Egypt's $10 Billion Green Gamble
Egypt has been steadily increasing its renewable energy capacity in recent years in a bid to enhance its energy security. By 2024, Egypt had a total installed capacity of renewable energy of almost 7.8 GW. While its hydropower segment has remained stable at around 2.8 GW since 2018, it has significantly expanded its wind and solar energy sectors. Egypt’s solar energy capacity increased from 35 MW in 2012 to almost 2.6 GW in 2024, with several more large-scale solar projects currently under development. The North African country has also invested significantly in enhancing energy access in rural areas by expanding its off-grid renewable capacity.
Egypt has contended with severe energy shortages in recent years, as it has fallen short on its natural gas production targets, particularly at its giant Zohr offshore gas field, which has hit its economy hard. This has led the government to pursue a more diversified energy mix to boost the country’s energy security. To do this, Egypt has opened its doors to international investment in the energy sector.
Egypt’s government aims to mobilise more than $10 billion in private investment for renewable energy, including wind and solar power production, to source 42 percent of the country’s energy from renewables by 2030. However, it is currently a long way from achieving this target, having attracted a reported $4 billion in investment to date. To encourage greater investment in its green energy sector, the government is now offering tax breaks, free land, cash rebates, and other incentives to investors. However, greater efforts to improve the country’s investment and energy policies could spur investment in the sector.
In May, Egypt’s Ministry of Electricity and Renewable Energy selected four companies to operate under the country’s newly adopted private-to-private (P2P) power agreement model. This will allow private energy producers to generate and sell electricity directly to industrial consumers. The selected projects have a combined power capacity of 400 MW and an investment total of $388 million.
Each company will now be permitted to construct its own green energy power plant to supply industry with power, while paying a transmission fee to the Egyptian Electricity Transmission Company (EETC). The awardees are Neptune Energy, AMEA Power, TAQA PV and ENARA. Egypt’s Energy Minister Mahmoud Esmat said the move aligns with the government’s Electricity Law, which aims to open the market to competition, enhance efficiency, and attract private investment.