London-headquartered development bank EBRD (European Bank for Reconstruction and Development) announced on Tuesday that it will provide a $80 million loan to develop Egypt’s first green hydrogen facility.

EBRD said in a statement that the loan has been provided to Egypt Green, joint venture of Fertiglobe, one of the largest seaborne exporters of combined urea and ammonia, Scatec, a Norway-based integrated independent power producer, Orascom Construction, one of the largest engineering and construction groups in the Middle East and North Africa, and The Sovereign Fund of Egypt, a state-owned, privately managed investment fund.

According to the statement, the financing will be used to acquire and construct a 100-megawatt (MW) electrolyser facility to be powered by renewable energy. When fully developed, the facility will deliver up to 15,000 tonnes of green hydrogen annually. This, in turn, will be used as an input for the production of green ammonia to be sold on the Egyptian and international markets.

Last week, Zawya Projects had reported that Egypt Green is “currently testing the first and largest polymer electrolyte membrane (PEM) electrolyser in Africa for the first phase of the project” located in Ain Sokhna.

The EBRD statement noted that ammonia production is energy intensive and responsible for around 1.8 per cent of global carbon dioxide (CO2) emissions. Reducing the amount of CO2 produced during the manufacturing process is, therefore, key to helping the world achieve its net zero targets by 2050.

As Africa’s largest ammonia-producing country, Egypt’s current production is based on natural gas, generating significant CO2 emissions, the statement noted.

Nandita Parshad, Sustainable Infrastructure Managing Director at the EBRD said Egypt Green project demonstrates the commercial viability of green hydrogen production, paving the way for the decarbonisation of fertiliser and other hard-to-abate industries.