Egypt has launched a major renewable energy initiative, marking a significant step in its efforts to reduce reliance on fossil fuels and address ongoing power shortages. The country has commenced work on its first large-scale hybrid solar and battery energy storage facility, located in Nagaa Hammadi, an area well known for its abundant sunlight. This innovative project, dubbed Obelisk, will combine solar generation with battery storage in a move to strengthen energy reliability and sustainability.
The $590 million undertaking is being developed by Scatec, a renewable energy firm based in Norway that focuses on advancing clean energy solutions in emerging markets. Obelisk is set to deliver 1.1 gigawatts (GW) of solar electricity paired with 200 megawatt-hours (MWh) of battery storage, providing a dependable energy supply even when the sun isn’t shining.
Egypt, a country historically dependent on natural gas for electricity—accounting for approximately 75% of its power production—has faced a worsening energy crisis in recent years. Domestic gas production has declined, and rising global prices have forced the nation to import fuel at high costs. The pressure on Egypt’s electricity grid has resulted in frequent blackouts, prompting calls for urgent solutions.
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, 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, 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.
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.