Egyptian Cabinet Approves Draft Law To Boost Green Hydrogen Projects

Representational image. Credit: Canva

The Egyptian Cabinet gave its approval to a draft law intended to promote green hydrogen projects and businesses that are associated with it. Mostafa Madbouly, the prime minister, presided over the meeting.


According to a press release issued by the Cabinet, the legislation, intended to encourage environmentally friendly initiatives, applies to projects involved in the production of green hydrogen and its various byproducts, provided that agreements are reached within five years of the law’s implementation.

The law covers a wide range of initiatives, such as the construction of green hydrogen production facilities, desalination facilities that give a portion of their output to green hydrogen, renewable energy facilities that allocate at least 95% of their output to green hydrogen, and desalination facilities, as well as initiatives targeted at the distribution, storage, and transportation of green hydrogen. It also includes businesses that produce the raw materials used in green hydrogen production.


The rule also broadens its application to future additions to ongoing projects, where “expansion” is defined as any improvement that boosts output. Developers are required by the law to set up a project business and to abide by project agreements for a maximum of 50 years.

Also Read  DEWA Launches Sustainability Youth Ambassadors Programme, In Cooperation With CISL

Projects and their expansions will get access to a variety of incentives under the new law throughout the term of their project agreements. These incentives will also apply to expansion contracts that are signed within seven years of the project’s start of operations commercially.

One of the incentives is a cash investment incentive equal to 33% to 55% of the tax paid on project-related income. Value-added tax (VAT) will also not be applied to supplies and equipment, and there will be no taxes or registration costs for contracts or land. Projects will additionally benefit from a customs tax exemption on imported commodities associated with the enterprise.

The bill offers additional advantages, such as a shortened Investment bill approval procedure and the ability to import and export items without registering, to further stimulate green hydrogen ventures.

To be eligible for these incentives, though, a few requirements must be satisfied. These include starting a business within five years, relying on foreign financing (with at least 70% of financing coming from abroad), using at least 20% of domestically produced components, transferring cutting-edge technology, putting training programmes into place, and exhibiting social responsibility.

Also Read  BSES Rajdhani Power Announces Partnership with Energy Software Company Sheru

In a decision, the Council of Ministers will specify the checks that must be in place to ensure that these requirements are being met.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.