The European Bank for Reconstruction and Development (EBRD) has approved a €80 million loan to Egypt’s Suez Oil Processing Company (SOPC) for the development of a green hydrogen production facility.
The loan is a significant milestone in Egypt’s pursuit of a clean and sustainable energy future, as the country aims to leverage its abundant renewable resources to generate green hydrogen.
Project Objectives
The Loan will support funding the procurement and construction of a 100 MW electrolyser facility together with the related facilities and civil works needed for the completion of the project (the “Electrolyser” or the “Project”). The Electrolyser, which will be powered by renewable energy, will produce green hydrogen that will substitute some of the grey hydrogen (i.e. produced from gas) consumption used by the Egyptian Fertilizer Company (the Offtaker and a subsidiary of the regional fertiliser producer, Fertiglobe PLC) and will be used as input to produce green ammonia which will be exported to the international markets. Being the first project of its kind in Egypt, the Project will lead to a significant demonstration effect and will be an important milestone in the development of a green hydrogen and ammonia industry in Egypt which is a key step towards decarbonising several industries, particularly fertilisers – a main consuming industry for ammonia.
The EBRD loan will finance the construction and operation of a hydrogen production facility that utilizes cutting-edge electrolysis technology. By converting excess renewable electricity generated from solar and wind power into green hydrogen, the project aims to reduce Egypt’s dependence on fossil fuels and diversify its energy mix.
The project is in line with Egypt’s ambitious renewable energy strategy, which targets 42% of the country’s total electricity generation to come from renewable sources by 2035. The strategy also aims to reduce greenhouse gas emissions by 2030 and contribute to the global efforts against climate change. Egypt has significant potential for renewable energy development, particularly in solar and wind power, given its favorable geographic location and climate.
The EBRD loan is part of a larger financing package that includes contributions from other international financial institutions and local banks. The total investment for the project is estimated to be around €80 million, which underscores the strong commitment from both public and private sectors to develop Egypt’s hydrogen economy.
The green hydrogen produced at the facility will be used primarily for domestic consumption, supporting various industries such as transportation, power generation, and heavy industries like steel and cement manufacturing. This will contribute to a reduction in Egypt’s carbon emissions and promote the country’s transition to a low-carbon economy.
In addition to its environmental benefits, the project is expected to create significant job opportunities in the region. The construction and operation of the facility will generate direct and indirect employment, providing a much-needed boost to the local economy.
The EBRD’s involvement in the project demonstrates the bank’s commitment to supporting the development of the hydrogen economy in its countries of operation. The bank has been actively investing in renewable energy and energy efficiency projects in Egypt, with a total investment of over €6.5 billion in various sectors since 2012.
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The success of the green hydrogen production facility in Egypt could serve as a model for other countries in the region, encouraging the adoption of similar projects across the Middle East and North Africa. This would not only help reduce the region’s reliance on fossil fuels but also promote sustainable economic growth and job creation.
