The Egyptian government has approved a regulation which provides for a tax credit of 33-55 percent to green hydrogen project developers. There are various other non-tax incentives as well for developers including VAT exemptions on equipment, tools and other capital goods used for the development of the projects.
This subsidy bill has received approval from the Egyptian cabinet in May 2023. It is now awaiting Presidential assent and its formal implication. The order will also exempt hydrogen projects from real estate tax, stamp tax, and customs tax on imports (excluding passenger cars). Further, it also provides exemptions on document and registration charges for contracts, credit facilities, mortgages, and land acquisition.
Recently, ACWA Power signed the framework agreement for the first phase of a mega green hydrogen project in Egypt. The project will have a capacity of 600,000 tonnes-per-year of green ammonia, with an investment in excess of $4 billion. Further, the project will be scaled up to a second phase with a potential capacity of 2 million tonnes-per-year. The agreement was signed between ACWA Power and The Sovereign Fund of Egypt (TSFE), the Suez Canal Economic Zone (SCZone), the Egyptian Electricity Transmission Company (EETC), and the New and Renewable Energy Authority (NREA).
