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 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 well-acquainted with Egypt’s energy sector, having carried out four renewable energy initiatives in the nation before. However, Obelisk is distinguished by its magnitude and technological blend. As Terje Pilskog, the CEO of Scatec, observes, energy security extends beyond just generating power—it involves being free from unpredictable fuel markets. “Renewables provide stability,” Pilskog clarifies. “You aren’t tied to fuel imports or sudden price hikes.”
To tackle its expanding energy issues, Egypt has pledged to boost the proportion of renewables in its energy composition. The authorities aim to elevate the present 13% share of renewable energy to 42% by 2030. Although these goals are bold, they are deemed essential for decreasing dependence on fossil fuels, particularly as production from significant sites like the Zohr gas field declines.
As a component of this shift, Egypt launched a tender around mid-2024 to acquire almost two million tons of fuel oil to handle the high demand during the summer peak, which puts pressure on the electricity system as temperatures frequently surpass 40°C (104°F) in the southern areas. Prime Minister Mostafa Madbouly has encouraged people to save energy to assist in reducing more power outages.
But even as Egypt explores new domestic gas sources, it is increasingly looking to its geographical advantages. The southern part of the country sits within what experts call the “Magic Solar Belt,” a region with some of the highest solar irradiance levels in the world. According to the Global Solar Atlas, Egypt ranks fourth globally in photovoltaic (PV) potential. This prime location makes the Obelisk project especially promising.
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.
Indeed, the Global Solar Council anticipates that by 2027, solar paired with battery systems will be the most cost-effective means of generating electricity worldwide. Nevertheless, regardless of this promise, Africa is still not prominently featured in the worldwide rollout of battery storage. Out of the projected 363 gigawatt hours (GWh) of global storage capability in 2024, only 1.6 GWh is attributed to Africa.
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.
The development of Obelisk is planned in stages, with 561 MW of solar energy and the complete battery storage facility anticipated to be functional by the middle of 2026. The project aims to reach its total capacity of 1.1 GW by the closing months of that year. Once finished, it will rank among the most extensive hybrid renewable energy systems on the continent.
Egypt’s move toward solar aligns with broader trends across Africa, where renewable energy is emerging as a crucial driver of economic development. Though the continent holds 60% of the world’s best land for solar generation, only 3% of Africa’s energy came from solar in 2023. Still, momentum is building. In 2024, South Africa and Egypt accounted for 75% of new solar capacity across Africa, and at least 18 countries are expected to pursue projects exceeding 100 MW in 2025.
Meanwhile, Egypt has been expanding its infrastructure footprint in other ways. High-profile projects such as the 2,000-kilometer high-speed rail system—linking 60 cities across the country—and expansions to the Suez Canal aim to modernize transportation and trade. These developments reflect a broader strategy to position Egypt as a regional hub for energy, logistics, and economic growth.
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’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 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.
