$500 million.. The Nigerian Wealth Fund intends to invest in renewable energy projects in Egypt

In an email statement, Nigeria's sovereign wealth fund announced its intention to invest in clean energy projects across the country.

Bloomberg News Agency quoted the Fund’s statement as saying that it had concluded a “strategic partnership” with the International Finance Corporation of the World Bank, with the aim of joint commitment to developing renewable energy and reducing gas emissions that cause global warming in Nigeria.

Renewable energy projects

At the same time, the fund, officially known as the Nigerian Sovereign Investment Corporation, intends to invest $500 million in renewable energy projects.

It is noteworthy that Nigeria is the largest oil producing country on the continent of Africa.

This comes as Nigeria intends to increase incentives for foreign investors in an attempt to confront the decline in capital coming into the country, as part of the government's plans to stimulate the economy.

Nigeria's Minister of Industry, Trade and Investment, Doris Uzoka Anate, said earlier this month that the government in Abuja would introduce measures to eliminate double taxation and allow for the acceleration of foreign money transfers.

Free trade zones

“We have free trade zones that can be convenient for their businesses and export and import their basic materials without any taxes,” she said.

She described this as a "strong incentive" for foreign direct investment, which fell by 52% to $698 million in the six years to 2021.

Since taking power in May, President Bola Tinubu has initiated reforms to revitalize Africa's largest economy from nearly a decade of decline.

It includes eliminating an annual fuel subsidy worth $10 billion and liberalizing the foreign exchange market, which led to a decline in the value of the naira by more than 40%.

Nigeria is also reviewing its bilateral agreements with countries to promote investments.

In September, it entered into several agreements with India, which could lead to companies setting up automobile and steel plants in Africa's largest oil producer.

It is noteworthy that Nigeria's debts have increased over the past eight years by about eight times to more than $110 billion, and its service consumed about 96% of the state's total revenues last year.

Renewable energy in Egypt

There are increasing bets on renewable energy in Egypt, as it is the largest African country nominated to lead the green transformation in Africa, given the natural potential it has that qualifies it to do so.

In a related context, A recent analytical report - obtained by the Energy Research Unit - expected that the green transition path in Egypt would contribute by adding approximately $63 billion to the country’s gross domestic product by 2050.

Renewable energy in Egypt has witnessed a rapid rise since the beginning of the 21st century, especially at the level of wind and solar energy projects, amid ambitious plans to which expansion in green hydrogen production has been added in recent years.

The general energy landscape in Egypt

Egypt is one of the largest energy markets in Africa, due to its population exceeding 110 million people, and historically global levels of access to modern fuels and electricity; What puts it in a distinctive position compared to its southern neighbors on the African continent.

Egypt's total energy supply increased by 1.5% annually during the period from 2010 to 2020, most of it dependent on oil and gas. This is reflected in the increase in emissions from the energy sector, which is the largest cause of carbon emissions.

Gas accounted for 54% of the total energy supplies in Egypt during the year 2020, while oil accounted for 33.7%, according to detailed data monitored by the Energy Research Unit from the IRENA report.

The use of natural gas in Egypt witnessed a rapid increase of 42% during the period from 2010 to 2020, coinciding with the increase in gas-powered electricity generation plants.

Egypt has become the largest gas market in Africa, accounting for more than a third of the gas demand on the entire continent, according to data from the Climate Action Tracker 2022.

At the same time, the share of renewable energy in Egypt reached 6.5% within the total energy mix during 2010 and then rose to 7.1% in 2020.

New natural gas discovery

In a related context, Tuesday, November 21, 2023, Shell Oil Company announced a new natural gas discovery in the northeastern Amreya region in the Mediterranean Sea in Egypt.

Shell's statement did not clarify the volume of gas discovered at a water depth of approximately 250 meters below sea level in the offshore Nile Delta region, according to what local newspapers reported.

Shell Egypt President, Khaled Qassem, said: “This discovery is an important step for Shell Egypt to enhance our growth aspirations and our continued commitment as a major energy partner in Egypt.”

Last September, Shell signed an agreement with the Kuwait Foreign Petroleum Exploration Company (KUFPEC), under which KUFPEC acquired a 40% stake in the northeastern Ameriyah region, with Shell retaining the remaining 60% stake in the region.