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 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, 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.
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 overcome these barriers, the Obelisk project is supported by several international financial institutions. The European Bank for Reconstruction and Development, the African Development Bank, and British International Investment have together pledged nearly $480 million to fund the initiative. This backing is essential to moving the project forward and signals growing international confidence in Africa’s renewable future.
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 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 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 advantages, Obelisk symbolizes a change in how countries in the Global South are handling energy policy—not merely as an environmental matter, but as an issue of economic stability, appeal for investors, and sustainable development.
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.
