Egypt Accelerates Renewable Energy Development with Ambitious Plans Through 2040

Egypt is progressively increasing its renewable energy capacity and has even more ambitious plans for the coming decade. Although this North African nation still heavily relies on fossil fuels, this is likely to change soon thanks to significant private investment in green energy, supported by favorable national policies.

Exceptional Natural Potential

Egypt possesses considerable potential for developing solar and wind energy sectors, thanks to its favorable geographical conditions, including vast areas of arid desert, abundant sunshine, and high wind speeds. The North African country has one of the highest levels of solar radiation in the world, ranging from 2,000 to 3,200 kilowatt-hours (kWh) per square meter annually.

National Strategy and Supportive Policies

In recent years, the Egyptian government has shown greater openness to energy diversification through private investment, supporting Egypt's goals of increasing solar and wind capacity. The Integrated Sustainable Energy Strategy (ISES) 2035 builds on previous national frameworks and identifies renewable energy as a core component in Egypt's green transition.

Renewable Energy Targets

The government aims to generate 42% of electricity from renewable sources by 2030, increasing to 60% by 2040. This will be achieved by diversifying the energy mix to include wind, hydroelectric, solar photovoltaic, and green hydrogen.

International Support and Private Investment

The Egyptian government has sought external support for its energy strategy and development of a diverse energy mix, with the European Commission having contracted management consulting firm Cowater International to assess Egypt's energy strategy for the next two decades.

In line with greater openness to private investment, the government has signed approximately 32 Power Purchase Agreements (PPAs) with private developers in 2025 to produce 1,465 MW of renewable energy, with additional agreements underway.

Current and Planned Projects

• Benban Solar Park 1.8GW - Currently being expanded
• Additional 2 GW project by AMEA Power - With 900 MWh battery storage system
• 500 MW facility at Abydos Kom Ombo Solar Park - Under development

New Agreements and International Investment

In January, Egypt signed renewable energy agreements totaling $1.8 billion. This is expected to help the North African country achieve its goal of generating 42% renewable electricity by the end of this decade. The agreements include projects with Norwegian renewable energy developer Scatec and Chinese company Sungrow.

The first project will involve developing a solar power plant with Scatec to generate electricity and energy storage stations in Minya, Upper Egypt, according to the Egyptian government. The plant is expected to have a capacity of 1.7 GW and integrate a 4 GWh battery storage system. Meanwhile, Sungrow will develop a battery manufacturing facility in the Suez Canal Economic Zone and will supply batteries to the Scatec plant. Scatec has also signed a PPA to provide 1.95 GW capacity and 3.9 GWh battery storage system.

Partnership with the European Union

In June, Egypt signed an agreement with the European Union to strengthen strategic partnership in renewable energy, agreeing to a funding package of up to $788 million to expand and upgrade Egypt's electricity transmission grid. The package includes a $686 million loan from the European Investment Bank's development arm, EIB Global, and up to $103 million in grants from the European Commission.

The project, led by state-owned Egyptian Electricity Transmission Company (EETC), aims to deliver a grid capable of handling 22 GW of renewable energy capacity, or enough electricity for 10 million households by the end of this decade.

"Under our flagship initiative T-MED, we are today presenting a major EU-backed project to reinforce and expand Egypt's electricity infrastructure. This will strengthen Egypt's role in the regional energy market and create significant business opportunities for local and European companies. This is further proof of our joint commitment to sustainable growth, energy security, and long-term prosperity in the Mediterranean."

— Dubravka Šuica, European Commissioner for the Mediterranean

"This agreement reflects the strength of the partnership between Egypt and the European Union and our shared determination to advance the green transition. Together with the EIB and EU, we are taking a significant step toward modernizing our electricity grid, enhancing energy security, and creating new opportunities for sustainable growth."

— Badr Abdelatty, Minister of Foreign Affairs, International Cooperation and Egyptians Abroad

Green Hydrogen Development

In addition to increasing solar and wind capacity, Egypt has major plans for developing green hydrogen to support industrial decarbonization. In February 2024, the Supreme Energy Council approved the National Strategy for Low-Carbon Hydrogen. In January, partial production began at a 100 MW green hydrogen production project in the Suez Canal Economic Zone, prior to wider rollout.

Conclusion

Egypt has rapidly developed renewable energy capacity in recent years and could become a major player in green hydrogen production in the coming decades. This North African nation serves as a good example of how targeted national policies and openness to private investment can achieve significant results.

The combination of abundant natural potential, clear national strategy, and effective international cooperation is positioning Egypt as a beacon in the renewable energy sector, not only serving domestic needs but also having the potential to become a clean energy export hub for the region and internationally.