M&A Activity • Jul 1, 2024
M&A Activity
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Yara Clean Ammonia, Scatec, ECHEM and MOPCO signs Heads of Terms for renewable ammonia offtake agreement in Egypt
Oslo and Cairo, 1 July 2024: Scatec ASA, a leading renewable energy solutions
provider, and its partners, ECHEM and MOPCO, have agreed on Heads of Terms for
renewable ammonia offtake from Egypt with Yara Clean Ammonia, the world's
largest trader- and distributor of ammonia.
Last year, Scatec, the Egyptian Petrochemicals Holding Company (ECHEM) and Misr
Fertilizers Production Company (MOPCO) (the "Sponsors") entered into a joint
development agreement and a shareholder agreement for the production of
renewable ammonia.
The Sponsors will develop and build up to 480 MW of renewable energy and an up
to 240 MW electrolyser facility for production of renewable hydrogen, which will
be used as feedstock for production of renewable ammonia at MOPCO's existing
ammonia production facility at Damietta in Egypt. The targeted production
capacity is up to 150,000 tonnes of renewable ammonia per annum.
Scatec also signed a letter of Intent with the European Investment Bank ("EIB")
for long-term financing for the project, showcasing EIB's commitment to support
renewable hydrogen and renewable ammonia projects in Egypt.
"We are very pleased to be signing this Heads of Terms with global industry
leader Yara Clean Ammonia. This is a testament to Scatec's position in Egypt and
our strategy to focus on developing renewable hydrogen projects related to
existing ammonia production capacity. Scatec will bring their expertise and
experience gained from other projects. We are looking forward to our future
collaboration," says Scatec CEO Terje Pilskog.
"Yara Clean Ammonia has a diversified portfolio of asset backed and offtake
agreements for low-emission ammonia. This project will further strengthen our
sourcing portfolio of renewable ammonia and is a testimony to Yara Clean Ammonia
as the most preferred off-taker as the world's largest trader and distributor of
ammonia. Once the project has reached a final investment decision, the renewable
ammonia from this project will help us reliably serve our customers across
several market sectors," says Yara Clean Ammonia CEO Hans Olav Raen.
Today's signature is a further step towards our efforts in working with our
partners from the private sector to support translating Egypt's national low
carbon hydrogen strategy into action through specific projects," said Egyptian
Minister of Petroleum and Mineral Resources, H.E. Tarek El Molla. "Such
collaboration and partnerships will help secure renewable hydrogen investments,
de-risk implementation of projects and facilitate realizing Egypt's vision of
becoming a regional and global green hydrogen hub."
"We are excited to embark on this significant project in collaboration with
Scatec and MOPCO. This agreement with Yara Clean Ammonia not only underscores
our commitment to sustainable energy solutions but also marks a substantial step
forward in our mission to innovate within the petrochemical industry. The
development of renewable ammonia from this project aligns with our strategic
goals and will contribute to a greener future for Egypt and beyond," says ECHEM
President & Chairman Eng. Ibrahim Mekki
"Misr Fertilizers Production Company "MOPCO", one of the major ammonia and urea
producers in MENA, is working together with their partners, ECHEM and Scatec
ASA, to develop a major renewable ammonia production facility in Egypt through
Damietta Green Ammonia Company, "DGA", that was recently established by the
three parties. The facility will produce approximately 150,000 metric tons of
renewable ammonia for export in the international market through the well-known
global off-taker, Yara Clean Ammonia. As one of DGA shareholders, MOPCO, is
pleased to announce the signature of the Heads of Terms for this flagship
ammonia offtake with Yara Clean Ammonia," says MOPCO Chairman and Managing
Director Eng. Ahmed Mahmoud El-Sayed
"Enabling industry to harness renewable energy is key for the green transition.
Accelerating renewable hydrogen production in Egypt can strengthen business
competitiveness and unlock opportunities to export renewable hydrogen. The
European Investment Bank looks forward to working with Scatec and project
partners to unlock large scale renewable hydrogen investment across Egypt," says
EIB Vice President Gelsomina Vigliotti.
For further information, please contact:
Yara Clean Ammonia:
Media inquiries: Hilde Steinfeld, [email protected]
(mailto:[email protected]), mobile: +47 99 35 30 30
Investor relations in Yara Int.: [email protected] (mailto:[email protected])
Scatec:
Investor relations: Andreas Austrell, [email protected]
(mailto:[email protected]), mobile: +47 974 38 686
Media inquiries: Meera Bhatia, [email protected]
(mailto:[email protected]), mobile: +47 468 44 959
About Yara Clean Ammonia (YCA)
Yara grows knowledge to responsibly feed the world and protect the planet. Yara
Clean Ammonia is uniquely positioned to enable the hydrogen economy in a market
expected to grow substantially over the next decades. We aim at significantly
strengthening our leading global position as the world's largest ammonia
distributor, unlocking the green and blue value chains, and driving the
development of clean ammonia globally.
Building on Yara's leading experience within global ammonia production,
logistics and trade, Yara Clean Ammonia works towards capturing growth
opportunities in low-emission fuel for shipping, power generation, low-carbon
food production and ammonia for industrial applications.
Yara Clean Ammonia operates the largest global ammonia network with 15 ships and
has, through Yara, access to 18 ammonia terminals and multiple ammonia
production and consumption sites across the world. Revenues and EBITDA for the
FY 2023 were USD 1,9 billion and USD 101 million respectively. Yara Clean
Ammonia is headquartered in Oslo, Norway.
www.yaracleanammonia.com (http://www.yaracleanammonia.com/)
About Scatec
Scatec is a leading renewable energy solutions provider, accelerating access to
reliable and affordable clean energy emerging markets. As a long-term player, we
develop, build, own, and operate renewable energy plants, with 4.6 GW in
operation and under construction across four continents today. We are committed
to grow our renewable energy capacity, delivered by our passionate employees and
partners who are driven by a common vision of 'Improving our Future'. Scatec is
headquartered in Oslo, Norway and listed on the Oslo Stock Exchange under the
ticker symbol 'SCATC'. To learn more, visit www.scatec.com
(https://scatec.com/) or connect with us on LinkedIn
(https://www.linkedin.com/company/scatec).
About ECHEM
The Egyptian Petrochemicals Holding Company (ECHEM) was established in January
2002 to manage and develop the Petrochemicals industry in Egypt through new
promising areas of investment. ECHEM priority is to enhance the growth of
Petrochemical industry through implementing The National Petrochemicals Master
Plan with the target of realizing the optimum utilization of natural gas in
value added products. ECHEM is entitled to develop a competitive petrochemicals
industry based on local human and natural resources, using state-of-the-art
technology and through implementing a pre-set flexible strategy. ECHEM seeks a
high standard of performance, etching a prominent position in the competitive
environment, and aims for efficient and sustainable use of natural resources. To
learn more, visit www.echem-eg.com
About MOPCO
Misr Fertilizers Production Company "MOPCO" is considered as the largest
producer of nitrogen fertilizer products in Egypt and one of the major producers
of these products in MENA. It was established in 1998 on plot of 400,000 m2
inside Damietta Public Free Zone next to Damietta port located in the middle of
the world, with assets exceeding 50 billion Egyptian Pounds.
MOPCO specializes in the production of urea as a basic product with 2 million
tons production capacity per year and anhydrous ammonia as an intermediate
product with 1.2 million tons capacity per year through their three plants using
advanced EU technologies that achieves the highest levels of product quality,
safety, and environmental protection. MOPCO is exporting approximately 50% of
its urea production and 40% of its anhydrous ammonia production to the
international markets especially EU, while 50% and 60% of its production of urea
and anhydrous ammonia respectively are sold in the local market.
This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act.
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