Mazghouny & Co has assisted Egypt Green Hydrogen, the project developed by Scatec in partnership with Fertiglobe, Orascom Construction, The Sovereign Fund of Egypt, and the Egyptian Electricity Transmission Company, in connection with the a green ammonia offtake agreement signed with the German Hintco under the first ever H2Global auction. The 20-year ammonia offtake agreement was signed at the Egypt-EU Investment Conference in Cairo on 29 June 2024.
The project consists in the establishment of a 100 MW electrolyser facility to produce renewable hydrogen to be used as feedstock for the production of renewable ammonia at Fertiglobe’s existing ammonia plant in Ain Sokhna, Egypt. It will be powered by about 270 MW of solar and wind power capacity and deliver approximately 13,000 tonnes of renewable hydrogen and up to 74,000 tonnes of renewable ammonia annually.
Fertiglobe has been named winning bidder in H2Global’s first-of-its-kind ‘double-auction’ mechanism implemented by Hintco to facilitate the rapid expansion of renewable hydrogen and derivative product, for a contract value of up to EUR 397 million, securing supply of renewable ammonia out of Egypt until 2033, which will help Europe’s energy security and emissions reduction efforts, with mitigated CO2-emissions equivalent to annual emissions of 62,000 cars. The pilot auction was launched at the end of 2022, and garnered interest from over 65 countries across 5 continents. The qualification phase for Lot 1 of the auction, which covered renewable ammonia, attracted bids from 22 companies and consortia, with Fertiglobe, emerging as the successful bidder, with the support of Egypt Green Hydrogen consortium, from 5 finalists.
The next important milestones for the project are to select the electrolyser supplier and complete the project financing process with the European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Germany’s development finance institution and KfW subsidiary DEG, British International Investment (BII), and US International Development Finance Corporation (DFC), that are providing competitive financing to support the first green hydrogen and ammonia project in Egypt. The partners expect to reach financial close in the first half of 2025.
Mazghouny & Co team has been assisting the main sponsors with the project since inception, including with the drafting and negotiation of the offtake agreement’s term sheet, as well as the review and negotiation of the ammonia purchase agreement alongside King & Spalding team, in addition to supporting the project company with all the regulatory aspects of the project and negotiations with the Egyptian Government stakeholders.
