Gov’t rejected VW’s request for incentives beyond the standard package

The government has rejected Volkswagen’s (VW) requests for incentives beyond the standard package under the Automotive Industry Development Program (AIDP), Al Mal reports, citing sources familiar with the matter. Talks over a local manufacturing project are ongoing, with both sides discussing investment size, output, local-content ratio, export potential, and how the German automaker could use existing manufacturing capacity in Egypt. No final investment ticket, production target, or timeline has been agreed upon.

BACKGROUND- The group was preparing to begin contract manufacturing through the Egyptian German Automotive Company earlier this year, before potentially moving toward an integrated East Port Said plant. The AIDP framework — the rulebook that the government is now asking Volkswagen to work within — links incentives to production volumes, local content, exports, and investment.

A green hydrogen boost

The African Development Bank (AfDB) is providing a USD 3.55 mn reimbursable grant to Project Ra, a green ammonia project in East Port Said targeting European and global markets, according to a press release. Ra is one of four projects across Egypt, Morocco, Namibia, and South Africa selected under the AfDB’s Africa Green Hydrogen program, representing a combined USD 23 bn in estimated investments. The grant, which is pending AfDB board sign-off, covers advisory work aimed at bringing projects to the final investment decision stage and attracting private capital and FDI into African hydrogen infrastructure.

REMEMBER- DAI Infrastruktur, the German company sponsoring Ra, pre-sold 1.4 mtpa — or 70% — of the plant’s output by mid-2023, including 400k tpa to Greece’s Naftomar, 800k tpa to UK-based Freepan Holdings, and 200k tpa to an undisclosed buyer, against a 2 mtpa design capacity. Its first ammonia shipment is scheduled for 1Q 2028.

GO DEEPER- Egypt has a substantial pipeline of green hydrogen MoUs and a target to capture 5-8% of the global market by 2040, but converting non-binding ink into financial close remains a challenge. To dive deeper, check out this Going Green where we break down the OECD’s recommended policy stack to move green hydrogen projects past the paperwork stage.

Vamos, Energos Winter

The Energos Winter has left Egypt for repairs in Spain, Asharq Business reports, citing an unnamed government official. The fire-damaged FSRU is expected to return to Damietta and resume operations by end-October. Until then, Egypt is relying on four operating FSRUs — three at Ain Sokhna and one at Aqaba — with combined regasification capacity of around 2.75 bcf / d.

REMEMBER- The vessel’s repair destination was still up in the air earlier this month, when the government was weighing either a roughly six-week repair in Egypt or sending it to Turkey for around a month. The Energos Winter, which was supplying around 450 mmcf / d to the national grid, has been offline since the late-July drone strike at Damietta Port.

More on our radar

• The Financial Regulatory Authority expanded the Regional Center for Sustainable Finance and Carbon Markets’ mandate to include research, consulting, database production, professional certification, and carbon-project capacity building. (Statement)