The economic output of Egypt's construction industry is set to grow by 6.5% in real terms in 2025, driven by an increase in foreign direct investment and investment in oil and gas, industrial and housing projects, says a recently published report by UK analytics firm GlobalData.

The Central Bank of Egypt reported that the country's average construction production index grew by 9.2% year-on-year in the first two months of 2025, following an annual growth of 6.7% in 2024.

In March 2025, Siemens Gamesa Renewable Energy, a Denmark-based energy company, signed a power-purchase agreement (PPA) with the Egyptian Electricity Transmission Company (EETC) for a 500MW wind project in Ras Ghareb, Egypt. The project is currently in the planning stage.

Similarly, Acwa Power, a Riyadh-based utility developer and investor, signed a 25-year PPA with the EETC for a 2GW wind project in Egypt in February 2025. With an investment of $3bn, the project is expected to become the largest wind farm in Egypt.

The Egyptian government has ambitious plans for the renewable energy sector, aiming to develop 10GW of renewable energy projects by 2028 under the Nexus of Water, Food and Energy Programme.

The government also plans to increase the share of renewable energy in the electricity mix to 42% by 2040, up from 11.5% in 2024. To achieve this, the government plans to develop 32 hydrogen plants with a combined investment of $107.2bn by 2030.

The construction industry's output is expected to register an annual average growth rate of 7.6% in 2026-29, supported by investment in commercial, renewable energy and transport infrastructure projects.

The industry faces potential challenges, however, including the devaluation of the Egyptian pound against the US dollar, rising political tensions and escalating instability in the Red Sea, which could dampen investor confidence and strain the investment climate.