Ahmed Kamel – Egypt Daily News
Egypt and the European Union have taken a significant step forward in their expanding energy cooperation, signing two grant agreements worth more than €124 million aimed at modernizing Egypt’s electricity grid and accelerating the development of green ammonia production.
The agreements were finalized during the Egypt’s Sustainable Energy Outlook 2040 conference in Cairo, where policymakers, financiers and industry leaders gathered to outline the country’s long-term clean energy trajectory. The funding package underscores a shared ambition to transform Egypt’s power infrastructure while positioning the country as a regional hub for renewable energy and low-carbon exports.
The largest portion of the funding, €90 million, will support the Egypt Grid Modernization and Expansion program. The grant will be managed by the European Investment Bank, the European Union’s long-term lending institution. The program focuses on upgrading and expanding Egypt’s national electricity transmission network to accommodate a growing share of renewable energy.
Egypt has set ambitious targets to expand its clean energy capacity, aiming to add approximately 22 gigawatts of renewable power to the grid by 2030. Achieving this objective requires more than building solar and wind farms; it demands a modern, flexible grid capable of integrating intermittent energy sources without compromising reliability. Officials have emphasized that strengthening transmission infrastructure is essential to ensure stable electricity supply, reduce technical losses and improve overall system efficiency.
A resilient grid is also seen as critical to reducing the country’s dependence on imported fossil fuels and shielding the economy from volatile global energy prices. In recent years, fluctuations in international fuel markets have placed pressure on public finances and energy subsidies. By increasing the share of domestically produced renewable energy, policymakers aim to enhance energy security while advancing climate commitments.
In parallel with grid improvements, €34.3 million has been allocated to the Sokhna Green Ammonia project, led by Norwegian renewable energy company Scatec. The project, located in the Suez Canal Economic Zone, is designed to produce green hydrogen using renewable electricity and convert it into green ammonia.
Green ammonia, produced without carbon-intensive fossil fuels, is emerging as a promising clean fuel and industrial feedstock. It can be used in shipping, power generation and fertilizer production, and is widely viewed as a practical means of transporting green hydrogen across long distances. As global demand for low-carbon fuels grows, Egypt’s geographic location and renewable energy potential give it a competitive advantage in serving European and international markets.
The Sokhna initiative aligns with Egypt’s broader strategy to become a regional export hub for green energy in the Eastern Mediterranean. Beyond export potential, the project is expected to stimulate domestic industrial development by fostering technical expertise in advanced electrolysis, ammonia synthesis and renewable integration technologies.
Both agreements fall under a broader Strategic and Comprehensive Partnership launched in 2024 between Egypt and the European Union. The cooperation framework includes the Trans-Mediterranean Renewable Energy and Clean-Tech Cooperation Initiative, known as T-MED, which seeks to mobilize private sector investment, enhance regional energy security and promote cross-border trade in clean electricity and green fuels.
European officials have framed the partnership as part of a wider effort to diversify energy supply chains and deepen collaboration with neighboring regions. For Egypt, closer alignment with European climate and energy priorities offers access to financing, technology transfer and export markets.
Egypt’s Minister of Planning and Economic Development has described the investments as pivotal for long-term economic growth and competitiveness. By modernizing infrastructure and supporting high-value clean energy industries, authorities hope to generate employment, attract foreign direct investment and strengthen the country’s industrial base.
Energy analysts note that infrastructure upgrades and green hydrogen projects require not only capital but also regulatory reform, workforce training and sustained political commitment. The success of the grid modernization program will depend on effective coordination between state utilities, private developers and international financiers. Likewise, scaling green ammonia production to commercially competitive levels will require continued cost reductions in renewable generation and electrolysis technologies.
Still, the newly signed grants signal momentum. They reflect a convergence of interests: Europe’s push for reliable, low-carbon energy imports and Egypt’s ambition to transform its energy system while enhancing its strategic role in the Mediterranean.
As the region navigates the twin pressures of climate change and energy security, the partnership between Egypt and the European Union highlights a model of cross-border cooperation rooted in infrastructure investment and technological innovation. If successfully implemented, the projects could help anchor a cleaner, more resilient energy landscape not only for Egypt, but for the wider Mediterranean basin.
