Saudi Arabia’s ACWA Power has signed a framework agreement with the Sovereign Fund of Egypt (TSFE), the Suez Canal Economic Zone (SCZone), the Egyptian Electricity Transmission Company (EETC), and the New and Renewable Energy Authority (NREA) for the development of a $4bn green hydrogen project in Egypt.

The agreement follows the signing of a memorandum of understanding (MoU) on the project in December 2022.

According to a company statement, the agreement outlines the development of the first phase of the green hydrogen project.

Powered by wind and solar plants, the first phase will produce around 600,000 tonnes per year of green ammonia.

A potential second phase will increase the capacity to 2 million tonnes per year.

ACWA Power CEO Marco Arcelli said: “As a first mover in green hydrogen, ACWA Power is proud to bring its expertise in this new and exciting market to Egypt.

“We commend our partners for their bold step into producing the fuel for the future, for which there will be great demand in Europe and the rest of the world. Egypt is well-positioned to become one of the world’s top producers of green hydrogen and we are elated to be a part of the country’s energy transition.”

The company now has five renewable projects in Egypt with a combined power generation capacity of 1.4GW under operation or different stages of development.

The latest addition will also boost ACWA Power’s green hydrogen portfolio.

Last month, ACWA Power broke ground on its second green hydrogen project, in Uzbekistan. The first phase of this project will produce 3,000 tonnes of green hydrogen per year.

The company has also recently agreed to develop the Garuda Hidrogen Hijau project (GH2) in Indonesia.