The road to our very ambitious renewables target: During his latest post-cabinet meeting presser, Prime Minister Moustafa Madbouly unveiled the state’s latest renewables target — adding 28 GW of renewable energy to the country’s energy mix over the next five to seven years.

The short-term goal: The government wants to see 3-4 GW-worth of renewable energyprojects go live and start feeding the national grid by next summer to fill the energy supply gap.

This push is part of a broader plan to secure the country’s energy needs amid declining natural gas production and expanding electricity interconnection projects for export to neighboring countries.

IN THE PIPELINE-

We already have a number of renewable projects in the pipeline that will help us inch closer towards our goal of adding 28 GW of green energy to our energy mix. The New and Renewable Energy Authority (NREA) has allocated land plots spanning 42.6k km for investors looking to set up renewable energy projects, according to a cabinet statement yesterday.

#1- A 10 GW wind farm courtesy of ACWA: Saudi renewable energy developer ACWA Power is working to build a 10-GW wind farm in Egypt after signing an MoU with the NREA and the Egyptian Electricity Transmission Company.

#2- And another 10 GW goliath in the works: Infinity Power, Hassan Allam Utilities, and the UAE’s Masdar will set up a USD 11 bn, 10 GW wind farm in Sohag that is set to be one of the largest wind farms globally and the largest in Africa.

These two wind farms would be the world’s joint second largest in the world: The two planned 10 GW wind farms are set to be some of the biggest in the world, second only to the China’s Gansu project with a planned capacity of 20 GW. For comparison, India’s largest wind farm ⁠— Jaisalmer ⁠— has a capacity of 1.6 GW, while the 1.55 GW Alta Wind Energy Center in California is the biggest in the US. Currently, Egypt’s largest wind farm is the 545-MW facility in Zafarana.

#3- A 5 GW wind project: Scatec plans to invest USD 5.7 bn into developing a 5 GW wind farm.

#4- And a 3 GW wind farm: Local construction giant Orascom Construction and its consortium with a subsidiary of France’s Engie, Kahrabel, and Japan’s Eurus Energy is setting up a 3 GW wind project.

And there’s more to come: There are a number of new projects in the works, including a 500MW solar power plant by the UAE’s Al Nowais in Kom Ombo and a 500 MW wind farm in Ras Gharib. Al Nowait expects to complete the two projects within 2-3 years at a cost of USD 1 bn.

All together that makes our ambitious goal reachable: A government source told Enterprise that achieving the planned renewables target is within reach, thanks to the scale of agreements and mega-projects signed.

Big targets. Big investments: The government is looking to attract USD 34 bn of renewable investments through 2026-2027, our source said. The government wants to push its green investments to 75% of its total investment spending by 2030 and have its green economy contribute no less than 5% to its GDP.

It’s not just Egypt where energy investments are on the up: Global energy investment is expected to exceed USD 3tn for the first time this year, with USD 2 tn dedicated to clean energy technologies and infrastructure, according to the International Energy Agency.

To make the plan reality: Players in the renewable energy sector are asking for a number of incentives to help set up and expand their renewable projects and the government has started listening to them.

A whole lot of incentives to help sweeten the pot: The source also pointed to the many incentives introduced by the government with the aim of encouraging future investments in the field. That includes scraping integration fees for solar plants that produce less than 10 MW of energy per year in 2023 — the fee for larger production projects has been set at EGP 0.30 per KW. This comes on top of custom breaks of 5% for solar panels and financial facilities from banks and financial institutions, supported by the Electricity Ministry.

And more to come: The source emphasized that the government is working to introduce more incentives to promote further renewable investments that includes facilitating and simplifying procedures.

P2P projects and soft loans in the pipeline: The Madbouly government plans to expand peer-to-peer (P2P) renewable projects and offer soft loans to SMEs to help them transition to clean energy, our source added.

Special incentives for green investments: Investment Minister Hassan El Khatib announced that the ministry will work to facilitate the transition to clean energy in the coming period, offering special incentives for companies looking to set up or expand green activities. The Investment Ministry will also launch initiatives to cover the roofs of plants in freezone with solar cells as a way to reel in export-oriented investments.

We even got word of a new initiative announced only yesterday: To persuade investors to sign up for projects, land is being distributed in exchange for only 2% of the power produced by these projects, according to a cabinet statement out yesterday. On top of this, the government is reducing customs on components and spare parts used for renewable projects by 3.0 percentage points to only 2.0% and reducing VAT to 5%, down from 14%.

Your top green economy stories for the week:

  • The EGPC looks to solar energy to help run its oil production wells: The Egyptian General Petroleum Corporation (EGPC) is doubling down on using solar energy instead of diesel for the operation of oil production wells
  • NoorNation receives funding from Saudi VC firm: Local renewable energy firm NoorNation has received an undisclosed investment from Saudi firm KBW ventures.
  • Progress on the USD 120 mn WtE plant in Abu Rawash: The initial designs for the USD 120 mn waste-to-energy plan in Abu Rawash being carried out by a consortium led by Renergy Egypt have been completed. (Statement)
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