ACWA Power secures 2 GW wind project in Egypt

From the newsletter

Saudi Arabia-based energy company, ACWA Power, has signed a $2.29 billion agreement with Egypt to develop a 2 GW wind farm, which will be Africa’s largest energy project. The deal was announced at the Egypt Energy Show 2025 this week. ACWA Power will develop, finance, construct, own, and operate the wind plant for 25 years.

• The project is one of several renewable energy collaborations between Saudi Arabia and Egypt, including a $1.8 billion 3 GW electricity interconnection project.

• Egypt's renewable energy market has been attracting mega investments. It has over 5 GW of projects in the pipeline.

More details

• Egypt is making significant investments in renewable energy and opening its market to foreign investment. Middle East countries have been the most active players, with their large companies financing mega-projects. Saudi Arabia and the UAE, in particular, have made considerable investments in Egypt's renewable energy sector. Companies such as Alfanar, FAS, and MOWAH have launched five projects, collectively adding 1.7 GW of renewable energy capacity.

• ACWA Power, along with energy and infrastructure leader Hassan Allam Utilities, is also developing a $1.2 billion, 1.1 GW wind farm in the Gulf of Suez. This project reached financial close earlier this year and is expected to begin commercial operations in the second quarter of 2027.

• Beyond Saudi Arabia, other Middle East companies are also investing in Egypt's renewable energy sector. The Egyptian-Emirati consortium Infinity Power and Egyptian company Hassan Allam Utilities signed an agreement to establish solar power plants with a capacity of 1.2 GW and battery energy storage systems with a capacity of 720 MWh. UAE-based AMEA Power has also partnered with Egypt to develop a 500 MW wind farm in the Gulf of Suez, with an investment of $600 million.

• UAE firm Kazar is investing $2.5 billion to build a hybrid renewable energy station in Egypt's Zafarana region. This project will have a total capacity of 3.1 GW, with 2 GW generated from solar energy and 1.1 GW from wind energy. The hybrid station will replace the ageing Zafarana Wind Farm.   

• Furthermore, Egypt has signed an MoU with Abu Dhabi-based company Masdar for a 5 GW floating solar power plant at Lake Nasser. This could become the largest floating solar power plant in the world.

Our take

• The signing of the 2 GW wind project demonstrates confidence in Egypt's renewable energy sector and is likely to attract further foreign investment. 

• Although Egypt is an oil-producing country, it is a net importer and spends over $10 billion annually on fuel imports. The Russia-Ukraine war disrupted global fuel supplies, forcing Egypt to reassess its energy security. Renewable energy sources offer a viable solution. Egypt has abundant sunshine in its deserts and strong wind resources, both offshore and onshore, making it ideally suited for renewable energy development.

• Egypt's electricity consumption continues to grow, but the pace and scale of its renewable energy projects are outpacing demand. This suggests that Egypt could have a surplus of electricity once the projects currently in the pipeline are completed. This presents a significant opportunity for Egypt to participate in the international electricity market. The Egypt-Saudi Arabia interconnector which is under construction will further facilitate exports, opening up promising new avenues for independent power producers (IPPs).