Egypt’s sovereign wealth fund signed four green ammonia agreements worth up to $33 billion with European developers on Sunday.
The agreements included an $11 billion deal with Frankfurt-based DAI Infrastruktur aimed at setting up a green ammonia project in East Port Said, an Egyptian cabinet statement said.
The Sovereign Fund of Egypt also agreed to team up with BP, UAE's Masdar, Egyptian infrastructure company Hassan Allam Utilities and Infinity Power to invest in a green ammonia plant in Ain Sukhna Port on the western coast of the Gulf of Suez. The project is expected to have a total investment cost of $14 billion.
Egypt, the Arab world’s third-largest economy, is looking to step up solar, wind and green hydrogen projects as it grapples with declining natural gas production.
The country aims to increase power generation from renewables to 42 per cent by 2035.
Egypt’s Electricity Minister Mohamed Shaker said the country plans to raise its target for the renewable share of energy generation to 58 per cent by 2040 as part of an updated strategy, Reuters reported on Saturday.
These agreements were signed on the sidelines of the EU-Egypt Investment Conference.
The two-day conference in the New Administrative Capital, east of Cairo, brought together more than 1,000 participants, including ministers, officials, European financial institutions and chief executives from various sectors from both the EU and Egypt.
This comes on the back of a landmark deal signed between the EU and Egypt in March, which includes up to €7.4 billion ($8 billion) in support for Cairo's economic reform programme and business environment.
In exchange, Egypt has agreed to assist the EU with several key issues, most notably stopping illegal migrants.
Egypt has a significant economic and political role due to its strategic location at the crossroads of Africa, the Middle East, and Europe, a senior EU official said during the event on Sunday.
“We see Egypt as a stabilising force in the entire region. The conflict in Gaza, the situation in Sudan and difficulties in the Red Sea, so we see that it's a very complicated geopolitical situation,” said EU trade commissioner Valdis Dombrovskis.
Egypt has been grappling with high inflation and substantial government debt, constraining its ability to invest in areas that could stimulate the economy.
Despite managing to avoid a full lockdown during the coronavirus pandemic, Egypt's economy was significantly impacted by the disruptions resulting from Russia's 2022 invasion of Ukraine. The country heavily depends on wheat exports from both Russia and Ukraine.
In March, Egypt secured an $8 billion loan package from the IMF on the condition that Cairo move to a flexible exchange rate system, tighten monetary policy, slow infrastructure spending, and preserve debt sustainability.
“We count on the EU as our main strategic partner that will help Egypt to move ahead to achieve a stable and booming economy for the sake of the whole region,” Mostafa Madbouly, Egypt’s Prime Minister, said during the same panel session.
The EU stands as Egypt's largest trading partner, accounting for 24.5 per cent of Egypt's total trade volume in 2020, according to EU data.
In a speech on Saturday, EU Commission President Ursula von der Leyen said that Europe accounted for 40 per cent of Egypt's foreign direct investments.
