Egypt Targets $7.5 Billion Oil & Gas Investment: What It Means for Energy Security

Egypt is aiming to boost foreign investments in its oil and gas sector by approximately 25% to $7.5 billion in the fiscal year 2024/2025 (Sis.gov). This push for traditional energy comes as the country also secures $566 million in debt financing for a massive new solar project, Nefer Minya. For your business and the region, these moves signal Egypt's accelerated drive for energy self-sufficiency and its ambition to become a major energy hub.

What's driving Egypt's energy push?

Egypt's rapidly expanding population and economic growth are driving an increasing demand for energy. The government is committed to diversifying its energy mix, enhancing energy security, and reducing its reliance on fossil fuels (Sis.gov). By doing so, it aims to achieve cost savings, shield its public finances from volatile global prices, and generate crucial foreign exchange earnings through liquefied natural gas (LNG) exports (Sis.gov).

Key government strategies, such as Vision 2030, strongly emphasise renewable energy development. Egypt updated its Integrated Sustainable Energy Strategy (ISES) 2035 targets in 2023, accelerating its goal of 42% renewable electricity generation from 2035 to 2030 (Sis.gov). The country also approved a National Strategy for Low-Carbon Hydrogen in February 2024, aiming to capture 5-8% of the global hydrogen trade by 2040 (Sis.gov). This involves up to $60 billion in projected investment.

Boosting oil and gas production

To counter the natural decline in output from existing fields, Egypt plans to invest over $5.7 billion in oil and gas exploration, with an objective to drill 480 new wells within the next five years (Sis.gov). The Ministry of Petroleum is targeting up to $70 million in investment through seven new oil and gas blocks (Sis.gov). Foreign investments in the sector are expected to reach $6 billion in the current fiscal year, up from $5.6 billion in 2022/2023 and $4.7 billion in the preceding year (Sis.gov).

Between July 2024 and June 2026, Egypt brought 591 new wells into production and made 113 oil and gas discoveries (Sis.gov). The country intends to bring an additional 101 wells online in the current year, 2026 (Sis.gov). Recent discoveries include the Watda exploratory well in the Western Desert, now producing 40 million cubic feet of natural gas per day (Sis.gov). Egypt also announced its largest oil and gas discovery in 15 years, the Bustan South-1X well in the Western Desert, with initial estimates of 70 million barrels of oil equivalent (Sis.gov).

Eni is set to initiate start-up activities for the Meleiha Phase 2 (MP2) project in Egypt's Western Desert in October 2026, designed to process up to 100 million standard cubic feet of gas per day (Eni). Petroleum Minister Karim Badawi highlighted that declining production has been a significant challenge, necessitating efforts to stimulate investment and accelerate exploration (Egyptoil-gas). The successful settlement of $6.1 billion in outstanding dues to foreign petroleum companies over two years aims to restore confidence and encourage new agreements (AGBI).

Advancing solar power capacity

Egypt's renewable energy push is exemplified by the Nefer Minya solar power project, which secured a total debt financing package of up to $566 million (Sis.gov). The European Bank for Reconstruction and Development (EBRD) arranged up to $265 million of this financing, with additional contributions from Germany's DEG, France's Proparco, and the Dutch FMO (Sis.gov). This facility is set to become the largest solar power plant in Egypt and Africa, combining 1.2 GW of solar photovoltaic (PV) generation with a 600 MWh battery energy storage system (BESS) (Sis.gov).

Owned by Nefer Minya for Renewable Energy S.A.E., a special purpose vehicle of Infinity Power and Hassan Allam Utilities Energy, the project will sell electricity to the Egyptian Electricity Transmission Company (EETC) under a 25-year power purchase agreement (Sis.gov). The project is projected to supply power to over 1.4 million homes annually and prevent more than 1.5 million tonnes of carbon dioxide emissions per year (Sis.gov). This initiative supports Egypt's ambition to generate 42% of its electricity from renewable sources by 2030, a goal accelerated from its original 2035 target (Sis.gov).

Key Energy Targets

• 42% renewable electricity by 2030, and over 60% by 2040 (Sis.gov).
• Self-sufficiency in petroleum products by 2029, aiming to cease imports entirely by 2030 (Sis.gov).
• 5-8% share of the global low-carbon hydrogen trade by 2040 (Sis.gov).

What it means for businesses and households

For households, increased energy production and diversification contribute to enhanced energy security and a more reliable power supply, with projects like Nefer Minya expected to power over 1.4 million homes annually (Sis.gov). For businesses and investors, the acceleration of investments is attracting increased foreign capital into the oil and gas sector, while the settlement of outstanding dues has improved confidence (AGBI). The government actively promotes the