EGYPT – Norwegian renewable energy company, Scatec, has entered into an agreement with Fertiglobe plc, a leading ammonia producer jointly owned by OCI N.V. and Abu Dhabi National Oil Company (ADNOC), and The Sovereign Fund of Egypt (TSFE), to jointly develop a 50-100MW green hydrogen facility as feedstock for green ammonia production.
Scatec will build, operate and majority own the facility and a long-term off-take agreement will be entered into with Fertiglobe’s subsidiary EBIC.
The facility will be located near EBIC in Ain Sokhna and is the first step towards developing a green hydrogen hub 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. New business models and innovation have been at the core of Scatec since our inception, and we see green hydrogen as a natural part of our strategy and the renewable ecosystem in the years to come,“ said Scatec CEO, Raymond Carlsen.
According to Scatec, the deal forms part of its strategic initiative, “Power to X”, which seeks to develop industrial projects that contribute to reducing carbon emissions through the provision of competitive renewable energy.
The renewable energy company says it aims to develop long-term partnerships where it can capitalize on its expertise in renewable project development in high-growth markets globally.
Long-term off-take contracts, equity co-investments and project financing from multilateral finance institutions represent key elements of the company’s strategy.
Ahmed El-Hoshy, CEO of OCI N.V., commented saying through the partnership; “we will deploy world-leading technology to ramp up our green ammonia production profile and further expand our low-carbon portfolio.
Fertiglobe is increasingly becoming an ideal springboard to capture the huge growth opportunities offered by the hydrogen economy.
The participation of the Sovereign Fund of Egypt underlines Egypt’s commitment to becoming a global leader in the renewables space.”
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 Egypt’s green hydrogen ambitions in the years to come.
The project will be realized in close cooperation with leading hydrogen technology providers and multilateral development institutions for financing. Required engineering and development, including structuring of commercial agreements for the new facility, will start imminently with a target investment decision in 2022 and start-up of the hydrogen facility by 2024.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals, and insights from Africa’s business, economy, and more. SUBSCRIBE HERE