At COP28: SCATEC signs $1.1 bn deal on green fuelling station for ships in Suez

Norwegian renewables firm, SCATEC, has signed on to new green hydrogen and renewables projects in Egypt worth US$1.1 billion, deepening its commitment to Egypt’s potential future as a green fuel producer.

SCATEC signed the deal on Sunday at the ongoing UN Climate Change Conference, COP28, in Dubai.

The Norwegian company is already a partner in Egypt’s only pilot green hydrogen project in Ain Sokhna, the only project moving forward in the country despite committing billions of dollars to green hydrogen in Egypt.

The fuel — produced by renewable energy and considered a viable green alternative fuel for heavy industry — has been earmarked as a promising replacement for natural gas, which powers much of Europe. Green hydrogen can also be used as heavy duty fuel for ships, for example, as well as to fuel the production of green fertilizers or heavy metals.

SCATEC’s new agreement, signed over the weekend in Dubai with the Suez Canal Economic Zone, includes a $1.1 billion investment in East Port Said to finance a green fuelling station for ships.

The deal is the latest in a flurry of potential green hydrogen deals in Egypt, which has rushed — along with other countries in the region — to gain a foothold in an industry expected to grow quickly over coming years.

However, only one of those agreements has progressed to the execution phase. The 100 MW plant uses solar and wind energy in Ain Sokhna, based on an agreement between the Sovereign Wealth Fund, SCATEC and joint Emirati-Egyptian Fertiglobe. The project aims to produce around 90,000 metric tons of exportable green ammonia per year.

Fertiglobe announced in November that it had successfully produced and shipped their maiden cargo of green ammonia in a global first.

Industry figures previously told Mada Masr that the SCATEC-Fertiglobe plant took off in 2022 whereas other agreements are still at the preliminary stage due to the exceptional facilitations that SCATEC has secured.

To successfully expand the industry, they said, the government needs to launch the national green hydrogen strategy, which is set to offer incentives to investors to get the industry off the ground.

The strategy is yet to be issued, over a year after its initial launch date came and went with COP27.

Prime Minister Mostafa Madbuly announced at the end of November that the strategy was complete, approved by the recently established National Council for Green Hydrogen, and would be presented to the Egyptian Supreme Council of Energy.

The strategy — developed in coordination with investors to anticipate their needs — entails plans for Egypt to capture an ambitious five to eight percent of the market and includes lands to be allocated to investors for projects, his statement said.

Osama Fawzy, an industry consultant, believes that the extra time it has taken to draft the strategy  means the incentives will be geared toward encouraging global companies to commit to action and allow Egypt to compete with other countries in the region trying to secure funding for the industry.