Egypt to receive half of Acwa Power’s $30bn Africa investment

Reuters

• $15bn planned for Egypt
• Includes green hydrogen scheme
• Potential for desalination

Saudi energy company Acwa Power is hoping for financial close on the first phase of a scheme to invest $15 billion in Egypt over the next six years, as part of a plan to quadruple its total investment in Africa.

A flagship green hydrogen scheme in Egypt, as yet unnamed, could become the second-largest of its kind after the $8.5 billion Neom Green Hydrogen Project in Saudi Arabia, according to Marco Arcelli, CEO of Acwa Power.

Acwa hopes for it to be up and running by 2028. The plant is expected to produce 600,000 tonnes of green ammonia a year, around half the amount produced at the Neom project.

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The company is aiming to invest more than $4 billion in the first phase, having signed a framework agreement with the Egyptian government in December. 

“We hope that we can reach the final investment decision at the beginning of next year,” Arcelli told AGBI. 

Acwa intends to scale up the operation to reach a capacity of 2 million tonnes of green ammonia a year.

Its other plans in Egypt include a 1.1 gigawatt wind power project on the Red Sea with the capacity to power more than 1 million homes, with an initial investment of $1.5 billion.

The company already manages five existing solar projects in Upper Egypt with a combined investment of around $2 billion and “will continue to look for other opportunities” in photovoltaic solar power, Arcelli said. 

Acwa is also in talks with the government over desalination projects, although nothing has yet been agreed. The Egyptian government is aiming to increase desalination capacity to 8.85 million cubic metres a day by 2050 from its current 1.3 million cubic metres a day.

Across Africa, the company is aiming to increase its total investment from around $8 billion to $30 billion by 2030, with Egypt accounting for roughly half of that. Almost all the remaining investment will go towards projects in Morocco and South Africa. 

The company is also in talks with Tunisia and has recently agreed to build a desalination plant in Senegal.

Arcelli said Acwa is open to acquisitions in new markets but is most focused on consolidating its presence in Egypt, Morocco and South Africa and will “invest more where the opportunities develop fastest”.

“What you need to have are good solar resources and wind resources,” Arcelli said, “because then you can have production spread throughout the day, complemented with battery storage.”

Green hydrogen remains a new and largely untested energy source on the world stage. Memorably, Greg Jackson, the CEO of UK renewable energy group Octopus Energy, likened it to “flushing the toilet with champagne” because of its energy-intensive production.

Professional services firm Deloitte projects the global market value of green hydrogen to rise to $642 billion by 2030, outstripping natural gas, and increasing to more than $1.4 trillion by 2050.

Deloitte sees worldwide export revenues rising to $280 billion a year by 2050. North Africa stands to benefit the most with annual export revenues of $110 billion.