First African integrated green hydrogen plant close to liftoff

From the newsletter

A green hydrogen project in Egypt is set to receive a final investment decision in the first half of 2025 and become operational in 2027, according to global fertiliser producer Fertiglobe. Located in Ain Sokhna, in the Suez Governorate, 120 km southeast of Cairo, the project is Africa’s first integrated green hydrogen plant. 

• With a total estimated capital expenditure of $516 million, the project has a 100 MW electrolyser, powered by 260 MW of solar and wind energy. It is expected to produce 15,000 tonnes of green hydrogen annually. 

• This hydrogen will serve as feedstock for the production of 74,000 tonnes of green ammonia at Fertiglobe’s local manufacturing facility under a 20-year offtake agreement.

More details

• Fertiglobe’s investment announcement comes just a few months after the project secured a $32.9 million grant from Germany’s PtX Development Fund in October 2024. Additionally, the European Bank for Reconstruction and Development is supporting the project with an $80-million loan, underscoring strong international backing for Egypt’s green hydrogen ambitions.

• Headquartered in Abu Dhabi, United Arab Emirates , Fertiglobe is the largest nitrogen fertiliser producer in the Middle East and North Africa region and a pioneer in green ammonia production. The company has been actively investing in low-carbon and sustainable energy solutions.

• The company is undertaking the project in partnership with a consortium comprising Norway-based renewables developer Scatec ASA, Orascom Construction, the Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company.

• Once production begins in 2027, Fertiglobe is expected to export 19,500 tons of green ammonia to Europe, with volumes scaling up to 397,000 tons by 2033 for a maximum contract value of $412.4 million . This is based on a deal secured in July 2024 when Fertiglobe won the pilot H2 Global auction. The auction set a contract price of $ 1,043.41. per ton (including delivery to Europe) and a net price of $837.60 per ton.

• Green ammonia is expected to reduce greenhouse gas emissions from nitrogen fertilisers. Predominantly used in agriculture, nitrogen fertilisers play a crucial role in enhancing crop yields but are traditionally produced using natural gas, a fossil fuel which contributes significantly to carbon emissions. 

• This project is a key component of Egypt’s strategy to become a regional leader in green energy. With abundant solar and wind resources, Egypt has positioned itself as a hub for green hydrogen and ammonia production, aligning with its climate commitments and global decarbonisation efforts. 

Our take

• Replacing conventional ammonia with green ammonia can substantially lower the carbon footprint of fertiliser production. UNEP reports that nitrous oxide emissions from these fertilisers are 300 times more potent than carbon dioxide as a greenhouse gas. 

• Green ammonia is gaining global traction as a low-carbon alternative for industries such as shipping, fertiliser production, and power generation. With European demand for green ammonia rising, Egypt’s project strengthens its role in the international clean energy supply chain, positioning the country as an essential player in the global shift towards sustainable energy.

• While green hydrogen has traditionally been utilised in sectors like transportation and industrial feedstock, its expansion into large-scale fertiliser production represents a transformative shift. This development not only enhances the sustainability of agricultural inputs but also positions Egypt as a key player in the global green hydrogen economy, contributing to worldwide decarbonisation efforts.