Egypt has signed a memorandum of understanding for a $5 billion project with Norway’s Scatec (SCATC.OL) to build its first green ammonia plant in the Suez Canal Economic Zone, the cabinet said on Thursday.
The green ammonia plant near the Red Sea port and industrial zone of Ain Sokhna would have production capacity of one million tons annually with the potential to expand to three million tons, the cabinet statement said.
The deal was agreed between Scatec, the Suez Canal Economic Zone, Egypt's Sovereign Fund and its Ministry of Electricity and Renewable Energy.
Scatec had signed an MOU with Egypt in December to study the development of a green ammonia plant that would be fueled by green hydrogen produced by renewable power.
The plant would be expected to start production in 2025, and the green ammonia would mainly be exported to European and Asian markets where demand for clean ammonia is growing rapidly, a joint statement issued by Scatec on Thursday said.
Egypt will host the COP27 climate conference in November and is pushing to develop green energy projects, including for the production of green hydrogen.
Separately, Egypt's annual urban consumer price inflation surged to its highest in nearly three years in February, driven by a sharp increase in food prices, figures from the state statistics agency CAPMAS showed on Thursday.
Inflation rose to a higher-than-expected 8.8% year on year from 7.3% in January, putting it near the upper limit of the central bank's 5-9% target range and indicating that the bank's monetary policy committee may increase interest rates when it meets on March 24.
February's inflation figure was the highest since June 2019.
Food prices rose 4.6% month on month in February, with vegetable prices jumping 17.2%.
Prices were pushed upwards by an increase in raw material and commodity prices worldwide that has been going on since the beginning of 2021, said Radwa El-Swaify of Pharos Securities Brokerage.
"Companies at the end of 2020 had stocked up on cheap inventory and were using it during 2021. So once this cheap stock started to deplete and they were buying at the higher prices, they started to become more expressive in terms of their own price increases,” she said.
