With agreements inked, Egypt now has to lock in financing: Egypt signed initial agreements for green hydrogen and wind power projects worth up to USD 119 bn during COP27, according to an Egyptian cabinet statement. The 28 GW-worth of wind power agreements Egypt has lined up will — if they all get off the drawing board — demand investment of some USD 34 bn. The nine green hydrogen and ammonia facilities framework agreements the country signed will together cost as much as USD 85 bn, the statement read.

Who is paying for what? All of the projects are in the early stages of development, so there is no breakdown on how they will be financed yet — and still no public handicapping of which are most likely to attract finance. You can expect most of them to be looking for a mix of funding from development finance institutions (DFIs), multilaterals, banks, and public funds. The climate finance roadmap laid out during COP27 through its Nexus for Water, Food, and Energy (NWFE) program and the Sharm El Sheikh Guidebook for Just Financing will be guides to how policymakers look at the funding question.

There’s also the issue of whether Europe might provide producer subsidies to Egypt for green energy (ammonia and hydrogen in particular) destined for export to the European Union, a question we raised with OCI and Fertiglobe CEO AHmed El Hoshy (see interview, below).

DFIs are already stepping up to the plate: Development finance institutions including the European Bank for Reconstruction and Development have already signaled their interest in the newly announced projects, while the US, Germany and other European countries have pledged to provide more than USD 550 mn to support Egypt’s clean energy transition under NWFE, which the Egyptian government launched in July to channel finance into green projects. Agreements signed last week are expected to unlock USD 15 bn from private investors and DFIs to help Egypt decarbonize its power infrastructure, and strengthen its food and water security.

REFRESHER- Egypt has signed framework agreements for nine green hydrogen and ammonia facilities in the Suez Canal Economic Zone, which would collectively produce up to 4.6 mn tons of green ammonia and 2.7 mn tons of hydrogen a year when fully operational. Egypt also lined up 28 GW of wind projects in the past week, equivalent to nearly half of the country’s total installed power generation capacity — plus another 1.5 GW wind farm that the Egyptian Natural Gas Holding Company (EGAS), General Electric and subsea robotics firm Seasplit Technologies are currently studying.