Scatec ASA’s Egypt Green Hydrogen project, in collaboration with Fertiglobe, Orascom Construction, The Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company, has achieved a significant milestone. Fertiglobe has secured a green ammonia offtake agreement with Hintco in Germany through the inaugural H2Global auction.
Consequently, Fertiglobe and Egypt Green Hydrogen have entered into a 20-year ammonia offtake agreement, signed at the Egypt-EU Investment Conference on June 29, 2024. Scatec, the lead developer and majority sponsor of Egypt Green Hydrogen with a 52% ownership stake, will provide EPC services in partnership with Orascom Construction. Additionally, Scatec will offer O&M and Asset Management services for the project, working alongside key technology providers and project partners.
The next critical steps include selecting an electrolyser supplier and completing the project financing process. This will be done with support from the European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Germany’s development finance institution and KfW subsidiary DEG, British International Investment (BII), and the US International Development Finance Corporation (DFC). These institutions are providing competitive financing to support Egypt’s first green hydrogen and ammonia project, with the partners aiming to reach financial close in the first half of 2025.
“The H2Global award represents a key milestone for the Egypt Green Hydrogen project in Ain Sokhna, Egypt. This demonstrates the competitiveness of green hydrogen and ammonia production in Egypt, driven by its abundant renewable energy resources and strategic geographical location. We are grateful for the Egyptian government´s leading role in supporting this pioneering project and we look forward to continuing to work with the relevant stakeholders to establish Egypt as a regional green hydrogen hub. With Fertiglobe securing an offtake agreement for the ammonia, Egypt Green Hydrogen will accelerate the project’s development and advance it towards financial close,” says Scatec CEO Terje Pilskog.
Ahmed El-Hoshy, Chief Executive Officer of Fertiglobe, said: “This award marks a significant milestone for Fertiglobe in advancing sustainable ammonia production and a further critical step towards FID of Egypt Green Hydrogen, expected in H1 2025. Our selection as the winning bidder in H2Global’s pilot auction underscores our leadership in supplying low-carbon products and our commitment to shaping a more sustainable future, and I appreciate the work of our incredible team to make this award possible. We are leveraging this vital program which makes our investment in sustainable ammonia economically viable, supporting critical decarbonization technology, while maintaining our disciplined growth strategy.”
Gelsomina Vigliotti, Vice President of the European Investment Bank, said: “Green hydrogen has a key role to play in the energy transition and in providing carbon-neutral solutions for industry. The first offtake agreement for hydrogen produced in Egypt, agreed at the Egypt-EU Investment Conference, represents a key step for future large-scale investment in the sector. The European Investment Bank looks forward to strengthening our cooperation with Scatec, Egyptian and international partners to mobilise investment for large-scale renewable hydrogen production in Egypt.”
Nandita Parshad, Managing Director of the EBRD’s Sustainable Infrastructure Group, said: “The signing of the offtake agreement is a key milestone for the Egypt Green Hydrogen project with our long standing clients Scatec and Orascom Construction, as well as the Sovereign Fund of Egypt and Fertiglobe. The EBRD is proud to support this pioneering project which will produce 13,000 tons of renewable hydrogen annually and demonstrate the commercial viability of renewable Hydrogen in Egypt.”
Monika Beck, Managing Director at DEG, commented: “It is part of DEG’s mission as an impact and climate financier to promote green hydrogen as a driver of green transformation. We are delighted to contribute to mobilizing investment in this milestone project in Egypt together with our esteemed client Scatec and our development finance partner institutions. We are convinced that it is essential to join forces to drive forward the green transformation, and the private sector plays a key role in this.”
Iain Macaulay, Director and Head of Project Finance in Africa at BII, said: “Egypt has the potential to be a global leader in renewable energy generation and green hydrogen production. I am delighted that BII has been able to provide project finance to back this landmark project, that will support a green and sustainable future for the country and showcase the importance of new technologies in supporting a just transition for the whole African continent.”
Waleid Gamal Eldien, Chairman of SCZONE, said: “The Egypt-EU Investment Conference 2024, marked a vital milestone on Egypt’s pathway to become a global green ammonia hub, as we celebrated the signing of a flagship offtake agreement between Fertiglobe and Egypt Green Hydrogen, the first green hydrogen plant in Africa, located at the SCZONE. As first agreement under H2Global auction, the offtake not only demonstrates the EU support to the emerging green hydrogen industry and the realization of Egypt’s potential, but additionally emphasizes Egypt’s determination to reach its vision, and showcase its comparative advantage stemming from its abundant renewables resources, industrial land, and its unique geographic location with ease of access to the world. The agreement is a testimony of Egypt’s leadership and support in mobilizing its resources to attract foreign direct investments in green projects through the facilitation provided by its stakeholders.”
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