Norwegian project from a Chinese factory, Egypt invests USD 1.8 billion in renewables

Reuters, citing Egyptian state television, reports that Egypt has signed renewable energy agreements worth 1.8 billion dollars. The agreements were signed with two players in the renewable energy market, Norwegian company Scatec and Chinese firm Sungrow.

According to a statement from the Egyptian cabinet, Scatec will build a solar power plant in Minya in the north of the country. The plant is expected to have an installed capacity of 1.7 GW, and the project includes a battery system with a total capacity of 4 GWh .

Sungrow, meanwhile, is to build a battery manufacturing plant in the Suez Canal Special Economic Zone. Some of the factory's output is expected to be supplied for Scatec's project.

According to available information, the agreements also include power purchase agreements. Specifically, these cover 1.95 GW of solar capacity and 3.8 GWh of battery energy storage systems (BESS). According to a statement from Scatec, the company will also develop two additional BESS projects to ensure grid stability.

In terms of installed capacity and storage capacity, this is set to be the largest solar and BESS installation in Africa, as well as the largest investment in Scatec's history.

Egypt and its plans

Egypt's energy sector is based primarily on natural gas, which, according to the IEA, still accounts for around three-quarters of the country's electricity generation. The Egyptian government also plans for 42% of its electricity to come from renewable sources by 2030. In 2022, the figure was approximately 12%, according to the EIA.

The future of these plans is uncertain, however, as the government itself acknowledges that it would ideally need international financial assistance to gradually reduce its dependence on gas. At the same time, it is now showing a willingness to invest in projects using its own resources as well.

At the signing ceremony, the Egyptian prime minister said that developing and relocating the manufacture of renewable energy technologies to the country is key to strengthening energy security and delivering the green transition. He added that investments of this kind demonstrate international companies' confidence in Egypt's investment climate.

The Egyptian government has further plans. According to media reports last year, several solar panel factories are expected to begin operating in the first quarter of this year. The government is also seeking to attract “more sustainable investment”; for example, support for electric vehicle manufacturing is greater than for conventional cars with internal combustion engines.