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 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, 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 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.
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 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 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 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 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.
