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, 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.”
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 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 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 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 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 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 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.
