Our first wind turbine factory moves forward with a wind farm on the side

Chinese renewables manufacturer Sany Group signed an MoU to build Egypt’s first wind turbine factory and a wind farm in the Gulf of Suez, according to a cabinet statement. The plant will have an annual production capacity of 2 GW — set to be built within two years of the final agreement — while the wind farm is expected to be connected to the national grid within 23 months.

The location and investment ticket of the factory have not been disclosed, but there are hints. We noted earlier this month that the Chinese manufacturer reportedly plans to invest over USD 300 mn to build the factory in the Suez Canal Economic Zone. The first phase of production will reportedly supply an undisclosed 1 GW wind project in the Gulf of Suez, while other key components will be imported until local lines are fully operational. The move follows initial talks in January between the Electricity Ministry and the Chinese manufacturer.

GO DEEPER- We took a deep dive into the country’s push into wind power localization earlier this year.

Getting more storage

The government is looking to invest around USD 3 bn to add 5 GWh of battery energy storage capacity to the national grid by 2027, the Arabic press reports, citing an unnamed government official. The planned additions would take operational storage capacity to around 6.2 GWh, up from about 1.2 GWh currently. Shifts in global economics have made grid-scale deployment financially viable, with the cost of utility-scale battery storage dropping 31% y-o-y to USD 117 per kWh in 2025.

Battery storage is now a pillar of our renewable energy strategy, with nearly 1 GW coming online this year. Most utility-scale solar projects under development are now being paired with battery storage systems to allow the grid to manage the intermittent nature of renewables. Egypt hit a record 9.1 GW of electricity capacity from clean energy this year. Battery storage is also a key fiscal hedge as the country currently has a EGP 500 bn annual deficit in the electricity sector because of its reliance on imported fossil fuels.

Securing the supply chain is just as important: Chinese manufacturers have established local solar manufacturing capacity in Egypt. Extending that model to battery storage (here and here) will help reduce reliance on imports and volatile supply chains.