Energy transition

Egypt, UAE Seal Major Onshore Wind Farm Deal at COP27

Egypt bags its newest wind project with UAE to feed future electrical flows regionally and eventually to Europe.

Wind turbines at sunset near Luxor, Egypt.

The UAE and Egypt have signed a memorandum of understanding (MOU) to develop one of the world’s largest onshore wind projects in Egypt as Cairo continues to build its renewable energy capacity toward realizing its ambition to become the regional electricity hub in the eastern Mediterranean.

Sultan al-Jaber, chairman of the UAE’s renewable energy firm, Masdar, signed the deal alongside Masdar’s Infinity Power joint venture with Egypt’s renewable energy developer, Infinity, and Hassan Allam Utilities, according to the UAE’s state news agency WAM.

The signing took place on 8 November on the sidelines of COP27 in Egypt’s Red Sea resort town of Sharm El-Sheikh in the presence of both countries’ presidents.

Al-Jaber is the UAE's special climate envoy, its industry minister, and group CEO of state energy company ADNOC.

Masdar's CEO Mohamed Jameel al-Ramahi called the deal “our biggest project yet.” Masdar’s current renewable energy assets portfolio is valued at $20 billion and boasts an electrical capacity exceeding 15 GW.

The 10-GW farm is expected to produce 47,790 GWh of clean energy annually and offset 23.8 million tons of CO2 emissions, the equivalent of around 9% of Egypt's current CO2 emissions.

"The UAE and Masdar will continue to support Egypt's net-zero goals and we will endeavor to take forward the gains made here at COP27 as the UAE prepares to host COP28 next year," al-Jaber said in the statement on WAM.

When completed, the wind farm would become part of Egypt's Green Corridor initiative, a grid dedicated to renewable energy projects that is aimed at ensuring renewable energy makes up 42% of the country's energy mix by 2035.

The wind project is expected to save Egypt an estimated $5 billion in annual natural gas costs. Egypt's total installed power capacity was around 59.5 GW in 2019/2020, WAM quoted the country's renewable energy authority as saying.

Green Hydrogen Now in The Wind

In April, Masdar and Hassan Allam Utilities signed two MOUs with Egyptian state-backed organizations to cooperate on the development of 4 GW green hydrogen production plants in the Suez Canal Economic Zone and on the coast of the Mediterranean Sea.

Phase one calls for development of a green hydrogen manufacturing facility to become operational by 2026, with a production capacity of 100,000 tons of e-methanol annually for bunkering in the Suez Canal, according to Masdar. E-menthanol is produced by combining biogenic CO2 with hydrogen created by water electrolysis.

The electrolyzer facilities could be extended to up to 4 GW by 2030 to produce 2.3 million tons of green ammonia for export as well as supply green hydrogen locally for industrial use.

Meanwhile, Egypt’s Infinity Group is itself on track to becoming Africa’s largest renewable energy company after it announced in July that it had partnered with the African Finance Corporation to acquire Lekela Power, Africa’s largest independent power producer.

Lekela has a portfolio of windpower projects in Egypt, Senegal, and South Africa and a pipeline of developing projects across the continent. Infinity said it expected the deal to close in late 2022.

Meanwhile, in October 2021, Egypt clinched a deal with Greece to build the EU-backed EuroAfrica Interconnector, a subsea cable to transmit renewable energy from North Africa to Europe via Cyprus. That same month Egypt also awarded contracts together with Saudi Arabia to build a link with the Kingdom.

Cairo has already constructed interconnectors with Jordan (250 MW capacity with expectations of an increase to 450–500 MW); with Sudan (80 MW capacity expected to grow to 300 MW); and with Libya (200 MW), according to the US Commerce Department, International Trade Administration’s (ITA) country survey for Egypt, updated in August 2022.

Egypt has set goals of increasing the supply of electricity generated from renewable sources to 20% by 2022 and 42% by 2035, with wind providing 14%, hydropower 1.98%, photovoltaic 21.3%, wind 14%, concentrating solar power 5.52%, and conventional energy sources 57.33% by 2035, the ITA reported.

But a revised plan under government consideration in August could result in the setting of more-aggressive targets, pushing the share of renewables in Egypt’s energy mix to 33% by 2025, 48% by 2030, 55% by 2035, and 61% by 2040, with the private sector delivering most of the capacity, according to the US government study.