EU launches green ammonia and grid initiatives in Egypt

The projects, which are aimed at advancing renewable energy in Egypt, are the Sokhna green ammonia project receiving €34.3 million and the Egypt grid modernisation and expansion programme receiving €90 million.

The Sokhna green ammonia project entails the development, implementation and operation of a 100MW electrolysis plant for the production of hydrogen for use in an ammonia production plant in Ain Sokhna on the western shore of the Gulf of Suez.

The aim is to produce green ammonia and export it to European end users. The project has secured an offtake agreement with Hintco GmbH, a subsidiary of the H2Global Foundation, through the first German Federal Ministry for Economic Affairs and Climate Action funded H2Global pilot auction for green ammonia.

Its location is strategic, including proximity to an industrial zone, seawater desalination plants and easy access to the Ain Sokhna port, from which the ammonia will be delivered to the port of Rotterdam.

The facility, which is being led by the Egypt Green Hydrogen consortium and developed by Norwegian renewable energy company Scatec, will be powered from a 203MW onshore windfarm in Ras Ghareb, close to the Red Sea, and a newbuild 70MW solar PV plant in Benban in the south of Egypt.

The initial green ammonia output is planned to be 19,500t, ramping up to 40,000t/year.

Under Egypt’s low-carbon hydrogen strategy, the aim is to position the country as a global renewable hydrogen hub.

Egypt’s grid modernisation and expansion programme is planned to increase its grid capacity to integrate renewable energy and help achieve the target of 22GW of renewable energy production by 2030.

Mediterranean investment 

These projects form part of a broader Mediterranean cooperation to attract investment and deepen energy links across the region.

“The Mediterranean has vast, untapped renewable energy potential,” comments Commissioner for the Mediterranean, Dubravka Šuica.

“We will soon launch T-MED, our key initiative under the Pact for the Mediterranean, to support our partners through win-win investments that attract private funding and strengthen cooperation across the region. By helping projects move forward and making investments safer, we are unlocking major opportunities, while building stronger links between countries.”

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T-MED – the Trans-Mediterranean Renewable Energy and Clean-Tech Cooperation Initiative – through which the projects will be implemented, is broadly aimed at tapping the renewable energy potential of the Middle East and North Africa (MENA) region.

With a renewable generation potential estimated by IRENA at over 2,300GW and solar and wind generation costing 35% lower than in the EU and continuing to fall, alongside promising geothermal potential and emerging offshore wind prospects, the MENA region is considered to have the potential to become a cornerstone of the Euro-Mediterranean green transition.

T-MED is intended to mobilise tens of billions of euros in private investment over the coming years. 

To this end, the EU has committed to establishing the T-MED investment platform to develop a pipeline of high-impact renewable energy, electricity grid and clean tech manufacturing projects to be linked with appropriate financing by coordinating blended financing solutions, guarantees and technical assistance provided by international financial institutions, national development banks and private investors.

Egyptian grid development

These two projects are by no means the first European funding into Egypt. In December 2025, the European Bank for Reconstruction and Development (EBRD) announced a €200 million financing package for the Egyptian Electricity Transmission Company (EETC).

One of the country’s first grid investments as part of the EETC’s wider investment programme under Egypt’s 'Nexus of water, food and energy' initiative, it consists of an EBRD loan of up to €165 million, supported by an investment grant from the European Union Neighbourhood Investment Platform of up to €35 million.

The financing is intended to support the upgrade of a 500kV substation in the Cairo governorate, intended to support the stability of the network with the decommissioning of the Shoubra El Kheima gas-fired power plant, and the construction of an HV overhead transmission line to evacuate more than 2.1GW of renewable energy from the Gulf of Suez region.

Together, these two projects should reduce transmission losses and reduce annual carbon emissions by over 22,500t CO2e.

The energy pillar of the Nexus initiative, led by the EBRD, is aimed at the decommissioning of 5GW of fossil fuel power plants to build up 10GW of renewable energy and accompanying grid infrastructure.