EBRD to help finance Egypt's transition from gas to wind power

The European Bank for Reconstruction and Development (EBRD) will help finance the decommissioning of 5 GW of inefficient gas-fired power plants in Egypt from 2023 and commit up to $1 billion for renewable energy, its regional director said on Sunday.

The EBRD will provide up to $300 million in sovereign financing for projects such as stabilizing Egypt's grid, adding battery storage, developing the local supply chain for renewables, and retraining workers, said Heike Harmgart, the EBRD's managing director for South and Eastern Mediterranean. He added that the $1 billion pledged for renewable energy would be about a tenth of the private financing needed for the 10 GW of predominantly wind-powered projects the government has planned by 2028. Egypt is a natural gas producer that is trying to reduce its domestic consumption in order to export more to Europe during a period of high prices and demand caused by Russia's invasion of Ukraine. An energy surplus was created after the construction of three large natural gas power plants by Siemens in 2015. The government hopes gas exports can help contain pressure on Egypt's currency after the Ukraine war triggered a recent drop in dollar inflows from portfolio investments and tourism. The role of gas will also be a topic of discussion at the COP27 climate summit in Egypt in November. Climate activists call for a rapid transition away from gas. By hosting COP27, Egypt is giving a voice to some African countries that want to continue using gas as a transition fuel to develop their economies. Harmgart said about 3GW of the planned 10 GW of new renewable energy could be used for a pilot phase of green hydrogen production in Egypt's Red Sea port of Ain Sokhna. Some will be used to replace capacity lost through the decommissioning of thermal power plants. Egypt has announced a series of memoranda of understanding for green hydrogen and ammonia projects at Ain Sokhna. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!