Egypt's solar power revolution and what's next

Written by
6 Jun 2025
Egypt's solar power revolution and what's next

The Benban Solar Park stands as a testament to Egypt's solar ambitions. This massive installation currently has a capacity of 1.8 gigawatts (GW), making it one of the world's largest solar installations. The park represents Egypt's ability to execute world-class renewable energy projects at scale.

Egypt's solar revolution gained unprecedented momentum following the energy crisis of 2024, when rolling blackouts during the sweltering summer exposed the vulnerability of the nation's energy infrastructure. 
Egypt had to spend over $1 billion more than expected for imported liquefied natural gas (LNG) last year, with analysts estimating billions more in spending for 2025.

This crisis was a big wake-up call for Egypt and has accelerated the country’s pivot towards solar energy. The Ministry of Planning, Economic Development and International Cooperation says the country has 34 projects within its portfolio that address Sustainable Development Goal #7 (SDG 7) which aims to ensure access to affordable, reliable, sustainable and modern energy for all. 

Among  these projects, $5.95 billion worth of developments focus on affordable and clean energy, while a further $677 million will finance renewable energy and electricity initiatives.

The Benban Solar Park stands as a testament to Egypt's solar ambitions. This massive installation currently has a capacity of 1.8 gigawatts (GW), making it one of the world's largest solar installations. The park represents Egypt's ability to execute world-class renewable energy projects at scale.

Egypt's solar potential is exceptional, as the country boasts some of the highest solar irradiance levels in the world, ranging from 2,000 to 3,200 kilowatt hours (kWh) per square meter annually. With more than 3,500 hours of sunshine per year and ample open space, regions such as the Western Desert and Upper Egypt hold vast, untapped potential for solar energy development.

Ambitious Targets and Current Progress

Egypt's renewable energy strategy forms a cornerstone of its Vision 2030 sustainable development plans.  It has reaffirmed its target of generating 42% of electricity from renewable sources by 2030. However, current renewable capacity remains significantly below these targets. Solar, wind and hydropower currently generate 11.5% of Egypt's electricity mix, while its renewable capacity has stagnated at under 12% of the country’s total 60 GW capacity.

The Egypt Energy Overview Report 2025 confirms Egypt's commitment to its Integrated Sustainable Energy Strategy 2035, which calls for renewables to make up 42% of the electricity mix by 2035. The report also notes Egypt's commitment to reducing emissions by 65% in the oil and gas sector and 7% in the transportation sector by 2030.

Major Solar Projects Accelerating Development

Several major solar projects are driving Egypt's renewable transformation:

AMEA Power Projects: AMEA Power inaugurated a $500 million, 500-megawatt solar array in Aswan in December 2024. The company plans to build a second, 1,000-megawatt plant nearby, advancing $300 million of its own funds to start construction before final financing is arranged, with production expected to begin by Q1 2026.
The AMEA Power has additional plans for a 2 GW project with 900 megawatt hours (mWh) of battery storage, representing one of the largest integrated solar and storage projects in the region.

Masdar/Hassan Allam/Infinity Consortium: This partnership has announced multiple significant projects. It plans a 300 MW expansion at Benban alongside a 900 MW project at Dakhla Oasis (1.2 GW in total). In November 2024, the consortium signed an agreement to generate 1,200 megawatts of power.

Other significant developments in Egypt include the Abydos Kom Ombo Solar PV Park, a 500 MW facility; and the Masdar consortium deal that will feature over 6 GW of new solar capacity, 4 GW of new solar manufacturing capacity, and 2 GW of new battery manufacturing capacity.

In addition, Norway-based Scatec signed an agreement in September 2024 for a 1,000-megawatt project, further diversifying Egypt's solar development portfolio.

Grid Infrastructure and Regulatory Challenges

Despite impressive project announcements, Egypt faces significant infrastructure challenges. The country's electrical grid is currently incapable of integrating large-scale renewable energy projects, highlighting the urgent need for grid upgrades and energy storage systems.

Regulatory barriers also persist. Fragmented oversight of the energy sector, coupled with protracted permitting processes and systemic inefficiencies, discourages investments and delays project timelines.

The Role of Energy Subsidies

A major obstacle to solar adoption remains Egypt's energy subsidy system. Fuel subsidies from the Egyptian government are estimated at seven billion dollars annually, distorting energy markets and making renewables less competitive compared to fossil fuels.

Meanwhile, multiple layers of subsidies distort the true cost of electricity. For instance, state-owned EGPC buys gas from local producers at less than market price, then sells it to power stations at a further discount. State distributors then sell electricity to the final consumer at lower prices again.

However, Egypt's $8 billion financial support deal with the International Monetary Fund, signed in March 2024, includes a pledge to reduce energy subsidies. Industry experts predict this will accelerate solar adoption. 

Private Sector Engagement and New Regulations

Egypt has taken steps to encourage private sector participation in solar development. In early 2024, the government enacted a private-to-private law that allows power producers to provide electricity directly to businesses such as factories, though initially it will only accept 500 megawatts' worth of projects countrywide.
However, regulatory restrictions continue to limit residential solar adoption. Domestic consumers are currently restricted from installing two-way electricity meters unless they own their entire building, preventing apartment dwellers from supplying power back to the grid.

Green Hydrogen: The Next Frontier

Egypt is positioning itself as a future leader in green hydrogen production. The Suez Canal Economic Zone has been identified as a hub for green hydrogen development, with Siemens and Scatec working on a facility capable of producing one million tons annually by 2035.

However, Egypt faces a critical dilemma - diverting renewable energy to hydrogen production reduces the energy available for the domestic grid. Experts say Egypt needs to stabilize its domestic energy supply and reduce its reliance on fossil fuels for electricity generation.

Investment Requirements and International Support

The scale of Egypt's renewable energy ambitions requires substantial investment. The Egypt Energy Overview Report 2025 cites the International Finance Corporation's assessment that Egypt needs $174 billion in climate-smart investments by 2030.

The government's Nexus of Water, Food, and Energy program aims to add 10 GW of renewable capacity with an investment of ten billion dollars. Additionally, Egypt's nationally determined contributions (NDC) are conditional on receiving international funding of $73 billion for 2020-30, as noted in the Egypt Energy Overview Report.

The Path Forward

Egypt's solar revolution is at a critical juncture. With abundant solar resources, major projects in development, and increasing economic pressure from expensive gas imports, the conditions are aligned for rapid solar expansion.

However, success depends on addressing key challenges:

  1. Grid Infrastructure: Urgent investment in transmission and storage capacity
  2. Regulatory Reform: Streamlining permitting processes and removing barriers to private sector participation
  3. Subsidy Reform: Gradual reduction of fossil fuel subsidies to create a level playing field
  4. Financing: Mobilizing the billions needed for infrastructure development

The transformation from an energy crisis in 2024 to a potential renewable energy powerhouse demonstrates both the urgency and opportunity of Egypt's solar revolution. With continued commitment and strategic execution, Egypt's abundant sunshine could indeed become the foundation for a sustainable energy future.
 

Middle East & North Africa Energy Outlook Report 2025

This must-have report for industry players offers a comprehensive analysis of the latest technological advancements and forecasts for the energy landscape in one of the world's most pivotal regions, the Middle East and North Africa.

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