The industrial sector is shifting to solar energy amid rising energy prices: Transport and Industry Minister Kamel El Wazir has directed firms intending to establish large factories to build wind or solar power stations to fuel them, as part of a larger move to lessen reliance on traditional energy networks. The switch should help rationalize energy consumption, ensure consistent and sustainable energy sources for factories, and reduce emissions from a sector that ranks as Egypt’s third-largest producer of pollution.

Big changes are taking place in the industrial sector: Sector players told EnterpriseAM that the sector is undergoing a fundamental shift, which has manifested in the establishment of new power plants and more firms considering a partial shift to solar energy. Several manufacturers told us that their electricity bills last month were extremely high, with some exceeding EGP 100k — a situation that has prompted many firms to look into establishing solar power stations to help reduce production costs and remain competitive in export markets.

The gov’t has long championed the switch to solar: The government’s Egypt-PV project contributed to the installation of 121 power stations across the industrial, commercial, tourism, residential, and public building sectors in 15 governorates nationwide, with a total capacity of 9.8 MWs. The project — which received an Energy Institute award for being one of the best projects for reducing greenhouse gas emissions in 2020 — was funded by the UN and the Global Environment Facility (GEF), and helped households and SMEs across the country switch to solar.

Transitioning to solar can make your project a higher priority: While the decision to transition to solar is not mandatory — especially for industries with low energy consumption — it can help speed up the process of receiving a license for a given project, a government source told us.

WHO’S MAKING THE SWITCH?

Some large producers are already on top of it: A few areas in the Robbiki Leather City in Badr City have already begun operating using solar power, and there are plans to establish multiple solar power plants in the Tenth of Ramadan industrial zone, which relies heavily on electricity and gas for manufacturing and keeping factory lights on, a source from the Tenth of Ramadan Investors Association told EnterpriseAM. Marble producers are also planning to establish a large solar station in the desert hinterland of Shaq El Tebaan — the largest marble and granite industrial cluster in the country — expected to supply the entire area, Chamber of Building Materials Industries (CBMI) deputy head Sayed Abaza previously told EnterpriseAM.

New industrial zones — especially ones located in Upper Egypt — include desert hinterlands that can be used for various logistical and energy services, a source told EnterpriseAM. Samsung is considering implementing solar power in its industrial complex in Beni Suef, while Toshiba is considering doing the same for its new industrial complex in Upper Egypt, sources told us. Siemens has also announced plans to establish a solar plant in the Ain Sokhna industrial zone expected to power 90% of the center’s needs.

A who’s who of companies want in on solar: A meeting of the Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) recently saw a number of firms obtain licenses to establish solar power plants for industrial activities, including Canex Aluminum, Helwan for Food Production, and Globe Spinning and Dyeing, based on data seen by EnterpriseAM. Fresh Appliances has established solar power plants worth EGP 200 mn, saving them EGP 40 mn annually, Cairo Solar managing director Hatem Tawfik told EnterpriseAM. Other companies such as brick manufacturing firm Rockal, Halwani Bros, Tredco El Sayad Group, Toshiba, and El Marakby Steel have adopted similar initiatives.

There’s support on offer for SMEs, too: The Industry Ministry is also exploring the possibility of expanding the provision of soft loans ranging from EGP 100k to 10 mn for small- and medium-sized projects to accelerate the shift to renewable energy in Egypt’s factories, a source from the Industry Ministry tells us.

BY THE NUMBERS-

More demand means lower solar plant production costs: As solar plants’ capacity goes up, costs drop — particularly when capacity exceeds 100 KW, Tawfik told us. He noted that the rising demand for solar energy in the industrial sector is largely down to a significant decrease in solar panel prices in China, which has seen solar panel prices fall from USD 0.59 to just USD 0.09 currently. A 1 MW solar power system can save a factory between EGP 9-16 mn on its electricity bill, he continued, noting that smaller, more widespread stations are more efficient at capturing solar with minimal loss.

Using solar energy can also guarantee a quick recovery on your investment: Establishing solar power stations for industrial use can see you realize a return on your investment in three years, Tawfik said. USD 100 spent on solar energy can be fully recouped within three years with additional savings of USD 30 per year.

There’s more work for the gov’t to do: The government will need to adopt a number of tax, customs, and financial incentives to help the sector transition away from traditional energy, Tawfik said, pointing to a memorandum submitted to the government through the Sustainable Energy Division at the Cairo Chamber of Commerce as part of the national Shamsak ya Masr initiative, which focuses on securing customs exemptions for solar panels, similar to those available for green hydrogen projects.

Your top industrial development stories for the week:

  • China’s CSCEC is looking into setting up an industrial zone in New Alamein. The zone is aimed to focus on manufacturing EVs, renewable energy components, and construction materials in the area, with the many projects to develop the North Coast, which will require more construction materials.
  • Turkish auto and construction delegations to visit Egypt: Turkey’s AutomotiveManufacturers Association and the Turkish Contractors Association will visit Egypt in 1Q 2025 following an invitation from Investment Minister Hassan El Khatib.
  • Siraj Lightning to manufacture Honeywell Lighting products locally: Egypt’s SirajLighting signed a USD 15 mn agreement with electric lighting equipment manufacturer Vesra — a Honeywell authorized licensee — to produce Honeywell lighting products in its factory in the the Suez Canal Economic Zone (SCZone).
  • USD 360 mn worth of Turkish investments? One Turkish ready-made garments maker is looking to invest USD 160 mn to set up a factory in the Tenth of Ramadan and another is looking to set up a USD 200 mn furniture factory in Damietta’s freezone.
  • An unnamed Chinese company is looking to set up a USD 360 mn tire factory in the Suez Canal Economic Zone (SCZone) in partnership with the state-owned Arab Organization for Industrialization (AOI).
  • Austrian wood panels manufacturer Kronospan wants to partner with Nag Hamady Fiberboard Company to set up a 150k sqm production line in the Egyptian company’s existing factory to produce MDF. The company also confirmed plans to set up a USD 50 mn wood panel factory to produce chipboard, MDF, and floorboards, among other products announced in 2023 is still in the study phase.
  • Egyptian food giant Edita signed a toll manufacturing agreement with Misr Food Additives, according to a disclosure (pdf). The agreement will enable Edita to expand their offerings in the biscuit sector, specifically for their flagship brand Oniro.
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