SPOTLIGHT- Ahmed Zahran, CEO and co-founder of KarmSolar: The water division of solar-powered utilities firm KarmSolar this week launched Marsa Alam’s first solar-powered desalination plant, covering 100% of water consumption at Red Sea Diving Safari’s Marsa Shagra resort. There’s more where that came from: The company is expanding its solar and water projects in Marsa Alam and launching its second solar grid next month in Farafra. We sat down with CEO and co-founder Ahmed Zahran (LinkedIn) to learn more about what KarmSolar has in store and where the company sees potential for growth in our renewables sector.

KarmSolar is expanding the Marsa Alam Solar Grid: Launched last year, the Marsa Alam Solar Grid allows projects in the area — including the Marsa Shagra desalination plant — to draw energy from both the national grid and from the company’s solar stations. KarmSolar has a license to distribute some 10.9 megavolt-amperes (MVAs) through the grid and is currently using around a third of that capacity, Zahran says, adding that it’s in the process of expanding the project. “The main challenge is that energy consumption [in Marsa Alam] is increasing, which is changing the size of the solar stations that we would need to build,” he says. “That happens when you have a developing area — we’ve not yet seen a steady state [of consumption].”

A second grid project is on the way: The Farafra Solar Grid — for which KarmSolar secured EGP 83 mn in financing from our friends at HSBC — is “almost fully constructed” and set to go live in early June, Zahran told us. The company has so far signed up Juhayna and Nawa for Agricultural Investment as offtakers.

KarmSolar is focusing on distributing power across large areas: “Our strategy at the moment is securing power distribution zones,” Zahran says, noting that the company has secured exclusive power distribution rights for a 67k-acre stretch of land for the Farafra grid project. “This gets you a lot of clients all at once from different sectors because you take the responsibility for power distribution across geographical areas,” he explains. “We’ve been doing very well on that front [and] our expansion is going to be dependent on that, because it’s one of the best ways to target private offtakers.”

“In general our growth strategy always depends on private offtakers because we believe it is more sustainable than government offtakers,” Zahran adds. “It is slower, but it is more sustainable and I think more profitable as well.”

The aim is to capture the whole value chain — from generation through consumption: The company’s three branches — KarmSolar, KarmWater, and the Karm Architecture Lab (KAL) — work in tandem to provide private projects with sustainable utilities and ensure they are used efficiently. “The overall vision is that you have a vertically integrated value chain that is fueled predominantly by solar with the minimum waste and the minimum environmental footprint —- whether it comes to energy, architecture, or water desalination,” Zahran says.

That could include finding new uses for the waste products of desalination. Conventional desalination plants have two key environmental impacts: They run on large amounts of energy, and they create large amounts of saline wastewater — also known as brine — as a byproduct. KarmWater currently injects that brine back into the ground in compliance with environmental regulations. But its technical team is exploring “economic uses for the brine,” Zahran tells us — foremost among them extracting the salt to be used elsewhere. The difficulty, he says, is in making that process cost-competitive: “It’s a big challenge for all desalination plants because there are a lot of impurities and chemicals that are produced with that brine that raise the cost of salt extraction.”

Could we one day be drinking KarmWater? The utility water produced by the Marsa Shagra desalination plant is drinking quality, Zahran says — but the company is prevented from bottling it by regulations that prohibit the use of desalinated water for drinking. Zahran would like to see that change. “It’s one of the worst things that exists today in the water regulations,” he says. All drinking water “is designed in terms of taste, mineral content, everything,” he argues. “Any type of water can be used for drinking if a proper process is implemented… So there is nothing scientific or technical that prevents us from doing that.”

Finding more uses for desalinated water could also cut down on plastic and carbon emissions, Zahran points out. “The carbon footprint of the plastic bottles that we're all buying — especially when you buy them in areas that are very far away from where they're produced — is tremendous,” he says. “That’s predominantly because of the transportation,” he adds. “It’s one of the main issues that we have today in terms of carbon footprint and in terms of plastic consumption.”

KarmSolar is well-positioned to ride out current economic challenges, Zahran says, noting that “because we have an international investor, we never had a problem accessing USD.” (France’s EDF Renewables became the company’s largest shareholder when it bought an undisclosed stake through a capital increase back in 2019.) “Obviously the investment criteria in Egypt are much tougher than before,” he says. “Imports are taking a bit longer, even if you have the USD… [but] those tough conditions are proving how resilient our company is.” He points to KarmSolar’s inclusion for the second year running in the Financial Times’ list of the fastest growing companies in Africa: “Achieving that during these tough times means that our growth is actually bigger than the devaluation of the EGP. That’s something we’re quite proud of.”

And green energy is a resilient sector: The country’s power demand doubles almost every nine years, while growth in water consumption will be “even more drastic,” according to Zahran. “There will be no shortage of projects. You just need to make sure that you build the company that is capable of handling the economics right, understanding how to deal with private offtakers [and] how to scale up those types of projects.”

Your top green economy stories for the week:

  • Egypt’s long-term renewable energy targets just got more ambitious: The Egyptian government is now targeting increasing its renewable energy generation capacity to cover 60% of the country’s electricity needs by 2040.
  • One Chinese green hydrogen plant: Energy China will sign a framework agreement to build a green hydrogen plant in SCZone within two months.
  • And more Chinese investment on the way? Chinese VC Estar Capital expressedinterest in investing in our green hydrogen industries and energy sector.
Tags: