The European Union is set to provide Egypt with a €90 million grant to modernize its electricity grid and support the integration of rising renewable-energy capacity, as the country advances its ambition to become a regional energy hub.
The agreement is expected to be signed in the coming weeks, with funding scheduled to be released over a three-to-four-year period. The grant will focus on strengthening electricity transmission infrastructure, improving grid efficiency, and ensuring the network can accommodate additional power generated from solar and wind projects.
Dr. Ahmed El-Beltagy, Head of Transport, Energy and Climate at the EU Delegation to Egypt, said the initiative forms part of a wider European support package for Egypt’s energy transition.
The EU is also conducting feasibility studies for eight electricity distribution control centres across the country, which could later receive European grant financing. These centres are expected to play a key role in managing power distribution and supporting Egypt’s shift towards a more diversified energy mix.
Further support is planned for green industry projects. In 2026, the EU is expected to provide a €35 million grant to Norwegian renewable-energy company Scatec for its green ammonia project in Egypt, reflecting growing European interest in green hydrogen and future-fuel value chains.
In addition, the European Investment Bank has already signed a €600 million loan to expand Egypt’s electricity transmission network. The EU is also holding discussions with financial institutions to arrange investment guarantees for UAE-based Alcazar Energy, helping the company develop new electricity and renewable-energy projects in Egypt.
Rather than relying on sovereign guarantees, the proposed structure would provide guarantees directly to private investors, reducing project risk and supporting the flow of foreign capital into Egypt’s energy sector.
El-Beltagy said grid development is becoming increasingly critical as Egypt expands its solar and wind portfolio. Upgrades to transmission and distribution networks will enable electricity generated in key renewable-energy locations, including the Gulf of Suez and Upper Egypt, to reach major consumption centres more efficiently while reducing technical bottlenecks.
The EU is also considering grant support for the modernization of hydropower facilities, including upgrades to turbines at existing dams. Such investments could help improve the performance of current assets while increasing renewable-electricity output.
During 2025, the EU supported several major electricity infrastructure projects in Egypt. These included €60 million for the Alexandria electricity transmission control centre, comprising €50 million from the French Development Agency and €10 million from the EU. A further €35 million grant was allocated to expand transmission lines needed to absorb renewable generation from the Gulf of Suez, alongside a €160 million European Investment Bank loan to Egypt’s Ministry of Electricity.
The EU’s long-term strategy aims to support Egypt in raising the share of renewable energy to 65% of total electricity generation by 2040. Egypt’s target of producing around 22 gigawatts of renewable energy by 2030 is seen as an encouraging sign of progress.
However, El-Beltagy stressed that renewable-energy growth must be matched by faster investment in smart, resilient transmission and distribution networks. Without adequate grid capacity, renewable projects will be unable to deliver their full economic and operational potential.
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