Egypt has initiated a significant renewable energy project, representing an important move towards decreasing dependency on fossil fuels and tackling persistent power shortages. The nation has begun the development of its inaugural large-scale hybrid solar and battery storage plant, situated in Nagaa Hammadi, a region recognized for its plentiful sunshine. This pioneering endeavor, named Obelisk, will integrate solar power with battery storage, enhancing the reliability and sustainability of energy.
The $590 million project is being led by Scatec, a Norwegian company specializing in promoting renewable energy in growing markets. Obelisk will supply 1.1 gigawatts (GW) of solar power combined with 200 megawatt-hours (MWh) of battery storage, ensuring a steady energy source even when sunlight is unavailable.
Egypt, historically reliant on natural gas to generate electricity—with roughly 75% sourced from this energy type—has been grappling with an escalating power shortage in recent times. The country has seen a drop in domestic gas output, while climbing global rates have compelled it to purchase fuel at steep prices. The ensuing strain on Egypt’s power grid has led to regular outages, leading to urgent demands for immediate resolutions.
Scatec is no stranger to Egypt’s energy landscape, having previously implemented four renewable energy projects in the country. But Obelisk stands out for its scale and technological integration. As Terje Pilskog, CEO of Scatec, notes, energy security is not only about generation—it’s about independence from volatile fuel markets. “Renewables offer predictability,” Pilskog explains. “You’re not subject to fuel imports or price shocks.”
To tackle its expanding energy issues, Egypt has pledged to boost the proportion of renewables in its energy composition. The authorities aim to elevate the present 13% share of renewable energy to 42% by 2030. Although these goals are bold, they are deemed essential for decreasing dependence on fossil fuels, particularly as production from significant sites like the Zohr gas field declines.
As a component of this shift, Egypt launched a tender around mid-2024 to acquire almost two million tons of fuel oil to handle the high demand during the summer peak, which puts pressure on the electricity system as temperatures frequently surpass 40°C (104°F) in the southern areas. Prime Minister Mostafa Madbouly has encouraged people to save energy to assist in reducing more power outages.
But even as Egypt explores new domestic gas sources, it is increasingly looking to its geographical advantages. The southern part of the country sits within what experts call the “Magic Solar Belt,” a region with some of the highest solar irradiance levels in the world. According to the Global Solar Atlas, Egypt ranks fourth globally in photovoltaic (PV) potential. This prime location makes the Obelisk project especially promising.
Karim Elgendy, the executive director of the think tank Carboun Institute, which concentrates on the Middle East and North Africa, emphasizes the both economic and strategic importance of Obelisk. “This goes beyond being merely an environmental effort,” he states. “It represents an investment motivated by economic considerations. Such projects have the potential to showcase the feasibility of solar-plus-storage solutions in emerging nations.”
Traditionally, solar energy’s primary weakness has been its intermittency—it only produces power during daylight hours. However, the falling costs of battery storage are changing that. Since 2010, the price of large-scale battery storage projects has dropped by 89%, driven in part by manufacturing scale-ups in countries like China. As a result, hybrid plants that combine solar power with storage have become significantly more feasible.
Indeed, the Global Solar Council anticipates that by 2027, solar paired with battery systems will be the most cost-effective means of generating electricity worldwide. Nevertheless, regardless of this promise, Africa is still not prominently featured in the worldwide rollout of battery storage. Out of the projected 363 gigawatt hours (GWh) of global storage capability in 2024, only 1.6 GWh is attributed to Africa.
This disparity highlights a broader challenge—financing. Despite the fact that renewable energy technologies are becoming more economically viable, securing funding for large-scale endeavors in emerging markets remains a significant obstacle. The “risk premium” frequently associated with investments in developing regions increases project costs and complicates their initiation. In 2024, Africa accounted for just 3% of energy investments worldwide, despite its vast renewable potential.
To address these challenges, the Obelisk project receives backing from multiple international financial organizations. The European Bank for Reconstruction and Development, the African Development Bank, and British International Investment have collectively committed almost $480 million to support the initiative. This support is crucial for advancing the project and indicates increasing global trust in Africa’s renewable prospects.
The development of Obelisk is planned in stages, with 561 MW of solar energy and the complete battery storage facility anticipated to be functional by the middle of 2026. The project aims to reach its total capacity of 1.1 GW by the closing months of that year. Once finished, it will rank among the most extensive hybrid renewable energy systems on the continent.
Egypt’s move toward solar aligns with broader trends across Africa, where renewable energy is emerging as a crucial driver of economic development. Though the continent holds 60% of the world’s best land for solar generation, only 3% of Africa’s energy came from solar in 2023. Still, momentum is building. In 2024, South Africa and Egypt accounted for 75% of new solar capacity across Africa, and at least 18 countries are expected to pursue projects exceeding 100 MW in 2025.
Meanwhile, Egypt has been broadening its infrastructure reach in additional manners. Notable endeavors such as the 2,000-kilometer fast rail network—connecting 60 cities nationwide—and enhancements to the Suez Canal intend to update transportation and commerce. These changes illustrate a more extensive plan to establish Egypt as a central point for energy, logistics, and economic development in the region.
However, energy continues to be a significant concern. The nation’s reliance on fossil fuels has left it susceptible to external disruptions, and increasing temperatures further strain electricity requirements. Nonetheless, initiatives such as Obelisk present an opportunity for energy sustainability and self-sufficiency.
Beyond its practical benefits, Obelisk represents a shift in how nations in the Global South are approaching energy policy—not just as a climate issue, but as a matter of economic security, investment attractiveness, and long-term growth.
Egypt is taking its first steps in the solar energy sector, yet the message is unmistakable: by combining appropriate resources, advanced technology, and global assistance, renewable energy has the potential to significantly transform the region’s energy scene.
As construction moves forward, the Obelisk project may well become a model not only for Egypt, but for other nations facing similar energy and economic challenges—highlighting the importance of sustainable infrastructure as both a solution and a strategic opportunity.
