Exclusive interview with Karim Badr, former CEO of the Sovereign Fund of Egypt’s Infrastructure and Utilities Subfund and now a Green Projects Development Consultant, Egypt. An advisory board member for Africa’s Green Economy Summit, Karim will also be part of the green hydrogen session in the upcoming event in February 2024.
Let’s start with some background on you. You have extensive experience in green financing.
Good morning. I am the ex-CEO of the Sovereign Fund of Egypt’s Infrastructure and Utilities Subfund. I spent three and a half years there and before that I worked in infrastructure investments for about 20 years, starting with a boutique investment bank in Egypt and some debt capital markets at Barclays Capital. Followed by that I did 10 years of project financing and development at one of Egypt’s private equity boutiques specialised in infrastructure investments in Africa. At that time, in 2011, we did the development and execution of Africa’s largest petrochemical deals. At the time, it was the second-stage refinery in Egypt to substitute the imports by the Egyptian government in the oil and gas industry. Followed by that I did my MBA at the Columbia Business School. I then moved to Dubai, spent 4 years with GE, doing product development and finance for the gas power business in the Middle East and South Asia. And then finally, I was at the Sovereign Fund of Egypt where my mandate was really to look at how to scale and develop infrastructure investments in Egypt.
A lot of what I’ve done was to develop projects that required financing, especially green financing. This is particularly of interest, because today, when we speak about infrastructure, everyone is looking at green infrastructure, how can we mitigate or adapt to the challenges of climate change to the challenges of reaching decarbonisation and becoming carbon neutral. I think at the Sovereign Fund of Egypt, the two main elements that took a lot of my time were green desalination, whereby I helped launch Egypt’s desalination programme; basically 8.8 million cubic metres to be developed over the next 20 years. And this was a huge step for Egypt, as historically we have been dependent on the Nile water.
Then the second project that was launched in Egypt was the hydrogen programme. I think that’s a milestone and an event that I’m extremely proud of. We started with signing 22 MOUs with different developers across the world, and then we closed that with nine framework agreements being executed at COP27 at Sharm el-Sheikh. So, a lot has been done on the green side, and I’m happy to continue that journey.
What are your views on green hydrogen’s role in the green economy in the future.
Of course, I’m super excited about green hydrogen. As I said, I spent a good part of the last few years at the Sovereign Fund of Egypt primarily focusing on green hydrogen. I believe that hydrogen, and not just hydrogen, but hydrogen and the fuels that are downstream from it, are the new oil. I believe this is the future; I believe that the world will move to this permanent, sustainable, clean source of fuel that will power earth for the future and the future generations to come. In my view, the theme of Power-to-X, whereby we’re using renewables to really channel many, many downstream industries out of it is huge.
If you look at what the challenges were with renewables in the past, it was primarily that you cannot export renewables. There was a local element: people and countries who had good renewable resources were able to benefit only on a local basis. But, with hydrogen and green fuels that are downstreamed out of it, you can now export green electrons to the world in that form. And I think that’s why this whole revolution has started. Hydrogen can be used in many applications, such as aviation fuels, long-haul transportation fuel, power generation to substitute natural gas as well as many applications, not just in the fertilisers industry, but green steel, decarbonising the steel industry, we can reach green aluminium and green cement—all of these historically, pollutant elements and industries are now really decarbonising. So, it’s huge. I believe the world is yet to see what’s going to happen. We’re just at the very early stages of green hydrogen, but I have no doubt in my mind that it will take over the green economy in the future, 100%.
Which African countries are doing the right things in your opinion?
I think a lot of the African countries are doing a fantastic job when it comes to the potential of green fuels and green economies. I believe the whole continent has the right elements to benefit from. And I think this could really be a game changer for Africa. But if I have to pinpoint some of the countries, of course, countries like Morocco, Mauritania, Namibia, South Africa, Egypt, and to certain extent, Djibouti and other countries, these really have been the hotspots when it comes to green hydrogen and green economy. Combining just these five, six countries can produce something close to 50 million tonnes of green hydrogen by 2030. I think that is huge. And if you export two-thirds or half of that and benefit locally in Africa from the remaining portions, you are just transforming your whole economy when it comes to exports, but also when it comes to importing substitutes of hydrocarbons. So, I look forward to other countries joining this ride and really taking the whole African continent forward.
What keeps you excited about this industry?
Well, what keeps me excited about this industry, is really the fact that we’re still scratching the surface. I think the world is yet trying to mitigate technology risks when it comes to green hydrogen and its downstream green fuels. We’re still scratching the surface when it comes to technology and technology risks, and how to really do this in an efficient and cost-effective way.
Second, we are also still in the very early stages when it comes to the market. We do not have a market for green fuels; people are still wondering at what price they will sell their fuels and their products. But if that market develops, if that technology risk reduces, and will really bridge the gap between hydrocarbons and green fuels when it comes to pricing, you will see a whole transformation. Today, a lot of industries and companies in the world say that they want to reach zero carbon emissions, or they want to be carbon neutral or they want to decarbonise. All of these targets will never be achieved unless we reach the right formula when it comes to cost. What is being announced is one thing and what is being decided in board meetings is another. Unless we can produce a green fuel that is competitive with grey fuels, I don’t think we would be able to reach that.
So, a lot is yet to be done, things are going to move maybe not as quickly as some people hoped, but there will be a lot of progress. And I’m just happy to be in the midst of all of that. And what we are going to see over the next, I think, 20 years is going to be a transformational, globally.
You are an advisory board member for the next Africa’s Green Economy Summit in 2024 and part of the green hydrogen session on the programme. What will be your message at the event?
Well, first of all, I’m very proud to be chosen as an advisory board member for the next Africa’s Green Economy Summit in 2024 in Cape Town. It’s a fantastic team that I’m working with. My message during the summit, and specifically in the green hydrogen session, will really be how to bring the different elements together to make this industry a reality as soon as possible; whether regulatory, corporate, manufacturing, suppliers, financiers, the DFIs, all the stakeholders. I think everybody has a role to play. And we’re all as quick as the slowest player in these stakeholders. So, let’s all have a target, and let’s all try to achieve this target by really making sure that by 2030, which is 7 years from today, and during the conference will be 6 years from today, we have what we targeted to be the production of green fuels in the world. I think the continent will play a huge role to supply that to Europe.
In my view, we might not hit the 50 million tonnes target, but we should definitely be around the 30 million tonnes target. So, my message is: Let’s all work together to produce at least 30 million tonnes of hydrogen from Africa by 2030 at a competitive price that is that is acceptable and sellable in Europe.
How important is such an event for the continent in your view?
Look, it’s a fantastic event, and I think it’s important because it brings all the stakeholders in one room. I think this is the key for such events; you really are making sure that people are having the right conversations and that people are meeting the right counterparts in order to make projects ideas a reality.
I think this conference is especially close to my heart, because it’s not your typical conference. It’s not people sitting in sessions saying the same words over and over again. I think the organisers realise the importance of networking, so they’ve dedicated one full hour between sessions for coffee breaks, where people can really network and make use of the people around the room that are attending the conference. The quality of the people, speakers, delegates and so forth is also very impressive.
So, I think this is an important event for the continent that will shape many of the projects that are going to develop over the next few years. So, I’m really looking forward to meeting you all in Cape Town in February 2024.
Anything you would like to add?
I would like to conclude that we’re all lucky to be witnessing this revolution when it comes to the green economy. I think we’ve seen the Industrial Revolution. We’ve seen the technological revolution, and now we’re seeing the climate revolution. What the world is going to do over the next few years is going to shape how the economy of the world is going to differ and become for the future. So, it’s an exciting ride. Let’s all enjoy it. Thank you.
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