Oasis by the Suez Canal, or Mirage in the Desert?

From MoUs to Megawatts? Not Yet. 

Let’s start with what’s real: Egypt has laid serious groundwork — faster than many peers.

• A national hydrogen strategy ✔ 

• A new incentives law (January 2024) ✔ 

• Over 30 hydrogen MoUs signed ✔ 

• Suez Canal Economic Zone (SCZONE) infrastructure moving ✔ 

• 3.2 MTPA of green hydrogen targeted by 2030 ✔ 

• Zones like Sokhna and East Port Said being actively developed. 

• Land, sun, ports, and industrial demand 

It is also true: 

• Apart from early-stage moves like Scatec’s ammonia project in Ain Sokhna, no gigawatt-scale green hydrogen project has yet reached final investment decision. 

• Offtake remains uncertain. 

• Costs are high. 

• And domestic demand is still on the sidelines. 

Developers like EDF, Fertiglobe, HYPORT Gargoub, and Voltalia are advancing — but cautiously. The SCZone is doing the heavy lifting. But it can’t carry the sector alone.

The Shipping Test: IMO Raised the Stakes 

The IMO now requires international shipping to hit net-zero “by or around 2050,” with key checkpoints in 2030 and 2040. With the Suez Canal moving 12% of global trade, Egypt is a natural node in the emerging green shipping map. And yet, zero green bunkering infrastructure is operational. 

From Ras Shukeir to the SCZone, bunkering projects and ammonia production zones are being scoped. But the economics is still a challenge: 

• Green methanol: $1,100–1,500 per tonne 

• Green ammonia: ~$850 per tonne 

• Green steel (produced in Egypt and shipped to Europe): $730 per tonne — more competitive than EU-based supply 

Egypt has the makings of a global green fuel bunkering powerhouse—positioned to fuel ships from Singapore to Rotterdam with green ammonia, methanol, or hydrogen. But turning this vision into reality demands more than geography. It requires deep port integration, infrastructure capable of handling multiple fuel types, guaranteed offtake agreements with EU-based shipping alliances, and tight regulatory alignment with evolving IMO fuel standards. Without guaranteed offtake and port integration, the Suez risks becoming a mirage — not the green artery of global shipping.

In short: If Egypt wants to lead in green shipping, it must get projects to FID fast. The IMO’s clock is ticking. The opportunity is massive. But the gap is widening. The real bottleneck remains offtake and finance.

The global shipping market is asking for green fuel. Egypt could help supply it — but only if costs come down and buyers show up.
 

Here at the Suez Canal Economic Zone, we are working together with renewable energy developers and others to make to be ready to manage the bunkering of green ammonia in the years to come/from 2028 onwards. 

Waleid Gamaleldien 
Chairman, Suez Canal Economic Zone Authority, Egypt

Finance: Stack It or Stall It 

Green fuels are facing a cost and complexity curve that’s steeper than solar or wind. 

Despite Egypt’s abundant renewables and incentives, green hydrogen remainsremains significantly more expensive and the cost gap must narrow for domestic demand to scale and exports to take off.  

Ambition alone doesn’t derisk $1–2 billion projects. So, what’s needed? De-risking is no longer optional. It’s the only way to move the needle on FID. 

Not one silver bullet, but a toolbox: 

• Capex support of 50–70% is required for initial projects. 

• Concessional debt must sit below 4% interest with long grace periods. 

• Blended instruments tied to offtake certainty. 

• Risk mitigation must include FX guarantees, political risk insurance, and off-take coverage. 

• H2Global-style models (like Hintco’s double auction system) must be adapted and replicated. 

• Egypt’s involvement in the next H2Global tender (targeting ammonia and methanol) could be a gamechanger. 

Say it loud: developers don’t want more concepts — they want clarity, risk cover, and faster execution. 

Tools are coming — H2Global auctions, EBRD project templates, World Bank risk-sharing facilities. But as one developer put it: “We don’t need new instruments. We need the existing ones to work — together, and fast.” 

But the path to affordability doesn’t run only through subsidies. It also runs through domestic capability. 

Egypt has another card to play: its own industry. 

Green hydrogen in Egypt won’t succeed if it’s just an export story. It has to mean something at home. 

Six of the top ten electrolyser manufacturers in 2024 were Chinese — a reminder that while importing may be necessary in the short term, Egypt’s real edge won’t come from what it buys, but from what it builds. Long-term competitiveness — and resilience — will hinge on how much of the value chain Egypt can localise, not just assemble. 

Egypt’s industrial base, from fertiliser to cement — presents an untapped hydrogen demand engine. But that demand won't come without delivery. Real molecules, real infrastructure, real skills.  

Efforts are underway to map the local value chain, assess workforce readiness, and scale up manufacturing of components like compressors, tanks, and pipes. Building these domestically could lower LCOH by 15–20% — and create thousands of jobs in the process. 

That means: 

• Using hydrogen to decarbonise Egypt’s cement and fertiliser sectors 

• Building electrolyser and balance-of-plant capacity locally 

• Training engineers, technicians, and port operators 

• Creating SME opportunities across logistics, maintenance, and system integration 

• And embedding hydrogen projects in local economic development strategies 

The message is simple: building hydrogen in Egypt must also mean building Egypt’s hydrogen economy. 

Build electrolyser components locally. 
Train Egyptians to install and maintain them. 
Use hydrogen to clean up Egypt’s industrial base. 
Then export the rest. 

The Cairo Centre and AGHA are preparing project-level LED assessments that will be tied to new investments — ensuring that jobs, value chains, and public benefits are built in from day one. 

So — Oasis or Mirage? 

Markets will reward those who move first — and forget those who hesitate. 

Egypt has land, sun, ports, a policy framework, and political backing from the very top. 

But ambition isn’t enough. This must now become about execution — projects that close, jobs that materialise, molecules that move. 

If Egypt can crack the FID code and bring the right partners to the table, the Suez Canal could soon fuel the global energy transition. 

But the window is narrow — and the market is moving. 

The Cairo Centre Steps Forward 

The GH2 Cairo International Centre of Excellence for Green Hydrogen is gearing up to be the strategic nerve centre for Egypt’s green hydrogen transition — and a model for the wider region. Since its launch in mid-2024 at Nile University, the Centre has steadily expanded its role from a technical support facility to a full-fledged platform for policy alignment, project development, and capacity building.  

Backed by the Government of Egypt and the Green Hydrogen Organisation, and serving as the Secretariat to the Africa Green Hydrogen Alliance (AGHA), the Centre is filling a critical gap: not just in coordinating across ministries and market actors, but in translating national ambition into executable projects and ensuring learning across the continent. 

Its agenda is both ambitious and grounded. Two successful training courses and high-level workshops have already convened developers, policymakers, and financial institutions.  

Most recently, the Centre featured prominently this week at the OECD Stakeholder Conference on Egypt’s Low-Carbon Hydrogen and Transmission Grid Financing (15 April 2025), in the session titled, “Egypt’s Clean Hydrogen Project Progress and Next Steps.” The event underscored growing recognition of the Centre’s role in moving from vision to execution — particularly in aligning stakeholders and surfacing project-level challenges around permitting, infrastructure, and domestic offtake. 

The next phase is about visibility, partnerships, and delivery. The Centre is preparing to launch a finance advisory group by Q3 2025 – in collaboration with MDBs and DFIs – to support real transaction structuring and help get projects over the line. This will be essential as Egypt moves from strategy to implementation and begins to shape bankable project pipelines in earnest. 

Looking ahead, the Centre’s 2025–26 workplan is sharply focused on impact: from aligning Egypt’s certification and fiscal policies with global best practices, to building supply chain and workforce readiness, and anchoring local economic development models that ensure benefits reach communities near major project sites.  

This is no longer a conceptual hub. The Cairo Centre is fast becoming the connective link between government, industry, and finance.  

Simran Sinha,
Programme Officer, GH2