Egypt is turning to Gulf investors as it grapples with persistent power blackouts exacerbated by a growing population and extreme heat. Prime Minister Mostafa Madbouly announced on September 19 that power cuts would be eliminated in the near future, signaling a potential end to the load shedding that has frustrated citizens throughout the summer.
The country faces a pressing need to increase its electricity supply, having experienced peak consumption surging from 37GW to a record 38.5GW during this summer’s heatwaves. To meet this rising demand, Madbouly highlighted the necessity of adding 4GW of renewable energy capacity by next year.
Currently, natural gas fuels 84% of Egypt’s electricity generation, with solar and wind contributing only about 10%. The government’s focus is shifting toward renewable energy as it seeks to expand its energy mix amid austerity measures that threaten green energy progress.
Dubai-based Amea Power is one of the Gulf companies stepping in to help. The developer plans to invest in 2GW of renewable energy capacity, incorporating wind, solar, and green hydrogen projects. Amea’s chairman, Hussain Al Nowais, praised Egypt’s favorable conditions for renewable energy development, citing the nation’s abundant wind and solar resources.
Amea aims to double its existing 500MW Abydos Solar Energy project to 1GW and has recently received approval for an additional 1GW capacity. Al Nowais anticipates that a separate 500MW wind project will come online early next year. The company is also working on Egypt’s first battery storage project, which will enhance the optimization of renewable energy output.
As temperatures rise due to climate change—Aswan recorded a staggering 50.9°C in June—Egypt’s population continues to grow by nearly two million annually. Projections indicate the population could reach 157 million by 2050, further intensifying the demand for energy.
James Swanston, an economist at Capital Economics, notes that significant investment is required for Egypt to meet its energy goals. However, high debt and interest payments limit the government’s fiscal capacity, emphasizing the need for private sector involvement, particularly from Gulf investors.
Al Nowais remarked on the strong support from the UAE, highlighting ongoing collaborations with development financial institutions eager to invest in Egypt’s energy sector. Another major player, Saudi Arabia’s Acwa Power, is planning to invest $15 billion in Egypt by 2030, focusing primarily on green hydrogen, solar, and wind projects.
Acwa Power CEO Marco Arcelli expressed optimism about the future, citing Egypt’s growing population and economic potential. The Egyptian government aims to triple foreign direct investment to $30 billion in the current financial year, actively courting foreign investors with various incentives.
Despite previous economic challenges deterring investment, Arcelli believes conditions have improved significantly, encouraging long-term investments. He emphasized that Egypt’s geographical positioning and fundamental market strengths make it an attractive destination for energy investment.
In conclusion, as Egypt seeks to bolster its energy infrastructure and end power blackouts, Gulf investors are poised to play a crucial role in shaping the future of the country’s energy landscape.
