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Will a Chinese Green Hydrogen Project in Egypt be a Blueprint for Africa?

Egyptian President Abdel Fattah El-Sisi and a group of Egyptian officials meet with representatives of the China International Energy Group (CIEG). Image via the Egyptian President's office.

Egypt and China are seeking to consolidate economic and investment cooperation in various areas of common interest, including clean energy.

The China International Energy Group (CIEG) intends to establish a $5 to $8 billion project to produce green hydrogen in the North African nation.

In a meeting between Egyptian President Abdel Fattah El-Sisi and CIEG Chairman, Ye Jianming, discussions also focused on water treatment plants, desalination, electricity and renewable energy, and transport infrastructure among others.

Ye, who was accompanied by a delegation of senior CIEG executives added that Egypt had great potential in the green energy sector.

In June last year, Egypt submitted a revised Nationally Determined Contributions (NDC) before COP27 took place. Hosting the COP triggered increased investment in energy efficiency, green solutions, and cleaner energy sources.

Egypt is scaling up solar energy installations across the country which is a boost to clean and affordable energy access.

From the NDC, Egypt’s commitment targets reducing emissions by 33% in the electricity sector. This is an equivalent of (70 Mt CO2e), the oil and gas sector will see the country shed 1.7 Mt CO2e (65%) and 7% in the transportation sector (9 Mt CO2e) by 2030. This is compared to a business-as-usual approach dependent on conditional external support.

The country also plans to install additional renewable energy capacities to generate 42% of electricity by 2035.

Making Clean Energy a Reality

To achieve these goals, Egypt has had a flurry of activities and after meeting the Chinese delegation, Egypt’s Electricity and Renewable Energy Minister Mohamed Shaker met with Stefan Wenzel, the Parliamentary State Secretary at Germany’s Federal Ministry for Economic Affairs and Climate Action.

The meeting discussed boosting cooperation between the two countries on electricity and renewable energy.

The meeting came after Egypt announced an ambitious plan to control 5% of the global hydrogen market by 2040. During the COP27 climate summit, Egypt signed eight framework agreements to develop green hydrogen and ammonia projects.

Conjuncta, a German Investment Company, announced a new green hydrogen project in March involving Egypt, Mauritania and the United Arab Emirates.

The plant will be located in the northeast of Mauritania’s capital, Nouakchott, and is expected to generate 10 gigawatts. According to Conjuncta, the facility will also export ammonia and energy from the plant.

Egypt is planning to boost its 2022/23 natural gas exports with the country’s Finance Minister, Mohamed Mait, pointing out that they aim to reach $1 billion per month over the next year.

The country is also working on decarbonizing its gas to be environmentally safe and competitive in the market. Egypt is also seeking diversification of its energy sources to improve energy security.

WHY IS THIS IMPORTANT? The world is shifting as the push to abandon dirty fuel sources gains momentum. In Egypt, companies that negotiated for some of the nine green hydrogen and ammonia plants at COP27 are expected to sign final agreements in the second quarter of this year.

To put Egypt’s plans into perspective, the continent of Africa has abundant sun and wind creating an enormous potential for renewable energy. However, due to Africa’s relative lack of development, producing green hydrogen may prove difficult for many countries that cannot match Egypt’s muscle.

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