Egypt is nearly doubling its planned investments in electricity and renewable energy to EGP 136.3 billion ($2.8 billion) for fiscal year 2025/2026, up from EGP 72.6 billion a year earlier, according to the Ministry of Planning, Economic Development, and International Cooperation.
The sharp rise underscores Cairo’s determination to expand renewable capacity, modernize its grid, and reinforce its role as a regional energy hub.
Expanding investment
Egypt’s Minister of Planning, Economic Development and International Cooperation, Rania Al-Mashat, said the government has earmarked EGP 136.3 billion for the sector in 2025/2026—nearly double last year’s allocation and higher than the EGP 95.8 billion invested in 2023/2024.
Public funding will cover around 73% of the total, while the private sector will account for 27%. Almost half of public investments will be executed through state-owned enterprises and specialized holding companies.
“The growing investment in the electricity and renewable energy sector represents a fundamental pillar of Egypt’s transition toward a more sustainable economy that is less dependent on fossil fuels,” said Mohamed AbdelFattah, Director of Market Access & Government Affairs at Moharram & Partners. “Increasing funding means boosting the capacity to produce clean electricity, developing the infrastructure needed to distribute it efficiently, and reducing harmful emissions. These investments also help lower the fuel import bill and improve energy security, thereby enhancing long-term economic stability.”
Ambitious growth targets
The Ministry projects the sector’s total output will reach EGP 655.6 billion in 2025/2026 and expand to EGP 984.5 billion by 2028/2029, reflecting annual growth of 15–20%. Value added is expected to rise from EGP 285 billion to about EGP 430 billion during the same period.
Infrastructure upgrades
The government’s plan prioritizes reliability and access, with projects to convert overhead lines into underground cables, expand transformer stations in 10th of Ramadan and Zahraa Madinat Nasr, construct a new facility in Minya el-Kamh, and rehabilitate the Matariya station.
Performance benchmarks include:
-Expanding coverage to 99.8%
-Boosting generation to 235 billion kWh
-Adding 1,200 MW of thermal capacity
-Reducing grid losses to 16.5%
-Building nine 500 kV substations
-Raising export capacity to 3,900 MW
Shifting toward renewables
Renewables are central to the new plan. Their share of total generation is expected to reach 20% in 2025/2026, up from 12% in 2023/2024. The government is expanding land allocation for solar and wind projects to 2,900 square kilometers, with installed capacity targeted to rise to 6,470 MW.
“Solar and wind energy sources are expected to benefit the most from the increase in investments, given Egypt’s abundant natural resources in this field,” AbdelFattah noted. “The country’s desert areas offer vast opportunities for large-scale solar projects, while the Gulf of Suez and Red Sea regions provide ideal conditions for wind farms. In addition, there will be a growing need to develop storage and interconnection projects to ensure grid stability and its ability to absorb the rising output from these sources.”
Private sector and global partnerships
The report highlights growing private sector participation through land allocation, streamlined permitting, and concessional financing. International partnerships are also playing a role. Recent examples include:
-EGP 830 million transformer projects in Minya el-Kamh and Matariya, funded through a €54 million debt-swap with the German Development Bank.
-EU and French Development Agency-backed upgrades worth over EGP 195 million.
Through its NWFE platform, the Ministry has mobilized EGP 4 billion in development financing over two and a half years, supporting renewable projects with a combined capacity of 4.2 GW toward a 10 GW target by 2028.
“Investment in energy is not limited to electricity generation alone, but extends to driving the economy as a whole,” AbdelFattah explained. “New projects create direct jobs in construction, operations, and maintenance, along with indirect employment in supporting industries such as component manufacturing and logistics. Moreover, providing stable and affordable electricity enhances the competitiveness of other productive sectors like industry, technology, and services—ultimately boosting economic growth and creating job opportunities for youth.”
He added that public-private partnerships (PPPs) and foreign direct investment will be critical. “Large-scale renewable energy projects can be carried out through PPPs, while also creating avenues for international investors to contribute in areas such as manufacturing, infrastructure, and green hydrogen projects. These partnerships provide not only financing, but also bring technical expertise and modern technologies, thereby enhancing the competitiveness of the Egyptian market at both the regional and international levels.”
Challenges ahead
Despite the positive outlook, Egypt faces hurdles in delivering on its renewable energy ambitions. Financing constraints, currency volatility, and the need for continued grid modernization remain pressing. The sector also grapples with shortages of specialized technical talent and bureaucratic bottlenecks in land allocation and licensing.
“Despite these significant opportunities, Egypt faces several challenges in effectively implementing renewable energy investments,” AbdelFattah cautioned. “At the legislative level, stability in investment policies and the provision of clear incentives remain essential conditions for attracting both foreign and domestic investment.”
