Following the wave of ESS orders going global, the Middle East, leveraging its determination for energy transition and strategic geographical advantages, has become a core hub for the overseas capacity expansion of China's lithium battery industry. Domestic leading enterprises have taken the lead in deploying the entire industry chain, creating deep synergy with the explosive demand in the Middle Eastern ESS market.
On the battery front, CORNEX New Energy is leading the charge. Public information indicates this will be CORNEX New Energy's first overseas joint-venture ESS battery plant.
According to foreign media reports on January 18, CORNEX New Energy signed a cooperation agreement with Egyptian industrial manufacturer Kemet. The two parties will collaborate to build an ESS battery factory in Egypt. Under the agreement, the core technology for the ESS battery factory will be provided by CORNEX New Energy. The project involves an investment of $200 million, and the factory is expected to achieve an annual capacity of 5 GWh upon completion.
On January 16, CORNEX New Energy officially announced the signing of strategic cooperation agreements with Egypt's WeaCan and Kemet. CORNEX New Energy, as the core technology and product supplier, will supply a total of 6 GWh of high-grade ESS products in phases. WeaCan and Kemet, as the core facilitators for project implementation, will leverage their deep local industry resources and mature project operation experience in Egypt to fully handle application scenario matching, government approval coordination, power grid connection support, and localized operation services.
Besides CORNEX New Energy, another energy storage system enterprise, Sungrow, also plans to build a BESS manufacturing plant in the TEDA industrial zone within the Suez Canal Economic Zone, covering an area of approximately 50,000 m². This is Sungrow's first production site in the Middle East and Africa. The factory is expected to create about 150 direct jobs, with production scheduled to commence in April 2027, targeting an annual capacity of 10 GWh.
On the materials front, electrolyte enterprise Capchem announced plans, via its wholly-owned subsidiary Capchem Middle East Company (abbreviated: Middle East Capchem), to invest in and construct a lithium-ion battery materials project in Saudi Arabia's Yanbu Industrial City. The total investment is approximately $260 million.
The project will establish production lines with an annual capacity of 200,000 mt of carbonate solvents and a co-production capacity of 100,000 mt of ethylene glycol. The construction period will not exceed three years, with funding sourced from the company's own funds, self-raised funds, or by introducing third-party strategic investors for joint investment.
The core driver attracting enterprises to head to the region for deep layout stems from the rise of the Middle Eastern ESS market. The region is accelerating its transition from an "oil empire" to a "zero-carbon oasis." Countries like Saudi Arabia and the UAE have set clear renewable energy targets; Saudi Arabia's "Vision 2030" requires supporting over 15 GWh of ESS, while the UAE is advancing the world's largest PV+ESS project. Regional ESS installations reached 1.2 GWh in 2023, with lithium batteries accounting for 75%. Driven by synergies with the green hydrogen industry and the need for power supply resilience during extreme weather, installations are projected to grow tenfold by 2030. Policy-wise, benefits such as tax exemptions in free trade zones and the relaxation of foreign ownership restrictions have further lowered the entry barriers for enterprises.
Overall, the Middle East expansion of Chinese lithium battery enterprises is not only an inevitable choice for their own globalization but also a crucial pathway to support regional energy transition. Despite challenges like high-temperature technical bottlenecks and localization barriers, as production capacity is established and technology adaptation matures, both sides will achieve a higher level of win-win cooperation in the field of green energy.
