Sharm El-Sheikh – Egypt has pushed strongly for expanding renewable energy production to reduce greenhouse gases, improve air quality, and enhance opportunities for a gradual transition towards reliance on sustainable energy.
The energy sector witnessed a significant expansion in the establishment of several projects to generate electricity from wind and solar power, with the aim of feeding green hydrogen production projects and seawater desalination projects. Nine agreements were signed between Egypt and major alliances of international energy companies to launch new projects in the field of renewable energy with investments exceeding $83bn, on the sidelines of the United Nations Conference of the Parties (COP27) in Sharm El-Sheikh in November.
Paddy Padmanathan, Vice Chairperson and CEO of ACWA Power, expects the group to inject up to $10bn worth of investments in Egypt by 2026.
In an interview with Daily News Egypt, he added that the group will invest about $1bn in 2023, while those investments will increase by $3bn each year from 2024 to 2026.
He pointed out that these investments do not include the targeted projects in green hydrogen, and in the event that this sector is penetrated by ACWA Power, these investments will be greatly enlarged.
He said that the company’s most prominent projects in Egypt during 2022 is the Kom Ombo plant project with a production capacity of 200 megawatts of wind energy, and we are currently working to close some financial matters related to the project with investments amounting to about $300m, pointing out that the project will enter into force before the end of the year.
He stressed the company’s desire to push forward the cooperation processes with the energy sector in Egypt to promote the transition towards sustainable and clean energy and reduce emissions.
He added that there are ongoing negotiations with large banks from the public and private sectors to obtain loans and financing to finance projects in Egypt.
He pointed out that the company has signed the initial agreements for another project to produce 1.1 gigawatts of new wind energy in the Gulf of Suez region, and is working to complete the agreement early next year, expecting the investments of this project to reach more than $1bn.
He added that the project will be carried out in cooperation with the Oman Investment Authority, with a share of up to 10% of the project, while Hassan Allam Holding will own 25% and 10% in favour of Egypt’s Sovereign Fund, while the Saudi ACWA Power Company owns the remaining share, which is expected to become the larger wind farm by 2026.
He pointed out that there is a new renewable energy project to produce electricity from wind energy with a capacity of about 10 gigawatts, and we are currently working with the Egyptian government to allocate the project’s land, to start work on the project in 2024, with investments estimated at $7-8bn.
He suggested that the development process for the purpose of producing energy in this project will start in 2024, explaining that the construction work of the project does not take time, as it takes time in renewable energy projects, which is the development of the site and all the surrounding factors to adapt to the project and new energy, which is expected to take about 18 months.
In a related context, he explained that the company has started the construction work of its green hydrogen project in cooperation with the American companies “Air Products” and Saudi NEOM, which is considered one of the largest projects in this sector in the world in the city of NEOM with investments, expecting to start production by 2026.
He pointed out that the project will be owned equally by the three partners, ready to produce hydrogen and then export it to global markets to be used as a biofuel that feeds transportation and communication systems. It will also produce about 650 tonnes of green hydrogen per day and 1.2 million tonnes of green ammonia annually, with investments exceeding $6bn.
He added that all of these projects have created a strong experience that qualifies it to develop many projects in this sector, especially the green hydrogen sector in Egypt.
He expected that green hydrogen would become one of the most important sources of renewable energy in Egypt and the world, pointing out that Egypt and Saudi Arabia in particular have natural ingredients that qualify them to lead green hydrogen projects through the nature of the wind and the sun that is present most days of the year.
He stressed that the group is also interested in investing in the green hydrogen sector in Egypt during the coming period, and will start studying opportunities in this sector, especially as it serves as a new regional center for the export of renewable energy to Africa and Europe.
He explained that Egypt already has large capacities to produce electricity, but most of it depends on fossil fuels, which makes it a promising market for development towards renewable energy due to the natural sun. All we need is to install solar panels to extract energy and then sell it, he said.
He predicted that green energy would become lower in cost and price during the next five years compared to conventional energy, explaining that Egypt has a large number of countries and a promising platform to sell renewable energy and make a lot of money.
Regarding the company’s intention to acquire stakes in Egyptian companies, he said that ACWA Power is achieving rapid growth by launching new projects based on its strong experience in developing and exporting renewable and green energy, pointing out that this is the real value of growth and not the acquisition of assets.
He stressed that the company always seeks to increase its production capabilities in existing projects as one of the important elements for growth.
He added that the company aims to enter new markets during the coming period, and has already started projects in Indonesia, and is in advanced stages to start business there, and develop new projects. In addition, next year will witness the start of the company’s projects in Thailand.
He stated that the company already has assets and projects in South Africa, and plans to start new projects in Senegal in 2023 as a new market by developing a desalination plant to convert brine to usable water.
He pointed out that the company always leads alliances in most of its projects and invests part of its money in addition to attracting other investments to its side, as it will end this year with investments that will exceed $13bn, and it is expected to pump investments with the same number during the next year.
ACWA Power currently operates in 13 countries in the Middle East, Africa, Central Asia, and Southeast Asia, and has a portfolio of 67 projects for energy production and water desalination with a total investment of $66.5bn.
