Actis, a global investor in sustainable infrastructure, has announced the signing of a memorandum of understanding (MoU) with the Egyptian government for green hydrogen development. The MoU will give Actis an entry point into what could be one of the largest hydrogen markets in the region.
· Green hydrogen to be a key enabler of the global Energy Transition, offers excellent solutions for decarbonization
· Actis’ track record in supporting the Energy Transition in MEA was a key factor in Egyptian government’s decision
The MoU will give Actis an entry point into what could be one of the largest hydrogen markets in the region. While not alone in pursuing green hydrogen, Egypt has a comparative advantage due to its renewable resources and proximity to European and Asian markets. This opportunity is an attractive proposition for Actis as it develops its hydrogen strategy and evolves the next generation of investment platforms.
Hydrogen is widely used globally in commercial industry, for example in the production of ammonia for fertilizer, methanol for plastics and in oil refining. Currently almost all of the world’s hydrogen is produced using fossil fuels, with a significant amount of carbon dioxide emitted as a byproduct of the process.
Green hydrogen is far superior from a sustainability perspective, because it is generated by electrolyzing water using renewable electricity and has zero emissions. The production cost of green hydrogen depends on two factors – the cost of renewable power and the cost of the electrolysis equipment – and is currently more expensive than fossil fuel-based hydrogen production. However, with an expected decrease in the cost of both renewable electricity and electrolyzing equipment, countries such as Egypt are seizing the opportunity to lead the way.
Dr. Sherif ElKholy, Partner and Head of Middle East and Africa for Infrastructure at Actis, commented: “Today’s signing is a continuation of our commitment to Egypt where we have a 20-year track-record of investing over US$1 billion in some of the country’s most strategically important businesses and projects to become one of the leading foreign direct investors in the country. The Egyptian government has ambitious Energy Transition plans, in addition to hosting COP27 this year, and active steps are being taken to make Egypt a major hub for green hydrogen. We look forward to deepening our partnership with the Egyptian government and contributing to their 2030 renewable energy strategy through this project and others to come.”