Acwa Power signs $4bn Egypt green hydrogen agreement

Saudi Arabia’s Acwa Power has signed a framework agreement to develop a $4 billion green hydrogen project in Egypt.

The first phase of the project will have the capacity to produce 600,000 tonnes a year of green ammonia, which could be increased to two million tonnes annually in a second phase, the Riyadh-based company said.

“As a first mover in green hydrogen, Acwa Power is proud to bring its expertise in this new and exciting market to Egypt,” said its chief executive Marco Arcelli.

“Egypt is well positioned to become one of the world’s top producers of green hydrogen and we are elated to be a part of the country’s energy transition.”

Green hydrogen is produced using electrolysers powered by renewable energy to split water from oxygen, significantly reducing the carbon dioxide emissions caused by traditional hydrogen production methods that mainly use fossil fuels.

At the UN climate conference Cop27, Egypt brought forward its goal of sourcing 42 per cent of its energy from renewable sources by 2035 to 2030. Its current renewable energy component is about 20 per cent.

Including the latest agreement, Acwa Power will operate five renewable energy projects in the North African country with a total power generation capacity of 1.4 gigawatts.

Acwa Power, which is backed by the Public Investment Fund, has operations in 12 countries across the Middle East, Africa, Central Asia and South-East Asia.

Its portfolio includes 77 projects in operation, advanced development or construction – with an investment value of $82.8 billion – and the capacity to generate 53.69 gigawatts of power and manage 7.6 million cubic metres of desalinated water a day.

Last month, the Tadawul-listed company announced a new green hydrogen project in Uzbekistan.

The first phase, a 3,000-tonne green ammonia pilot project, is already under way. Upon the second phase’s completion, 2.4 gigawatts of wind energy will drive an annual production of 500,000 tonnes of green ammonia.

Deals in the hydrogen sector gathered pace on the sidelines of the Cop28 climate conference in Dubai as companies raced to boost the production of the fuel.

Abu Dhabi’s clean energy company Masdar and Spain’s Iberdrola signed a €15 billion ($16.41 billion) partnership to evaluate the development of offshore wind and green hydrogen projects in key markets including Germany, the UK and the US.