France’s Engie has appetite to invest more in Egypt as rolling blackouts put a greater emphasis on renewables: Egypt is currently grappling with a system of rolling blackouts to manage a lack of electricity supply, which is increasingly becoming a source of concern for both citizens and the government. The blackouts are a pressing issue that highlights the importance of the country’s push for clean energy solutions.

We sat down with Engie’s North Africa regional director Loïc Jaegert-Huber to discuss our clean energy landscape o n the sidelines of the Hydrogen Egypt Summit last week. Loïc Jaegert-Huber(Linkedin) discussed the French renewables player’s appetite to invest here, the industry incentives he wants to see, and the challenges Egypt needs to address.

Egypt currently constitutes 60% of Engie’s investments in the North Africa region, Jaegert-Huber told Enterprise. Engie in partnership with Orascom Construction’s (OC) and Toyota Tsusho signed a land allocation agreement in August with the Electricity Ministry for a 852 sq-km plot in Sohag for a planned 3 GW wind farm. The consortium also recently broke ground on their 500 MW wind project in Ras Ghareb and are currently operating a 262.5 MW wind farm in Ras Ghareb that went live in 2019. Engie have also partnered with Hassan Allam Holding and are among the prequalified 17 consortiums that will bid for renewables-powered desalination projects offered up by the Sovereign Fund of Egypt’s (SFE).

But Jaegert-Huber told us that they’re only getting starte d: Engie has so far invested USD 1 bn in various renewable projects in Egypt and they are considering another USD 3-5 bn of investments in renewables and desalination projects. Engie is also eyeing up the possibility of pushing into hydrogen here, Jaegert-Huber told Enterprise.

Medium projects for Egypt, large projects for Morocco and Oman: “Our partners Hassan Allam, Masdar, and Infinity have signed agreements for 10 GW of renewables with the Egyptian government,” said Jaegert-Huber. However, Engie’s strategy primarily revolves around investing in smaller medium-sized projects here and larger scale projects in Morocco and Oman, Jaegert-Huber added. As an example, Jaegert-Huber explained that in Morocco the emphasis shifts towards more substantial projects centered around ammonia and hydrogen exports.

We asked Jaegert-Huber to tell us about some of the incentives that Engie would like to see to push our green energy ecosystem forward:

#1- Regulatory frameworks: A regulatory framework with specific regulations for hydrogen, said Jaegert-Huber, adding that creating certificates for green hydrogen is particularly important for exporting.

#2- Prompt approvals: “It’s also important to accelerate the issuance of approvals for key agreements like land allocations required for renewables and desalination projects,” said Jaegert-Huber .

#3- Local Industrial ecosystems : Jaegert-Huber emphasized the need to build industrial ecosystems locally, which not only help with component availability, but also reduce our dependence on imports. He also advocated for the localization of skills for technicians and engineers as well as localizing the production of equipment.

#4- Financial incentives from the government to encourage greater participation by the private sector in the transition to clean energy, said Jaegert-Huber, adding that they could be used for conducting feasibility and pre-feasibility studies. Tax incentives are also a good incentive for companies engaged in renewables because they not only accelerate private sector investment, but also the adoption of clean energy solutions.

But Jaegert-Huber seems to think that things have been going in the right direction recently : “ We are particularly excited about the new industrial incentives introduced last August to stimulate foreign direct investment. It is thanks to this type of measure that a more stable and transparent business environment will be created, which will accelerate the development of the Egyptian economy,” Jaegert-Huber told us .

As ambitious as the clean energy industry is in its pursuit of a more sustainable future, it is not without its challenges. The transition from fossil fuels to renewable sources involves complex technological advancements, substantial financial investments, infrastructure upgrades, and regulatory adjustments, which can pose significant obstacles. Jaegert-Huber talked to us about some of these challenges from a local market perspective.

Jaegert-Huber highlighted to us the issue of administrative delays complicating our green energy industry: The involvement of multiple ministries at different stages of projects from bidding all the way to execution can sometimes lead to detrimental delays, according to Jaegert-Huber. “We are engaging with several governmental entities including the ministries of electricity, housing, and finance for the desalination projects we are bidding for. These consultations require time and commitment, but I am confident that the collective work will bear great results,” Jaegert-Huber explained.

Payment delays stemming from the FX crisis also pose a serious challenge to our clean energy industry: “Delays in payments from the Egyptian Electricity Transmission Company (EETC), one of Engie’s clients, have also been a concern,” said Jaegert-Huber, highlighting the importance of financial stability for the company's operations. Such delays are attributed to the ongoing FX crunch the country has been experiencing, he explained, adding that “we hope it's exceptional because it's a question of financial stability for the company.”

Your top green economy stories for the week:

  • A 50% expansion at Benban + a new wind farm: Ministers approved an offer submitted by UAE-based AMEA Power to expand the production capacity of the solar park in Aswan by 1 GW and to set up a new 500-MW wind farm in Ras Ghareb.
  • IFC is helping BdC go green with the support of the German gov’t:The International Finance Corporation (IFC) will partner with Banque du Caire (BdC) to develop a climate finance strategy to invest in green projects.
  • Infinity to charge BMW EVs locally: Global Auto Group, BMW’s agent and importer in Egypt, signed an agreement with our friends at Infinity to charge electric BMWs at its charging stations.
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