Private players move faster than public infrastructure to power the desert via off-grid renewables

For decades, development in Egypt has been constrained by the limits of the national grid. If a project was not close to the Nile or within reach of state transmission lines, it rarely moved forward. But a new class of off-grid private utilities is beginning to rewrite the rules of desert economics, wagering that the future of Egyptian industry and agriculture lies in the country’s hinterlands — powered by localized green energy.

Instead of waiting for grid expansions or state-backed megaprojects, these players are leapfrogging the national grid by deploying decentralized systems that generate water and renewable power at the point of consumption. The model is reshaping desert economics, lowering upfront costs, and opening new pockets of commercially viable development.

One local company pushing the off-grid frontier model is Engazaat, which recently undertook a strategic pivot from family-run contractor to regional green infrastructure platform, targeting a USD 250 mn development pipeline over five years, co-founder and CEO Muhammad El Demerdash said at a presser attended by EnterpriseAM this week.

El Demerdash explained that limited grid coverage has long constrained desert development. To bridge the gap, the firm adopted an integrated Water-Energy-Food Nexus model, creating self-contained green development hubs to support agri-industrial production.

But Engazaat is just one data point in a broader pattern. From KarmSolar ’s Marsa Alam solar grid to the government’s NWFE program, momentum is building around decentralized, green, and integrated utilities that produce water and power where they are needed, rather than transporting them across long distances.

Why this matters

Traditionally, reclaiming desert land required massive public spending on transmission lines, pumping stations, and grid extensions. Off-grid utilities allow private developers to bypass these constraints, making projects bankable without waiting for state infrastructure or having to rely on more polluting power sources.

We are seeing the death of the buy-and-build model. Companies like Engazaat and KarmSolar are offering zero-capex solutions, where the clients pay consumption-linked tariffs for water and power to pay for the infrastructure. What was once a multi-mn USD capital hurdle is becoming a predictable operating expense.

The approach eases pressure on the national grid as it grapples with load-shedding and price volatility. Islanding — the ability to operate independently of the grid — is emerging as a strategic necessity for export-oriented agriculture and high-value manufacturing, especially if firms are looking for green credentials to counter carbon tariff fears.

How Engazaat’s decentralized model works

The company is shifting toward decentralized, off-grid systems that integrate water, energy, and food production. A digital backbone allows remote monitoring of consumption, emissions, and production chains, improving transparency for end consumers. Projects are benchmarked against digital climate KPIs and audited by third parties to ensure international compliance and certify carbon credits.

Financing is structured around zero-capex and pay-as-you-go models, with Engazaat funding assets in exchange for long-term, consumption-linked tariffs. Lower interest rates and a more stable EGP have revived momentum for sustainable infrastructure investment and local-currency financing.

Tangible operational savings: The model delivers measurable efficiency gains, particularly in agriculture. By leveraging Egypt’s high solar irradiation, Engazaat supplies power at a lower cost than diesel or grid electricity. El Demerdash said solar energy now accounts for up to 30% of consumption at some client factories, while water reuse technologies hit 96% efficiency — cutting costs and boosting energy independence.

Engazaat’s portfolio includes the solar- and groundwater-powered SAVE-1 project on 2.2k feddans in Dakhla Oasis and the SAVE-2 desalination plant in Maghara, part of the 1.5 mn-feddan project. The firm is also collaborating with Nestlé on low-carbon food production and rolling out solar projects in the SCZone and Ain Sokhna.

Engazaat is also delivering solar solutions for Majid Al Futtaim malls in Egypt and Lebanon and working with e-finance and the National Bank of Egypt on financing schemes for small-scale farmers to support modern irrigation.

While Egypt remains its core market, Engazaat is expanding operations in the UAE and Lebanon, with plans to enter West Africa after 2026, El Demerdash noted. The firm is exploring PPPs with the Egyptian government in desalination and agri-infrastructure. To fund growth over the next five years, Engazaat is weighing a minority IPO on the EGX or a regional exchange, or bringing in a strategic partner.

The firm is nearing the validation stage for its first certified carbon credit issuance, viewing credit sales as a core component of project returns. Significant water savings and clean energy reliance are boosting the firm’s appeal to ESG investors, reflecting a broader shift among private infrastructure players — from project contractors to long-term climate investment platforms.