exports due to the disruption to exports from Qatar and the UAE in the wake of the US and Israel’s attack on Iran on 28 February.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16478927/main.png
    Wil Crisp