South Korea had agreed to give Egypt a $1 billion loan to fund a variety of projects.
The Tokyo-based magazine Nikkei Asia reported on January 21 that South Korea had agreed to give Egypt a $1 billion loan to fund a variety of projects, including efforts to bolster the North African country’s infrastructure for renewable energy. This news came on the heels of an early January announcement that Korea Hydro and Nuclear Power, a subsidiary of a South Korean state-owned enterprise, would provide equipment to Egypt’s first nuclear power plant.
South Korea’s interest in the renewable energy industry in Egypt may come as a surprise, given that the North African country hardly represents South Korea’s closest business partner in the Middle East. The East Asian country exported just $1.74 billion in goods to Egypt in 2019, compared to $3.94 billion to Saudi Arabia and $3.61 billion to the United Arab Emirates that same year.
Moon had also visited Riyadh and Abu Dhabi before arriving in Cairo, indicating that South Korea may see Egypt as just one more stop on a regional tour of opportunities for investment.
However, even if Egypt must compete with its neighbors for South Korea’s attention, a long-term partnership offers obvious benefits for Cairo and Seoul alike. Egypt intends to derive 20 percent of its electricity from renewable energy this year and 42 percent by 2030. South Korea, which gets a meager 6.4 percent of its electricity from renewable resources but aims to triple that number by 2030, stands to gain from any collaboration with Egypt in this field.
Egypt intends to derive 20 percent of its electricity from renewable energy this year and 42 percent by 2030.
Moon’s visit to Cairo coincided with the Egyptian-South Korean Business Conference on the Green Economy and the Future. Attendees ranged from Egyptian and South Korean executives and officials to Egyptian Prime Minister Mostafa Madbouly and even President Moon himself.
According to the Egyptian State Information Service, Moon gave a speech at the gathering that voiced “his desire to enhance cooperation between the two countries in the field of electric cars and renewable energy, as well as the participation of Korean companies in environmentally friendly infrastructure projects.”
Despite and perhaps because of the weakness of the renewable energy industry in South Korea, Moon has made strengthening partnerships in this sector a priority. Sustainable energy became a central theme of his trip to the Middle East, with the South Korean wire service Yonhap News Agency reporting that he mentioned the topic on each leg of his journey. In Saudi Arabia, for example, he discussed the possibility of a project to produce green hydrogen.
In Egypt, South Korea’s best-known companies will play a leading role in any joint ventures on renewable energy. Moon’s delegation to the Middle East comprised representatives from Doosan Heavy Industries and Construction, Hanwha Techwin, Hyundai Rotem, Myoungshin Industry, and Samsung Electronics. Doosan and the South Korean firms Hyundai Engineering and Construction and KEPCO E&C may also support the development of the El Dabaa Nuclear Power Plant (DNPP), a $25 billion initiative on Egypt’s Mediterranean coast.
The inclusion of nuclear power in programs for climate change mitigation remains controversial. However, the DNPP — a project in the making since the late 1970s — could offer a significant contribution to the reduction of Egypt’s greenhouse gas emissions. “The generation of electricity from nuclear energy is one of the most important uses by generating clean and economically competitive energy,” the Egyptian Nuclear Power Plants Authority notes on its website.
The inclusion of nuclear power in programs for climate change mitigation remains controversial.
Notwithstanding South Korea’s lagging investment in renewable energy at home, the East Asian country has significant expertise in the field of nuclear power, which supplied 18.2 percent of its energy in 2020. South Korea is also pouring hundreds of millions of dollars into small modular reactors, a technology of interest to Egypt.
Egypt and South Korea concluded memoranda of understanding on nuclear energy in 1982 and 2008. Cooperation seems likely to continue at least until the first unit of the DNPP begins operations, now set for 2026.
This budding partnership comes as Egypt prepares to host the 27th session of the United Nations Climate Change Conference (COP27) in November 2022. COP26 resulted in commitments to climate change mitigation that environmentalists derided as far short of what the international community needs to do to prevent the most catastrophic effects of global warming. Egypt and South Korea’s alliance on renewable energy, on the other hand, may provide environmentalists with more reason for optimism at COP27.
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For all the promise of South Korea’s partnership with Egypt, officials in Seoul are struggling to match the resources of their longtime Chinese competitors. Though reports have highlighted South Korean interest in developing solar energy in Egypt, including solar-powered desalination plants, these initiatives pale in comparison to China’s. In recent years, Chinese companies have undertaken plans to construct solar parks throughout the North African country, and Egypt joined China in launching a research center dedicated to the study of renewable energy.
In such a competitive environment, South Korea may seek to leverage its ties to other players in the Middle East. The Emirates, where Moon said, “I hope that UAE and South Korea’s hydrogen cooperation will bring forward carbon-neutral, sustainable futures,” will host COP28 next year. While South Korea’s upcoming presidential election means that Moon’s time in office is coming to a close, his successor will likely maintain these eco-friendly ties to the Middle East.
The ceaseless worsening of the climate crisis has yielded a variety of new geopolitical partnerships, with Egypt and South Korea’s just marking the latest. These unlikely allies can help one another achieve carbon neutrality before the world suffers the worst consequences of global warming, for both countries recognize that it poses an existential threat to their societies.
By working together, Egypt and South Korea stand the best chance of weathering the climate crisis. Otherwise, global warming will devastate North Africa and East Asia alike.