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Title page 1

Contents 8

Foreword 4

Acknowledgements 6

Abbreviations and acronyms 12

Executive summary 16

1. Unlocking low-carbon hydrogen investment in Egypt: scene-setting 19

1.1. Context and objective 20

1.2. Framework implementation process in Egypt 21

1.2.1. Description of the Framework 21

1.3. Egypt's country context 24

1.3.1. Macroeconomic conditions 25

1.3.2. Egypt's financial sector 26

1.3.3. Egypt's energy landscape 27

1.3.4. Egypt's industry sector 29

1.3.5. Country strategy, policies and mechanisms 31

1.4. Egypt's low-carbon hydrogen ambition 35

1.4.1. Egypt's green hydrogen project landscape 35

References 39

Notes 46

2. Assessing cost competitiveness of low-carbon hydrogen and green derivatives in Egypt 48

2.1. Objective and methodology 49

2.2. Analytical scope 50

2.2.1. Green hydrogen production system 50

2.2.2. Scenarios for green hydrogen production 52

2.3. Blue hydrogen 54

2.4. Caveat on green hydrogen and blue hydrogen 56

2.5. Results 57

2.5.1. Green hydrogen 57

2.5.2. Blue hydrogen 60

2.6. Green hydrogen derivatives 61

2.6.1. Green ammonia 61

2.6.2. Green steel: green iron for export to the European Union 64

2.6.3. E-methanol 66

2.7. Key findings and conclusions 69

References 71

Notes 73

3. Assessing financial solutions for low-carbon hydrogen in Egypt 74

3.1. Objective 75

3.2. Required infrastructure for green hydrogen production in Egypt 75

3.2.1. Renewable energy and battery energy storage systems 75

3.2.2. Transmission grid and hydrogen pipelines 75

3.2.3. Electrolyser 77

3.2.4. Desalination 77

3.2.5. Port infrastructure for export of low-carbon hydrogen and its derivatives 77

3.3. Assessing the investment needs 78

3.4. Identifying financial solutions and enabling investment conditions 79

3.5. Key assumptions: impact of different risk mitigation instruments 82

3.5.1. Green premium 82

3.5.2. CAPEX grant 82

3.5.3. Concessional loans 83

3.5.4. Carbon price 83

3.6. Impact of different instruments on the Levelised Cost of Hydrogen 84

3.7. Summary and conclusions 88

References 91

Notes 94

4. Financial solutions and enabling investment conditions 95

4.1. Objective 96

4.2. Identified financial solutions and recommendations for improving the enabling investment conditions 96

4.2.1. Targeted use of CAPEX grants 97

4.2.2. Mitigating FX currency risk through participation of domestic banks 98

4.2.3. Addressing offtake risk: contract-for-difference 99

4.2.4. Power sector reform as a foundation for green hydrogen investment 102

4.2.5. Prioritise investment in common user infrastructure, ensuring both accessibility and high quality 104

4.2.6. Strengthen the skillset and domestic industry 107

4.3. Conclusions and areas of future analysis 108

References 109

Notes 111

Annex A. Methodology and input data 112

Methodology 112

Input data 113

References 117

Annex B. Techno-economic assessment results 119

Objective 119

Green hydrogen: Scenario A 119

Green hydrogen: Scenario B 125

Green hydrogen: Scenario C 126

Green hydrogen: Scenario D 127

Blue hydrogen 129

Annex C. Investment need assessment 134

Objective 134

Result 134

Annex D. Investment survey 135

Objective 135

Survey methodology 135

Annex E. Framework consultation process 137

Objective 137

Framework implementation process 137

Tables 9

Table 1.1. Policies relevant to Egypt's energy transition and industry decarbonisation 32

Table 1.2. Policies relevant to Egypt's low-carbon hydrogen development 37

Table 2.1. Proposed economic assumptions of green hydrogen production 52

Table 2.2. Renewable power generation potential in the selected locations 52

Table 2.3. Optimised renewable energy sources/electrolyser nominal capacity ratio 59

Table 2.4. Cost breakdown of proposed scenarios per tonne of Direct Reduced Iron 66

Table 2.5. Proposed economic assumptions of scenarios for e-methanol production 69

Table 3.1. Results of optimisation model under Scenario B to produce 1.5 Mt H₂ per year 84

Table 3.2. Overview of instrument effectiveness 88

Table 3.3. Cost impact of selected instruments 89

Table 4.1. Summary of recommendations 96

Figures 10

Figure 1.1. The step-by-step approach of the OECD Framework implementation process 22

Figure 1.2. Electricity remains the largest CO₂ emitter in Egypt 28

Figure 1.3. Egypt's industry relies heavily on fossil fuels, with a low share of renewables 29

Figure 1.4. Green hydrogen and derivatives projects in Egypt, 2025 snapshot 36

Figure 2.1. Green hydrogen production: system configuration 50

Figure 2.2. The four proposed scenarios for green hydrogen production 54

Figure 2.3. Blue hydrogen production via steam methane reforming: system configuration 55

Figure 2.4. Blue hydrogen production via autothermal reforming: system configuration 56

Figure 2.5. Sensitivity analysis at 98% dedicated renewable energy sources 58

Figure 2.6. Levelised Cost of Green Hydrogen for the four proposed scenarios 59

Figure 2.7. Levelised Cost of Green Hydrogen with different storage options 60

Figure 2.8. Levelised Cost of Blue Hydrogen production for the proposed cases 61

Figure 2.9. Green ammonia for local storage: system configuration 62

Figure 2.10. Green ammonia for export 63

Figure 2.11. Green ammonia: impact of the NH₃ synthesis minimum capacity factor 64

Figure 2.12. Three proposed scenarios for green iron export to the European Union 65

Figure 2.13. Levelised Cost of Green Iron for the three proposed scenarios 66

Figure 2.14. E-methanol production: system configuration 68

Figure 2.15. Levelised Cost of E-methanol for the three proposed scenarios 69

Figure 3.1. Initial investment cost for green hydrogen production 78

Figure 3.2. Findings from the OECD investor survey in Egypt 80

Figure 3.3. Instrument effectiveness in reducing the cost of green hydrogen 85

Figure 3.4. Instrument effectiveness in reducing the cost of e-methanol 86

Figure 3.5. Instrument effectiveness in reducing the cost of green iron 87

Figure 3.6. Impact of multiple instruments to close the cost-competitiveness gap 89

Figure 4.1. Leveraging CAPEX grants and local currency loans for green hydrogen 99

Figure 4.2. H2Global replicability tailored to the Egyptian context 101

Figure 4.3. Tax revenue from the simulated H2Global renewable ammonia auctions 101

Figure 4.4. Peer-to-peer pooling structure for green hydrogen in Egypt 104

Boxes 10

Box 1.1. Egypt's Green Hydrogen Technical Advisory Executive Committee under the National Cabinet of the Prime Minister 24

Box 1.2. The Nexus of Water, Food and Energy Platform 26

Box 1.3. Carbon border measures in the European Union and the United Kingdom 31

Box 3.1. Impact of guarantee and concessional loan on competitive gap analysis 81

Box 3.2. Integrating multiple instruments: A practical example 89

Box 4.1. Blue Dot Network, Infrastructure Certification Scheme 107

Annex Tables 9

Table A A.1. Green hydrogen production, techno-economic assumptions 114

Table A A.2. Blue hydrogen production, techno-economic assumptions 115

Table A A.3. Ammonia-related systems, techno-economic assumptions 116

Table A B.1. Operating conditions for SMR with post combustion CCS plant 130

Table A B.2. Computed KPIs for SMR with post combustion CCS plant 130

Table A C.1. Green hydrogen system components optimised sizing for the Scenarios B and C 134

Annex Figures 10

Figure A A.1. Duration curves for wind and solar power generation for Suez area in 2019 112

Figure A B.1. Scenario A: impact of the absence of H₂ storage (BESS only) 120

Figure A B.2. Scenario A: results in the absence of H₂ storage 121

Figure A B.3. Scenario A: LCOH varies with BESS CAPEX at 98% dedicated RES 121

Figure A B.4. Scenario A: LCOH decreases with higher H₂ storage capacity 122

Figure A B.5. Scenario A: LCOH decreases with higher RES to electrolyser nominal power ratio 123

Figure A B.6. Scenario A: LCOH varies with different storage options 124

Figure A B.7. Scenario A: initial per different storage options 124

Figure A B.8. Scenario B - LCOH decreases with higher H₂ storage capacity 125

Figure A B.9. Scenario 2 - estimated LCOH for current and future scenarios 126

Figure A B.10. Scenario C: LCOH decreases with higher H₂ storage capacity 127

Figure A B.11. Scenario D: LCOH increases with a larger share of dedicated renewable energy sources 128

Figure A B.12. Scenario D: LCOH decreases with a larger H₂ storage capacity 128

Figure A B.13. Steam methane reforming with carbon capture plant for blue hydrogen production 129

Figure A B.14. Autothermal reforming with combustion carbon capture plant for blue hydrogen production 131

Figure A B.15. Levelised Cost of Hydrogen for the two different simulated plants 132

Figure A B.16. Cost of CO₂ avoided for the two simulated plants 132

Figure A B.17. Breakdown of the initial investment for blue hydrogen production 133