Scatec ASA's Egypt Green Hydrogen project, in partnership with Fertiglobe, Orascom Construction, The Sovereign Fund of Egypt and the Egyptian Electricity Transmission Company has reached a key milestone, after Fertiglobe secured a green ammonia offtake agreement with Hintco in Germany, through the first-ever H2Global auction.
Under the terms of the deal Fertiglobe and Egypt Green Hydrogen have entered into a 20-year ammonia offtake agreement. The agreement was signed at the Egypt-EU Investment Conference in Egypt last month.
Scatec Chief Executive, Terje Pilskog, said: "The H2Global award represents a key milestone for the Egypt Green Hydrogen project in Ain Sokhna, Egypt. This demonstrates the competitiveness of green hydrogen and ammonia production in Egypt, driven by its abundant renewable energy resources and strategic geographical location. We are grateful for the Egyptian government leading role in supporting this pioneering project and we look forward to continuing to work with the relevant stakeholders to establish Egypt as a regional green hydrogen hub. With Fertiglobe securing an offtake agreement for the ammonia, Egypt Green Hydrogen will accelerate the project's development and advance it towards financial close."
In 2021, Scatec and partners agreed to develop, build, own and operate a 100 MW electrolyser facility to produce renewable hydrogen to be used as feedstock for the production of renewable ammonia at Fertiglobe's existing ammonia plant in Ain Sokhna, Egypt. The project will be powered by about 270 MW of solar and wind power capacity and deliver approximately 13,000 tonnes of renewable hydrogen and up to 70,000 tonnes of renewable ammonia annually.
Scatec is the lead developer and majority sponsor of Egypt Green Hydrogen with an ownership share of 52 per cent and will provide EPC services in collaboration with Orascom Construction. Scatec will further provide O&M and Asset Management services for the project alongside key technology providers and project partners.
Next important milestones for the project are to select the electrolyser supplier and complete the project financing process with BII, the European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Germany's development finance institution and KfW subsidiary DEG and US International Development Finance Corporation (DFC), that are providing competitive financing to support the first green hydrogen and ammonia project in Egypt. The partners expect to reach financial close in the first half of 2025.
British Ambassador to Egypt, Gareth Bayley, said: "The UK's new government is keen to continue its commitment to help Egypt deliver on its green ambitions and support Egypt's endeavours to become a green hydrogen superpower. This project, supported by BII, is one of the first of its kind and perfectly illustrates that UK commitment in action. I am delighted that this offtake agreement will allow the project to move on to new milestones as Egypt, the UK, and other international partners endeavour to move towards a low carbon future."
Iain Macaulay, Director and Head of Project Finance in Africa at BII, said: "Egypt has the potential to be a global leader in renewable energy generation and green hydrogen production. I am delighted that BII has been able to provide project finance to back this landmark project, that will support a green and sustainable future for the country and showcase the importance of new technologies in supporting a just transition for the whole African continent."
Ahmed El-Hoshy, Chief Executive Officer of Fertiglobe, said: "This award marks a significant milestone for Fertiglobe in advancing sustainable ammonia production and a further critical step towards FID of Egypt Green Hydrogen, expected in H1 2025. Our selection as the winning bidder in H2Global's pilot auction underscores our leadership in supplying low-carbon products and our commitment to shaping a more sustainable future, and I appreciate the work of our incredible team to make this award possible. We are leveraging this vital program which makes our investment in sustainable ammonia economically viable, supporting critical decarbonisation technology, while maintaining our disciplined growth strategy."
The H2Global Foundation was established in 2021 to accelerate the emergence of markets for clean hydrogen and other zero-and low-emission technologies worldwide. It does so through market-based instruments, such as the H2Global mechanism, implemented by its subsidiary Hintco. The German Federal Government has committed EUR 4.43 billion into this initiative.
