CSCEC, SK Ecoplant in $1.9 bn Egypt renewable energy deal

China State Construction Engineering Corp. (CSCEC), the world’s largest builder, and South Korea’s SK Ecoplant Co. are set to team up on a $1.9 billion renewable energy project in Egypt, their first joint project since the two companies agreed to cooperate on the eco-friendly business.

CSCEC, SK Ecoplant and the Egyptian government bodies such as the New and Renewable Energy Authority, Egyptian Electricity Transmission Co., the Suez Canal Economic Zone and the Sovereign Fund of Egypt on Wednesday signed a memorandum of understanding on the project of the green hydrogen and green ammonia production linked with renewable energy, according to the South Korean company.

The Chinese and South Korean constructors plan to build a power plant with an energy capacity of 778 megawatts (MW) including 500 MW from photovoltaics and 278 MW from onshore winds.

They are also set to establish a 250-MW water electrolysis system, which is expected to produce 50,000 tons of green hydrogen, and a facility that converts the hydrogen into 250,000 tons of green ammonia for exports.

Those units estimated to cost some 2.6 trillion won ($1.9 billion) are scheduled to start commercial operations in late 2029.

KEY GLOBAL PLAYER IN GREEN HYDROGEN PROJECTS

“African countries including Egypt have high potentials for green hydrogen production and exports as they have ample renewable energy resources and large sites,” said Bae Sung-joon, head of SK Ecoplant’s energy business. “Based on strategic cooperation with CSCEC, we aim to become a key player in global green hydrogen projects.”

CSCEC and SK Ecoplant in January 2023 agreed to jointly develop renewable energy resources worldwide.

The Chinese company, which has been in business in Egypt for about 40 years, built good relationships with the African country’s government and private sectors.

SK Ecoplant has been establishing the green hydrogen value chain by securing capabilities of renewable energy business development, core equipment manufacturing, green hydrogen production and green ammonia conversion.

The construction unit of South Korea’s No. 2 conglomerate SK Group already participated in Canada’s $4.5 billion green hydrogen project while working on green hydrogen and ammonia programs in the United Arab Emirates and Oman.

Write to Sang Hoon Sung at uphoon@hankyung.com
 

Jongwoo Cheon edited this article.