{"id":562845,"date":"2021-06-08T04:00:13","date_gmt":"2021-06-08T04:00:13","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/enterprise-talks-to-french-ambassador-stephane-romatet-on-building-a-greener-egypt\/"},"modified":"2021-06-08T04:00:13","modified_gmt":"2021-06-08T04:00:13","slug":"enterprise-talks-to-french-ambassador-stephane-romatet-on-building-a-greener-egypt","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/enterprise-talks-to-french-ambassador-stephane-romatet-on-building-a-greener-egypt\/","title":{"rendered":"Enterprise talks to: French Ambassador St\u00e9phane Romatet on building a greener Egypt"},"content":{"rendered":"

<\/a> Enterprise talks to: French Ambassador St\u00e9phane Romatet on building a greener Egypt:<\/strong> French investment in Egypt has grown from an estimated EUR 3 bn in 2017 to EUR 5 bn today. Major renewables investments include Engie\u2019s 250 MW Ras Ghareb wind farm; EDF\u2019s 130 MW Benban solar plants; Total Eren\u2019s two 63 MW PV Benban solar projects; and Artelia\u2019s 2.4 GW hydroelectric project. The French Agency for Development<\/a> (AFD) has provided EUR 800 mn in loans to Egypt\u2019s renewable energy projects since 2007, and nearly EUR 400 mn in climate financing through credit lines to the banking sector since 2015.<\/p>\n

We sat down with St\u00e9phane Romatet, French Ambassador to Egypt,<\/strong> to discuss France\u2019s support for Egypt\u2019s green energy plans. The discussion touched on France\u2019s ambitions to partner with Egypt on green hydrogen, where French companies are eyeing more renewables investment in Egypt, and the need to resolve the feed-in tariff issue.<\/p>\n

Edited excerpts from our conversation:<\/strong><\/p>\n

Current French investment in Egypt is an estimated EUR 5 bn. Renewables comprise 10% of that mix. <\/strong>Energy investments are growing from big players like Total Eren<\/a>, EDF<\/a> and Engie<\/a>, says Romatet. SMEs like Mascara<\/a> and Naldeo<\/a> are also eyeing the sector. Current French investment in renewable energy in Egypt is nearly EUR 500 mn.<\/p>\n

Increasing overall investment is a priority:<\/strong> France wants to expand its investment in Egypt. Strategic sectors include infrastructure, transportation and energy. \u201cWe want more French companies to invest in Egypt. The AFD could support them by providing financing,\u201d Romatet says.<\/p>\n

Renewables could make up 20% of French investment in Egypt within five years: <\/strong>\u201cTargeting 20% is reasonable given our planned projects in solar energy, wind farms, and biomass \u2014 and the long-term promise of hydrogen,\u201d he says.<\/p>\n

Hydrogen is strategically important for France, and Egypt is its major international partner: <\/strong>Hydrogen is key to France\u2019s post-covid recovery plan. EUR 7 bn is earmarked for France\u2019s green hydrogen<\/a> development \u2014 hydrogen made without fossil fuels \u2014 by 2030, says Romatet. Egypt is the only country France is currently eyeing international cooperation on hydrogen with, Romatet believes.<\/p>\n

France is helping Egypt plan its national hydrogen strategy: <\/strong>French and Egyptian specialists, including regulators and electricity ministry representatives, are developing Egypt\u2019s national hydrogen strategy, says Romatet. France is ready to pay for consultants to help with this process. It\u2019s outlined the capacity of its energy companies in hydrogen, says Romatet, and will develop terms of reference with the Egyptian government for Egypt\u2019s national hydrogen strategy, due to launch by 2030.<\/p>\n

French companies including Engie, EDF and Voltalia are prioritizing investment in Egypt\u2019s renewables<\/strong>, says Romatet. Engie is in talks with the electricity ministry to finalize the power purchasing agreement<\/a> for its 500 MW BOO wind farm<\/a> in the Gulf of Suez. \u201cThey want to finalize everything this year, to launch the project in 2022,\u201d Romatet says. EDF Renewables is preparing for the next round of auctions for new solar projects. And Voltalia<\/a> is eyeing new solar and wind investment.<\/p>\n

Even with the focus on Ras Ghareb, solar is attractive: <\/strong>Current heightened interest in wind projects is partly because industry leader Engie terms the Red Sea one of the best global locations for wind energy, Romatet says. But land availability, a big factor in solar investments, has also slowed down recently. When new land becomes available, we can expect to see more solar investment, he adds.<\/p>\n

How helpful are renewable investments, given Egypt\u2019s electricity glut? Well, surplus electricity is good for Egypt\u2019s energy hub ambitions.<\/strong> Egypt\u2019s current 40% overcapacity opens up possibilities for export, while leaving wide enough margins to absorb growing domestic demand, says Romatet. \u201cEgypt will play an important role in meeting Europe\u2019s energy security needs.\u201d<\/p>\n

But much depends on its ability to export \u2014 which is still oil and gas reliant: <\/strong>Egypt\u2019s oil and gas export capacity is clear, Romatet notes. But geopolitical maritime boundary issues with Cyprus and Turkey also complicate this export process, he adds.<\/p>\n

Egypt needs time to absorb additional capacity from renewable projects: <\/strong>New phases of renewable energy projects, including Ras Ghareb 2 and Kom Ombo, must be planned with domestic demand and export possibilities in mind. \u201cThe elements must be balanced. Why would investors or the Egyptian authorities invest in capacity that isn\u2019t currently needed?\u201d Renewable projects also take time to reach maturity, he adds. \u201cThere isn\u2019t a slow down, but we\u2019re seeing absorption of this first phase of projects.\u201d<\/p>\n

Fixing the FiT is key to driving investment,<\/strong> says Romatet. The Egyptian authorities are working hard to fix the feed-in tariff \u2014 especially for solar \u2014 at the correct price. Ensuring it\u2019s low enough to be affordable but substantial enough to attract foreign investors is a balancing act, but resolving it is crucial, he says.<\/p>\n

While issues around transmission and storage also need addressing:<\/strong> Transmission and storage capacity can also be constraints for French renewable energy companies. \u201cTransmission is a monopoly, and storage is technologically challenging. Addressing storage capacity will be one of the key elements of the hydrogen strategy.\u201d Still, some solutions are underway, like Voltalia developing storage solutions for solar energy.<\/p>\n

Where else could French green investment grow? Energy efficiency and transition:<\/strong> EDF and Schneider<\/a> will continue to focus on heightening the efficiency of their distribution networks, says Romatet. Schneider could be eyeing more electricity distribution command centers. French consultancy firms like Artelia<\/a> and Naldeo want to increase their energy transition work \u2014 helping companies move towards carbon neutrality.<\/p>\n

And possibly desalination: <\/strong>Both Suez<\/a> and Engie are interested in the government\u2019s desalination program. Mascara, which offers decentralized solar-power desalination technology, is also eyeing the market, says Romatet. Artelia is already involved in three desalination projects in New Mansoura, Galala, and Port Said. Desalination must be connected to hydrogen production because hydrogen is water intensive, he adds.<\/p>\n

Beyond private sector investment, AFD offers grants and loans: <\/strong>Egypt\u2019s hydrogen development strategy study could be financed through an AFD-French treasury grant, says Romatet. AFD\u2019s funding mechanism, Proparco<\/a>, financed the three French companies involved in Benban through direct loans, he adds.<\/p>\n

Technical assistance to financial institutions could drive financing to the green economy: <\/strong>Egypt\u2019s a liquid country, with accessible financing facilities, says Romatet. But providing technical assistance so financial institutions understand how to evaluate credit for green energy projects could help improve the culture of lending, he adds.<\/p>\n

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