With new sustainable jet fuel factory, Qatar boosts Egypt's global green energy ambitions

Egypt and Qatar are expanding their economic and investment partnership through a series of joint projects, the latest of which is a first-in-Egypt production facility for sustainable aviation fuel.

Announced on 14 December, in the presence of the Egyptian prime minister, the new venture will include a new factory in the Suez Canal Economic Zone, Egypt's international investment magnet along the Suez Canal, the shortest link between Asia and Europe.

To be established by Qatar-based Al Mana Holding, a diversified conglomerate with interests across energy, automotive, and real estate, the new factory will cover more than 100,000 square metres.

The Qatari conglomerate will invest $200 million in the first phase of the project, with subsequent phases expected to reach $500 million.

Upon completion, the new factory is expected to be operational by the end of 2027 and produce 600,000 tonnes of sustainable aviation fuel, utilising used cooking oil in its production.

Al Mana Holding has already secured a long-term deal with a major international energy company to purchase the factory's entire output, which will be exported to global markets.

This is the first Qatari investment in the Suez Canal Economic Zone, and it aligns with Egypt's green energy production ambitions.

It also highlights the growing economic and investment ties between Cairo and Doha, which economists say are warming at a critical time.

An ambitious plan

The new project could move Egypt a step closer to its goal of becoming an international hub for green energy production, according to experts.

The sustainable jet fuel produced by the new factory is expected to reduce harmful emissions by 50-80% compared with conventional jet fuel, according to Egyptian officials.

It also aligns with global aviation decarbonisation efforts and Egypt's push for export-oriented renewable fuel production, particularly from renewable sources, environmentalists said.

"Egypt has taken a series of measures in the past years to become an international green energy production hub," environmentalist Osama Abu Qura told The New Arab.

"The new factory contributes to these efforts, capitalising on what Egypt already has, including the human capital, production requirements and the ease to export output to foreign markets," he added.

Egypt plans to increase the share of renewables in power generation to 42% by 2030 and 60% by 2040, a significant jump from the current 12% share. Cairo's goal is to raise this share to 20% in 2025/2026.

Egypt also launched its National Strategy for Low-Carbon Hydrogen in 2024, aiming to become a global leader in green hydrogen production and export, targeting 5-8% of the tradable market by 2040.

Progress toward achieving those goals has been slower than expected due to grid and financing constraints, as well as past energy shortages. Nevertheless, international partnerships are accelerating implementation.

The factory will be established in the Integrated Sokhna Zone at Ain Sokhna on the Red Sea, an ideal location for the project due to its strategic, logistical, infrastructure, and policy advantages.

The zone is a prime logistics and export hub, located along the Suez Canal, which accounts for an average of 12% of global trade. The site also directly connects its industrial area to Sokhna Port, enabling easy import of feedstocks, particularly used cooking oil, which will be utilised to produce sustainable jet fuel and then exported to the international market.

Growing partnership

The new deal is part of billions of dollars in investment pledges from Doha to Cairo over the past months, reflecting a strengthening partnership.

These new investments build on broader economic cooperation between the two capitals, with total existing Qatari investments in Egypt reaching around $3.2 billion across a wide range of sectors, including finance, industry and tourism.

In April this year, Qatar pledged $7.5 billion in direct investments to Egypt during a visit to Doha by Egyptian President Abdel Fattah al-Sisi.

In November, Qatari Diar signed a deal to establish a luxury development in the Semla and Alam al-Roum areas on Egypt's Mediterranean coast, including residential areas, hotels, golf courses, marinas, and schools.

With a total value of $29.7 billion, the deal includes a $3.5 billion cash payment to the Egyptian government by the end of this December.

This avalanche of Qatari investments, observers said, reflects improving relations between Egypt and Qatar, a development that serves the best interests of both states. 

"Such projects are very important for the [Egyptian] economy because they create jobs, bring in foreign currency and stimulate production," leading Egyptian economist Khaled al-Shafie said to TNA, citing "remarkable" investment opportunities in Egypt.

"Egypt stands at the crossroads of important markets in Africa and Asia," al-Shafie said. "In the past decade, it also revolutionised its infrastructure, turning into a suitable environment for businesses of all types."

"The two countries are developing a win-win model where Qatari money fuels Egypt's development," al-Shafie added.

He noted that, in return, Qatari companies benefit from Egypt's investment incentives and gain access to multiple markets through the preferential deals Egypt has signed with these markets.

"Egypt also possesses the largest market in the region, where a huge consumer base brings in assured profits for investors," he said.

The same investments come as Egypt struggles to overcome the toll that regional and international geopolitical developments are having on its economy.

Israel's war on Gaza and instability in the Red Sea have cost the Egyptian economy dearly, including the loss of revenues for the Suez Canal and tourism, amounting to over $13 billion during the two years of Israel's genocidal war.

Beyond economic cooperation, Cairo and Doha are also cooperating on many regional issues, including Gaza, where the two capitals partnered with the US to hammer out a ceasefire, albeit apparently one-sided, that took effect in mid-October between Hamas and Israel.

They are also cooperating with Washington to develop the controversial "stabilisation force" that will take over Gaza during the second phase of the deal.

This cooperation, Qatari political analysts say, is part of a changing regional landscape in which regional powers are finding ways to move beyond their differences and leverage their newfound amity to bolster regional stability and advance their own development interests.

"The regional landscape is undergoing swift change, the close Qatari-Egyptian cooperation being one of the most remarkable features of this change," Qatari political analyst Gaber Al Harami said.

Close political and diplomatic coordination between the two countries, he told TNA, also contributes to regional stability.

"Egypt's substantial political influence on both the Arab and the international stages, combined with Qatar's dynamic and proactive diplomacy, are actively contributing to this stability," Al Harami observed.