Egypt is leading the transition towards renewable energy
Egypt leads the transition towards renewable energy
At a time when countries around the world are seeking to reduce dependence onfossil fuels, Egypt is moving steadily towards a future that depends on renewable energy sources, through huge investments, unprecedented facilities for investors, and giant projects that reflect a clear vision towards transitioning to renewable energy sources.
In this article, Earth Guards sheds light on the latest achievements that Egypt has achieved in this field, documenting the progress it has made, and reviewing the impact of these efforts in achieving Sustainable Development Goals (SDGs) and anticipating the future of energy in the region and the world. How was Egypt able to achieve this leap in the renewable energy sector? What challenges and opportunities does it face in its journey towards sustainability? Read on to discover the details.
Egyptian Sustainability Path
Egypt continues its rise in the renewable energy race - according to a report issued by Ernst & Young, one of the largest international companies specialized in economic policy analysis - it has jumped to 34th place globally in the ranking of countries most attractive to investment in the renewable energy sectorRenewable Energy by June 2024, and this jump, which has advanced five places since 2015, is not just numbers, but rather strong evidence. Egypt’s transformation into a regional power in the field of clean energy, thanks to ambitious strategies and huge investments that shape a more sustainable future.
This progress was not a coincidence, but rather the result of thoughtful policies and ambitious plans developed by the Egyptian government. To support its transition towards clean energy, the Egyptian Cabinet report stated that the country recorded a qualitative leap in the global energy index issued by the World Energy Council, which is an index that reflects the ability of countries to achieve a balance between the stability of energy supplies, its cost, and the extent of its compatibility with environmental sustainability standards. It has risen 31 places in less than a decade, achieving 54th place globally in 2023 after it was in 85th place in 2014, which strengthens Egypt’s position as one of the leading countries in this field. Field.
The credit rating agency “Fitch” revealed that the future of the energy sector in Egypt holds promising prospects, supported by tremendous growth potential and government initiatives that push towards reducing dependence on natural gas, with a focus on solar energy and wind energy as the two main pillars of this transformation.
Egypt’s goals in the field of clean energy
Within the framework of “Egypt Vision 2030” for sustainable development, the government developed an integrated and sustainable energy strategy, which aims to raise the contribution of renewable energy to 42% of the total energy mix by 2030, reaching more than 60% by 2040. These goals reflect Egypt’s commitment to enhancing sustainability and reducing carbon emissions, in line with global efforts to combat climate change, and contribute to achieving Goal (13) of the United Nations Sustainable Development Goals (SDGs) “Work Climate."
As for implementation, the renewable energy sector in Egypt has witnessed rapid growth, with the total capacity that has been operated or is being implemented reaching about 22.8 gigawatts, which reflects a major jump compared to previous years. The installed capacity of solar energy, hydropower, and wind energy increased by 110.1%, reaching 7,331 megawatts in October 2024, after it was only 3,490 megawatts in 2013-2014, and the total capacity is expected to reach 10,000 megawatts by the end of 2025. These goals reflect Egypt’s commitment to achieving Goal (7) of the Sustainable Development Goals (SDGs), which calls for providing clean energy. Sustainable and affordable for all.
It is worth noting that “Egypt Vision 2030” is not limited to achieving self-sufficiency in renewable energy only, but rather extends to becoming a regional center for exporting clean electricity to neighboring countries. This opens the door to international partnerships and huge investments that strengthen its position in the sustainable energy market.
Attracting investment
Within the framework of attracting foreign investments in the field of renewable energy, Egypt has been keen to provide an attractive investment environment that allows the private sector the opportunity to participate effectively in this transformation, and one of the most prominent incentives provided by the government is the allocation of 42.6 thousand square kilometers to establish renewable energy projects, which is a vast area that can accommodate huge investments in the field of solar and wind energy.
To reduce the financial burden on investors, the government adopted incentive measures that included granting land in exchange for 2% of the electricity produced annually, in addition to reducing customs on components and spare parts for equipment used in renewable energy from 5% to 2%, and the value-added tax on these projects was reduced from 14% to 5%, in a step aimed at reducing operational costs and increasing the return on investment.
As part of its efforts to support the expansion of clean energy projects, the Egyptian government approved investment incentives of up to 50% of the investment costs of new projects or their expansions, in accordance with Article 11 of the Investment Law. The incentives were not limited to tax facilities only, but more than $4.5 billion in soft financing was provided to the private sector since 2022, with the aim of supporting the implementation of renewable energy projects with a capacity of 4.7 gigawatts within the “Novi” program, which is one of the main programs that promotes the transition towards sustainable energy in Egypt. These measures are consistent with global efforts to achieve Goal (9) of the Sustainable Development Goals (SDGs) “Industry, Innovation and Infrastructure”, which focuses on developing sustainable infrastructure and stimulating investment in innovation and clean technology.
Mega projects
In parallel with the investment incentives, Egypt is witnessing the implementation of a number of giant projects in the field of generating electricity from wind, which are expected to contribute significantly to enhancing the local production of clean energy. These projects include the implementation of wind farms with a total capacity of up to 1,750 megawatts, and are scheduled to be completed by 2026. One of the most prominent of these projects is the “Amont” wind farm farm, whose capacity reaches 500 megawatts; Which contributes to achieving self-sufficiency and enhancing the export of electricity to regional markets.
In conclusion, Egypt’s progress in the field of renewable energy is a pivotal step towards a more sustainable future at the regional and international levels, and Earth Guards values these ambitious efforts that reflect a real commitment to achieving a balance between economic development and environmental sustainability. With the continuation of these investments and policies, the hope remains to enhance innovation and increase societal awareness of the importance of transitioning to clean energy, in pursuit of a more sustainable future. Stability and efficiency in resource management.
