Egypt’s Sovereign Fund partners with Scatec, Fertiglobe to develop green hydrogen facility
Norwegian renewable energy producer Scatec signed an agreement on Thursday with Fertiglobe and the Sovereign Fund of Egypt (TSFE) to jointly develop a 50-100MW green hydrogen facility as feedstock for green ammonia production.
Fertiglobe is a joint venture between OCI N.V. and Abu Dhabi National Oil Company (ADNOC).
Scatec is set to build, operate, and majority own the facility and a long-term off-take agreement will be entered into with Fertiglobe’s subsidiary Egyptian Basic Industries Company (EBIC).
The facility will be located near EBIC in Ain Sokhna and is the first step towards developing a green hydrogen hub in Egypt, Scatec said in a statement.
EBIC will use the green hydrogen as a supplementary feedstock for the production of up to 90 000 tpy of green ammonia under a long term off-take agreement, OCI statement read.
The final investment decision is expected in 2022, and start-up is targeted for 2024, the statement added.
“We are proud to establish a strong partnership with Fertiglobe and the Sovereign Fund of Egypt to move the green agenda forward in Egypt. The development of this green hydrogen project builds on our long experience in project development, financing, and delivery of renewable energy projects in emerging markets.” Scatec’s chief executive Raymond Carlsen said.
This new partnership forms part of Scatec’s strategic initiative, “Power to X”, with the objective of enabling and realising industrial projects that contribute to reducing the carbon emissions through the provision of competitive renewable energy, Scatec statement read.
The ambition is to develop long-term partnerships where Scatec can capitalise on its expertise in renewable project development in high growth markets worldwide. Renewable technology, long term off-take contracts, equity co-investments, and project financing from multilateral finance institutions represent key elements of this strategy, Scatec added.
Ahmed El-Hoshy, CEO of OCI N.V., commented: “We are pleased to partner with Scatec, a leader in the global renewables market and Egypt’s largest renewable power developer.
“Together we will deploy world-leading technology to ramp up our green ammonia production profile and further expand our low-carbon portfolio.” Ahmed El-Hoshy, chief executive of OCI N.V.
“The participation of the Sovereign Fund of Egypt underlines Egypt’s commitment to become a global leader in the renewables space.” El-Hoshy added.
Ayman Soliman, chief executive of TSFE, said: “We are pleased to be partnering up with Scatec and Fertiglobe who are pioneers in green hydrogen production, to provide a unique investment product that creates financial returns while nurturing the green economy at large.”
“The Sovereign Fund of Egypt is a manifestation of Egypt’s 2030 Vision with the principles of sustainable development and impact investment instilled in its mandate, and this project is a cornerstone investment in our green sustainable portfolio build-up with many more to come.” Soliman added.
The parties will seek support from the Egyptian government for required regulatory approvals and sourcing of competitive renewable power from the grid, with the intention to build out new solar and wind capacity to power the country’s green hydrogen ambitions in the years to come.
The project will be realised in close cooperation with leading hydrogen technology providers and multilateral development institutions for financing, the statement added.
Required engineering and development, including structuring of commercial agreements for the new facility, will commence imminently with a target investment decision in 2022 and start-up of the hydrogen facility by 2024.
