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 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.”
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.
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, solar energy’s primary weakness has been its intermittency—it only produces power during daylight hours. However, the falling costs of battery storage are changing that. Since 2010, the price of large-scale battery storage projects has dropped by 89%, driven in part by manufacturing scale-ups in countries like China. As a result, hybrid plants that combine solar power with storage have become significantly more feasible.
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 imbalance points to a larger issue—funding. Although renewable energy technologies are becoming more cost-competitive, financing large-scale projects in emerging markets is still a major hurdle. The “risk premium” often attached to investments in developing nations makes projects more expensive and difficult to launch. In 2024, Africa received only 3% of global energy investment, despite its enormous 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 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.
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 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.
