Brasilia’s state-run energy giant Petrobras has signed an agreement with Chinese engineering, procurement and construction contractor China Energy Engineering Group Company (Energy China) to pursue business opportunities in renewable energy and green hydrogen production.

The two companies have formed a working group to develop green initiatives. Joao Paulo Madruga, executive manager of Institutional Relations at Petrobras, will represent Petrobras in the working group.

Energy China president Lv Zexiang said his company would allocate the bulk of the $20 billion earmarked for investments outside China to develop renewable energies, as well as green hydrogen and ammonia production in Brazil.

Weeks ago, Shanghai-listed Energy China signed a memorandum of understanding with Saudi Arabian conglomerate Ajlan Bros and Morocco’s Gaia Energy to build a green hydrogen project in the south of the North African nation.

The project involves a green ammonia plant with future output of 1.4 million tonnes per annum — produced from about 320,000 tonnes of green hydrogen — with a 2 gigawatt photovoltaic solar plant as well as a 4 GW wind power project.

In early March, Egyptian Prime Minister Mostafa Madbouly announced Energy China would soon start building a $5.1 billion renewable energy project comprising a solar park and wind farm, along with a facility for electrolysing water and synthesising ammonia. When both phases are complete, it will be able to produce 140,000 tpa of green hydrogen.

The plant will aim to export ammonia to European markets, a move intended to relieve Egypt’s chronic foreign exchange shortage.