Industry decarbonisation is a key priority for Egypt’s policymakers and industry actors. Green hydrogen is emerging as one of the promising solutions to support this ambition, aligned with Egypt’s Vision 2030 and the Nexus of Water, Food and Energy platform, which – among other objectives – aims to decommission 5 gigawatts (GW) of inefficient fossil-fuel capacity and deploy 10 GW of renewable energy. To meet the climate targets outlined in Egypt’s updated Nationally Determined Contribution (NDC) of 2023 and reduce industrial carbon dioxide emissions, the country will need to significantly scale up green hydrogen deployment and mobilise substantial investment and financing. Advancing decarbonisation will not only help achieve climate goals but also strengthen the competitiveness and resilience of Egypt’s industrial sector in global markets, particularly as mechanisms such as the European Union’s Carbon Border Adjustment Mechanism (EU CBAM) increase demand for low-carbon industrial goods.
Egypt has made notable progress in establishing a regulatory framework for green hydrogen development, including the creation of the National Council for Green Hydrogen and its Derivatives in 2023 and the launch of the National Low-Carbon Hydrogen Strategy in 2024. Despite these advances, low-carbon hydrogen – like many other low-carbon technologies that are critical for industry decarbonisation – remains at an early commercialisation stage in Egypt, as in most countries. High capital expenditure across the value chain and elevated financing costs, driven by multiple risks, limit quick returns on investment and make private capital providers hesitant to engage. To enable projects to reach final investment decisions and mobilise private capital, Egypt will need to further strengthen investment conditions through a mix of de-risking measures and tailored financing instruments.
This report, developed under the Egypt–OECD Country Programme, supports the implementation of Egypt’s National Low-Carbon Hydrogen Strategy by providing targeted financial solutions and investment enablers to improve project bankability and accelerate investment decisions. Like many emerging markets and developing economies, Egypt faces persistent barriers to private sector participation, including limited access to affordable finance, grid constraints, infrastructure gaps and skill shortages. The solutions proposed in this report aim to mitigate risks and unlock opportunities for investment.
Drawing on a techno‑economic assessment, the report provides a range of levelised production cost estimates for hydrogen and its derivatives (green ammonia, green iron and e-methanol) and explores possible optimal site configurations. For example, the analysis shows that Egypt has strong potential to competitively produce these derivatives for export to the European Union. The same hydrogen could also be used domestically and contribute to decarbonising Egypt’s industry. In high‑resource areas, the Levelised Cost of Hydrogen can be as low as USD 3.7 per kilogramme under current conditions. This is, however, still higher than the cost of fossil fuel‑based hydrogen in many countries. Closing the cost‑competitiveness gap will require lowering upfront costs for electrolysers and storage, streamlining regulations and grid integration, improving access to concessional and blended finance and expanding domestic manufacturing of hydrogen equipment. Over time, technological learning, economies of scale and supportive policies are expected to help reduce capital costs.
Investment needs are substantial. Given the capital‑intensive nature of green hydrogen production, scaling Egypt’s green hydrogen sector to an annual capacity of 1.5 million tonnes is estimated to require approximately USD 45.6 billion in cumulative investment between 2025 and 2030. By the end of 2025, around 30 Memoranda of Understanding (MoUs) for green hydrogen and related projects have been signed in Egypt’s Suez Canal Economic Zone, with expected early investment already exceeding ten billion dollars. Further work is needed to translate these commitments into final investment decisions. The analysis highlights that scaling up green hydrogen production also requires embedding ongoing reform efforts within wider considerations for hydrogen development. This includes, among others, advancing on power sector reforms, investing in common‑user infrastructure and strengthening local skills development and manufacturing to ensure broad‑based sustainable development.