OECD Says Egypt’s Golden License Helped Boost Renewable Energy Capacity by 6%

The Organisation for Economic Co-operation and Development (OECD) said Egypt’s “Golden License” investment initiative helped increase the country’s renewable energy capacity by 6% between 2022 and 2023, bringing total installed capacity to 6.7 gigawatts.

In a recent study examining Egypt’s pathway toward achieving net-zero emissions, the OECD said the country possesses strong potential to become a regional hub for green hydrogen production, supported by abundant solar and wind resources, an expanding ammonia industry, and strategic proximity to European, Asian, and African markets.

The organization estimated that Egypt would require approximately $45.6 billion in investments by 2030 to reach an annual hydrogen production capacity of 1.5 million tons. It noted that concessional financing would play a critical role in supporting such capital-intensive projects due to lower borrowing costs and longer repayment periods.

According to the OECD, Egypt succeeded in attracting more than $45 billion in foreign direct investment into renewable energy projects between 2015 and 2022.

The report also highlighted Egypt’s target of generating 42% of its electricity from renewable sources by 2030 as part of a broader industrial decarbonization strategy.

The OECD said Egypt has intensified efforts to mobilize sustainable financing for low-carbon technologies, including green hydrogen, renewable energy, and green finance initiatives. The organization also pointed to Egypt’s issuance of its first sovereign green bond, valued at 38 billion Egyptian pounds with a five-year maturity and a 5.25% interest rate, aimed at channeling capital toward environmentally sustainable projects.

In addition, Egypt launched Africa’s first voluntary carbon market to attract further investment for the transition toward green hydrogen and increase private-sector participation in emissions-reduction initiatives.

The OECD said Egyptian authorities continue working to improve the country’s regulatory framework and investment climate to encourage green investments, particularly in the energy sector, through measures aimed at enhancing macroeconomic stability, attracting foreign investment, and strengthening private-sector activity.

However, the organization noted that Egypt still faces persistent economic and social pressures, including elevated inflation and rising debt burdens, despite ongoing reform efforts.