The European Investment Bank has taken a decisive step toward supporting Egypt’s renewable energy transformation by announcing $150 million in financing for the Obelisk solar photovoltaic project through its development arm EIB Global. The announcement coincided with the inauguration of the first phase of this landmark facility in Qena Governorate, marking a significant milestone for clean energy deployment across the African continent.
The ceremony, held in the Nagaa Hammadi area of Upper Egypt, drew high-level representation from both Egyptian and European leadership. Among those in attendance were Egyptian Prime Minister H.E. Dr. Mostafa Madbouly, EIB Global Director General Andrew McDowell, Deputy Prime Minister for Industrial Development and Minister of Transport and Industry Eng. Kamel El Wazir, Minister of Planning Economic Development and International Cooperation H.E. Dr. Rania A. Al Mashat, Minister of Electricity and Renewable Energy H.E. Dr. Mahmoud Esmat, Governor of Qena H.E. Dr. Khaled Abdel Halim, European Union Ambassador to Egypt Angelina Eichhorst, and Scatec CEO Terje Pilskog.
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A Groundbreaking Hybrid Solar Installation
Developed by Norwegian renewable energy company Scatec, the Obelisk project represents the largest hybrid solar photovoltaic development in Africa to date. The facility combines a massive 1.1 gigawatt-peak (GWp) solar photovoltaic plant with a sophisticated 100 MW/200 MWh battery energy storage system (BESS), creating a powerful combination that addresses one of renewable energy’s most persistent challenges: intermittency.
The integration of battery storage represents a crucial innovation that distinguishes Obelisk from conventional solar installations. While solar generation is inherently valuable, its variability has long posed challenges for grid operators. The battery energy storage system enables the facility to smooth generation patterns and dispatch electricity more strategically, helping operators respond to peak demand periods and reducing curtailment when solar output exceeds immediate grid needs.
This capability transforms the project from a simple generation asset into what energy infrastructure planners describe as dispatchable clean energy—renewable power that can be deployed when and where it’s needed most. For Egypt’s electricity grid, this means enhanced reliability, improved load management, and a more resilient power system capable of supporting the country’s growing industrial development and urban expansion.
Strategic Financing Architecture
The financial structure supporting Obelisk reflects the complexity and scale of modern renewable energy infrastructure development. The EIB’s commitment of $150 million represents a significant but far from solitary contribution to the project’s capital stack.
The project is being co-financed with the African Development Bank, demonstrating strong multilateral support for Egypt’s clean energy transition. Following what has been termed a “Team Europe approach,” the financing package also involves the European Bank for Reconstruction and Development (EBRD) and British International Investment (BII). This coordinated European response is further reinforced through grants, concessional financing, and an EU Neighbourhood, Development and International Cooperation Instrument (NDICI) guarantee.
This layered financing structure reflects a broader shift in how large-scale infrastructure projects are capitalized in emerging markets. Rather than relying on a single lender, contemporary clean energy developments increasingly employ diversified capital stacks designed to reduce risk, improve affordability, and accelerate delivery timelines. The inclusion of guarantees and concessional elements can make projects viable in markets where sovereign risk perceptions or macroeconomic uncertainty might otherwise raise borrowing costs beyond feasibility.
Scatec has also pursued a strategic approach to equity participation, bringing in partners at multiple ownership levels to enhance capital efficiency while retaining control of the power-producing entities. The company announced in December 2025 that Norwegian development finance institution Norfund had joined as an equity partner, with Scatec indicating it remains in advanced discussions with additional equity partners to further reduce its economic interest while maintaining operational control.
Power Purchase Agreement and Grid Integration
Electricity generated by the Obelisk facility will be sold to the Egyptian Electricity Transmission Company under a long-term power purchase agreement, providing revenue certainty for project investors while contributing to a more resilient, diversified, and sustainable national power system.
The Egyptian electricity grid has experienced record demand growth, with load recently reaching 31,000 megawatts according to government statements. This expansion reflects the country’s industrial development trajectory, urban population growth, and infrastructure investment momentum. Projects like Obelisk are essential to meeting this demand while simultaneously advancing decarbonization objectives and reducing reliance on fossil fuel generation.
The project’s location in Qena Governorate, in Upper Egypt’s southern region, positions it well to serve growing demand in this developing area while feeding power into the national grid for broader distribution. The Nagaa Hammadi area offers excellent solar irradiance conditions, with Egypt benefiting from some of the highest solar radiation levels globally—ranging from 2,000 to 3,200 kilowatt hours per square meter annually in prime locations.
Egypt’s Renewable Energy Trajectory
The Obelisk project directly supports Egypt’s ambitious target of achieving 42% renewable energy in electricity generation by 2030, with further goals of reaching over 60% by 2040. These targets represent a dramatic acceleration from current renewable energy penetration, which stood at approximately 11% of Egypt’s power mix as of 2024.
Egypt’s renewable energy strategy, outlined in the Integrated Sustainable Energy Strategy (ISES) 2035, emphasizes renewable energy as a cornerstone of the country’s energy transition. The government has revised its targets upward over time, initially setting a goal of 20% renewable electricity by 2022 (which was not achieved) and 42% by 2035, before bringing the 42% target forward to 2030 in its latest Nationally Determined Contributions (NDC).
At COP29 in November 2024, Prime Minister Mostafa Madbouly reaffirmed Egypt’s commitment to the 2030 target of 42%, though he stressed that achieving this goal remains at serious risk without increased international support. The warning reflected the substantial financial requirements of Egypt’s energy transition, with estimates suggesting the country would require approximately $250 billion by 2050 to achieve a full shift toward clean energy.
By the end of 2024, installed renewable energy capacity in Egypt reached 7,750 MW, falling short of the projected 8,778 MW goal. The deficit was largely attributed to delays in commissioning several large-scale wind and solar projects in the Red Sea and Western Desert regions. Projects like Obelisk are therefore critical not only to meeting future targets but also to making up for accumulated shortfalls.
European Partnership and Strategic Alignment
EIB Vice-President Gelsomina Vigliotti positioned the Obelisk investment within a broader framework of European-Egyptian partnership, stating: “This landmark project demonstrates how strategic European financing can accelerate Egypt’s clean energy ambitions while strengthening energy security and economic resilience. By supporting the Obelisk solar project, the EIB is investing in large-scale renewable infrastructure that delivers affordable, sustainable power, supports decarbonisation, and reinforces our partnership with Egypt under the European Union’s Global Gateway and the EU-Egypt Strategic Partnership.”
The project aligns closely with European Union priorities under REPowerEU, the bloc’s plan to rapidly reduce dependence on Russian fossil fuels and accelerate the clean energy transition. Egypt’s potential role as a renewable energy exporter to Europe through planned electricity interconnectors adds strategic significance to investments in Egyptian clean energy infrastructure.
The EU-Egypt Strategic Partnership, formalized through various cooperation frameworks, identifies energy as a priority sector for enhanced collaboration. Europe’s engagement extends beyond financing to include technical assistance, capacity building, and support for regulatory and market reforms that can accelerate renewable energy deployment.
EU Ambassador to Egypt Angelina Eichhorst emphasized this partnership dimension, describing the Obelisk project as “a shining example of how our Egyptian partners deliver clean, reliable energy, create skilled jobs and advance climate action, with the EU as a strong partner.” Her statement highlighted the multiple dimensions of value creation from renewable energy investments—not just clean electricity generation, but also employment, skill development, and climate action.
Developer Perspective and Project Execution
From Scatec’s perspective, the EIB partnership represents validation of the project’s commercial and developmental merits. CEO Terje Pilskog stated: “Scatec is very pleased to welcome the European Investment Bank as a partner in the Obelisk project. Their support is instrumental in driving forward this landmark initiative, and we are proud to be working together to strengthen Egypt’s renewable energy future.”
The statement reflects Scatec’s positioning of Obelisk as what the company has described as its largest project to start construction to date. The Norwegian developer brings considerable experience in African renewable energy markets, having developed solar, wind, and hydropower projects across multiple countries on the continent.
The project’s 2026 projected completion timeline positions it to deliver tangible contributions to Egypt’s renewable energy capacity additions in the critical period leading up to the 2030 target deadline. The early completion and inauguration of the first phase ahead of the full project commissioning demonstrates execution momentum and provides an opportunity to validate technical performance and grid integration protocols before the entire facility comes online.
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Economic and Social Impact Dimensions
Beyond its contribution to clean electricity generation, the Obelisk project carries significant economic development and social impact dimensions. Large-scale renewable energy projects create employment across multiple phases, from construction through operations and maintenance. The construction phase typically generates substantial temporary employment in civil works, electrical installation, and equipment deployment. Operational employment, while more limited, tends to be higher-skilled and longer-term.
Andrew McDowell, EIB Global Director General, emphasized these broader impacts, stating: “The inauguration of Obelisk’s first phase shows what can be achieved when strong national ambition is matched with reliable long-term financing and effective partnerships. By supporting Egypt’s first large-scale solar project with battery storage, the EIB is helping to translate climate commitments into concrete infrastructure that delivers clean electricity, builds local capacity and accelerates the energy transition.”
The emphasis on local capacity building reflects a priority in Egypt’s renewable energy development framework. Egypt’s Vision 2030 includes objectives to increase local content for large-scale projects, with businesses bidding on Egyptian energy projects expected to incorporate plans for “localization”—using local Egyptian content including labor, materials, and sub-contractors to the extent possible.
Regional Renewable Energy Context
The Obelisk project emerges within a broader context of accelerating renewable energy development across Africa and the Middle East. While solar photovoltaic installations have proliferated across the continent in recent years, projects incorporating substantial battery storage at utility scale remain relatively rare, making Obelisk particularly significant as a demonstration of integrated renewable energy and storage deployment.
Egypt already hosts one of the world’s largest solar installations at the Benban Solar Park, which currently generates 1.8 GW of electricity and is considered the third-largest solar park worldwide. Composed of 32 individual plants and four substations, Benban demonstrated Egypt’s capacity to execute large-scale solar development and established the country as a significant player in African renewable energy.
Additional major projects in Egypt’s pipeline include AMEA Power’s 2 GW development with 900 MWh of battery storage, and the Masdar/Hassan Allam Utilities/Infinity consortium’s planned expansion activities totaling 1.2 GW. These projects collectively represent billions of dollars in investment and thousands of megawatts of clean generation capacity.
Wind energy also features prominently in Egypt’s renewable strategy. The Gulf of Suez and Nile Valley regions offer high wind speeds averaging 8-10 meters per second, supporting ambitious wind capacity targets of 14 GW by 2030. Several large-scale wind projects are currently under development, including what has been described as Africa’s largest wind project at 1 GW in the Gulf of Suez.
Green Hydrogen Ambitions and Energy Export Potential
Beyond domestic electricity generation, Egypt is positioning itself as a potential hub for green hydrogen production, which could represent a major export commodity leveraging the country’s abundant renewable energy resources. According to International Energy Agency projections, Egypt could produce green hydrogen for under $2 per kilogram by 2030, making it competitive in emerging global hydrogen markets.
The Suez Canal Economic Zone has been identified as a strategic location for green hydrogen development, with companies including Siemens and Scatec working on facilities capable of producing substantial volumes. However, green hydrogen development presents a complex trade-off: diverting renewable energy to hydrogen production reduces the energy available for the domestic grid, where natural gas remains dominant. Egypt must balance its aspirations to become a green hydrogen exporter with the imperative to decarbonize its domestic electricity system.
Egypt is also advancing plans for multiple electricity interconnection projects that could position the country as a renewable energy exporter to Europe and regional markets. The GREGY Interconnector, a strategic undersea cable project backed by the EU’s Global Gateway initiative, will transmit 3,000 MW of renewable energy from Egypt to Europe via Crete. Expected to be operational by 2030 with an estimated cost of $4.5 billion, the interconnector represents a tangible pathway for Egyptian renewable energy to reach European markets.
Additional interconnector projects are in development with Italy (3,000 MW capacity, approximately $20 billion estimated cost) and through AMEA Power (3,000 MW as part of a $3 billion investment package). These interconnection plans reflect Egypt’s strategic positioning at the crossroads of African, Middle Eastern, and European energy systems.
Technical Innovation and Grid Modernization Requirements
The successful integration of projects like Obelisk requires substantial investment in grid infrastructure and modernization. Egypt’s transmission and distribution networks were largely designed for centralized thermal power generation rather than distributed renewable energy with variable output. Accommodating high penetrations of solar and wind power necessitates grid reinforcement, enhanced flexibility, and sophisticated control systems.
The Egyptian government has been working to strengthen the national electricity grid to handle the targeted renewable energy capacity additions through 2030 and beyond. Minister of Electricity Mahmoud Essmat has presented detailed studies on grid enhancement requirements to accommodate renewable capacity growth while maintaining reliability and power quality.
The battery storage component of Obelisk provides inherent grid support capabilities, offering services such as frequency regulation, voltage support, and reserve capacity that can help stabilize the network as renewable penetration increases. These ancillary services become increasingly valuable as the share of variable renewable generation grows, potentially justifying premium compensation for storage-enabled facilities beyond simple energy sales.
Financial Viability and Economic Competitiveness
The economics of solar photovoltaic generation in Egypt have improved dramatically in recent years. According to government data, the latest power purchase prices for solar-produced electricity have fallen to approximately 1.8 cents per kilowatt-hour, down from 6-7 cents/kWh in earlier project rounds. This price decline reflects both global cost reductions in solar photovoltaic technology and Egypt’s excellent solar resource quality.
The price structure for renewable energy power purchase agreements typically includes provisions for payment in both local and foreign currency (often 25% Egyptian pounds and 75% foreign currency) to manage currency risk for international investors and lenders. This dual-currency approach has become standard in Egyptian renewable energy contracting, balancing the needs of foreign investors for hard currency revenue with Egypt’s objectives to limit foreign exchange outflows.
Battery storage adds capital cost but also creates value through enhanced dispatchability, grid services, and the ability to capture higher prices during peak demand periods. The 100 MW/200 MWh configuration at Obelisk provides two hours of discharge duration, a common specification for utility-scale battery systems designed to support daily load-shifting applications.
Climate Action and Emissions Reduction Impact
The Obelisk project contributes directly to Egypt’s climate action commitments under the Paris Agreement and the country’s updated Nationally Determined Contributions. Large-scale displacement of fossil fuel generation with renewable energy delivers measurable emissions reductions that support both national and global climate objectives.
According to data from the New and Renewable Energy Authority, Egypt’s existing renewable energy infrastructure has contributed to a reduction of 1.2 million tons of CO2 emissions annually. Projects of Obelisk’s scale can be expected to deliver comparable or larger emissions reductions when displacing natural gas or heavy fuel oil generation.
Egypt’s participation in international climate negotiations has emphasized the principle of climate justice, with officials noting that Africa contributes less than 4% of global emissions despite being disproportionately vulnerable to climate impacts. This context frames renewable energy development in Egypt as both a mitigation strategy and an adaptation priority, building resilience through energy diversification and security.
Challenges and Implementation Risks
Despite the strong support and favorable momentum, Egypt’s renewable energy transition faces significant challenges. Macroeconomic pressures, including currency volatility, inflation, and fiscal constraints, can complicate project financing and implementation. Egypt has experienced periodic energy subsidy reforms that have affected electricity tariffs and the economic viability of various generation technologies.
Project execution risks remain present, as evidenced by the shortfall in 2024 renewable capacity additions relative to targets. Delays in land allocation, permitting processes, and grid connection approvals can extend project timelines and increase costs. The deficit of approximately 1,000 MW in 2024 renewable capacity additions underscores the gap between announced projects and commissioned capacity.
The challenge of achieving the 42% renewable energy target by 2030 is substantial. Even with successful completion of announced projects, significant additional capacity will be required. The government will need to accelerate installation rates beyond recent historical performance to meet its stated objectives.
International support, while substantial, may not be sufficient to fully finance the required investment. Egyptian officials have indicated that meeting the country’s renewable energy and climate targets will require hundreds of billions of dollars in investment through mid-century, far exceeding currently committed international financing.
Looking Ahead: Trajectory and Implications
The inauguration of Obelisk’s first phase and the EIB’s financing commitment represent tangible progress in Egypt’s renewable energy development trajectory. The project demonstrates that utility-scale renewable energy with integrated storage can be financed, constructed, and commissioned in emerging markets with appropriate international support and effective partnership structures.
For contractors, equipment suppliers, and service providers across the renewable energy value chain, Egypt’s ambitious targets signal sustained market opportunity. Companies capable of delivering projects safely, efficiently, and in compliance with international standards are likely to find growing demand across Egypt and the broader Middle East and North Africa region.
The success or failure of projects like Obelisk in meeting performance expectations, delivery timelines, and financial projections will influence investor confidence in subsequent Egyptian renewable energy opportunities. Demonstrated operational success can create a virtuous cycle of increased investment, reduced financing costs, and accelerated deployment.
From a geopolitical perspective, Egypt’s renewable energy development carries implications for regional energy dynamics, European energy security, and North-South cooperation on climate action. The country’s potential evolution from an energy importer dependent on natural gas to a renewable energy exporter would represent a fundamental shift with broad strategic ramifications.
The Obelisk project, as Africa’s largest hybrid solar photovoltaic installation, serves as a proof point for what coordinated international partnerships, strategic financing, and national policy alignment can achieve in advancing renewable energy deployment. Its success—measured not just in megawatts of capacity but in reliable electricity delivery, emissions reductions, economic benefits, and demonstration effects for future projects—will be watched closely by stakeholders across the global renewable energy sector.
As Egypt continues pursuing its ambitious 2030 renewable energy targets amid challenging economic and political conditions, projects like Obelisk represent more than infrastructure investments. They embody aspirations for economic transformation, climate action, energy sovereignty, and participation in the global clean energy transition that is reshaping power systems worldwide.
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By: Montel Kamau
Serrari Financial Analyst
20th January, 2026
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