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.”
In response to its growing energy challenges, Egypt has committed to increasing the share of renewables in its energy mix. The government plans to raise the current 13% renewable contribution to 42% by 2030. While these targets are ambitious, they are seen as critical to reducing reliance on fossil fuels, especially as output from major fields like the Zohr gas field diminishes.
As part of this transition, Egypt issued a tender in mid-2024 to purchase nearly two million tons of fuel oil to meet peak summer demand, which strains the electricity grid as temperatures routinely exceed 40°C (104°F) in southern regions. Prime Minister Mostafa Madbouly has urged citizens to conserve energy to help mitigate further outages.
However, as Egypt examines new local gas resources, it is also progressively focusing on its geographical strengths. The southern area of the nation is located in what specialists refer to as the “Magic Solar Belt,” an area with some of the highest solar radiation levels worldwide. Based on the Global Solar Atlas, Egypt is ranked fourth internationally for photovoltaic (PV) potential. This optimal spot makes the Obelisk project particularly encouraging.
Karim Elgendy, executive director of the Middle East and North Africa-focused think tank Carboun Institute, highlights the dual economic and strategic significance of Obelisk. “This isn’t just a green initiative,” he says. “It’s an economically driven investment. Projects like this can demonstrate the viability of solar-plus-storage solutions in the developing world.”
Traditionally, the main drawback of solar energy has been its inability to generate power continuously—it only functions when the sun is shining. Nevertheless, the decreasing expenses of battery storage are transforming this scenario. Since 2010, the cost of large-scale battery storage initiatives has decreased by 89%, partly due to increased production in countries such as China. Consequently, hybrid facilities that integrate solar energy with storage have become much more viable.
In fact, the Global Solar Council projects that by 2027, solar-plus-battery configurations will offer the lowest-cost electricity generation globally. However, despite this potential, Africa remains underrepresented in global battery storage deployment. Of the estimated 363 gigawatt hours (GWh) of global storage capacity in 2024, Africa accounts for just 1.6 GWh.
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.
Construction of Obelisk is scheduled in phases, with 561 MW of solar power and the full battery storage capacity expected to be operational by mid-2026. The project will ramp up to its full 1.1 GW capacity by the end of that year. When completed, it will be among the largest hybrid renewable energy systems on the continent.
Egypt’s shift towards solar energy aligns with a wider movement in Africa, where renewable energy is becoming a vital force for economic growth. Despite the continent having 60% of the world’s prime land for solar power, only 3% of Africa’s energy originated from solar in 2023. However, progress is being made. By 2024, South Africa and Egypt represented 75% of new solar developments in Africa, and at least 18 nations are anticipated to undertake projects surpassing 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.
Nevertheless, energy remains a critical issue. The country’s dependency on fossil fuels has made it vulnerable to external shocks, and rising temperatures only exacerbate power demands. But projects like Obelisk offer a pathway toward energy resilience and independence.
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’s solar push may be in its early stages, but it’s already sending a clear message: with the right mix of resources, technology, and international support, renewable energy can play a central role in reshaping the region’s energy landscape.
As development progresses, the Obelisk initiative might set an example not just for Egypt, but also for other countries encountering comparable energy and economic issues—emphasizing the significance of sustainable infrastructure as both a remedy and a strategic opportunity.
