Egypt’s largest solar plant gets $114m finance boost

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Multi-funder financing package signed to construct largest private solar plant in Egypt.

The European Bank for Reconstruction and Development (EBRD), the OPEC Fund for International Development (the OPEC Fund), the African Development Bank (AfDB), the Green Climate Fund (GCF) and Arab Bank this week signed a $114m financing package with ACWA Power for the construction of the largest private solar plant in Egypt.

The development of the Kom Ombo solar plant will add 200 MWh of energy capacity, increasing the share of renewable energy in Egypt’s energy mix and further promoting private sector participation in the Egyptian power sector.

The package comprises loans of up to $36m from the EBRD, $18m from the OPEC Fund, $17.8m from the AfDB, $23.8m from the GCF and $18m from Arab Bank. This is in addition to equity bridge loans of up to $ 14m from EBRD and $33.5m from Arab Petroleum Investments Corporation.

The new Kom Ombo plant will be located less than 20km from Africa’s biggest solar park, the 1.8 GWh Benban complex. Once operational, the new utility-scale plant will serve 130,000 households.

ACWA Power submitted the lowest tariff in what was the first solar photovoltaic tender in Egypt. The provision of solar energy through a public tendering process aims to achieve a competitive tariff and promote the growth of solar energy as an affordable alternative to conventional energy sources.

Private sector participation in the Kom Ombo project is the result of successful policy dialogue with the Ministry of Electricity and Renewable Energy and the Egyptian Electricity Transmission Company, as well as a $3.6m technical assistance programme, co-funded by the EBRD and the GCF, to support the EETC in administering competitive renewable energy tenders. In addition, the project has also benefitted from broader energy sector reforms supported by the AfDB in recent years to scale up the involvement of the private sector.

Commenting on the deal, EBRD president Odile Renaud Basso, said: “We are very happy to team up again with ACWA Power in Egypt, after our successful partnership in Benban, to promote renewable energy in Egypt. Increasing the production of clean energy is an important step to reducing carbon emissions and addressing climate change. This is in line with the EBRD’s strategy to become a majority green bank by 2025. This project also marks the EBRD’s first co-financing project with the AfDB and the OPEC Fund in Egypt and we look forward to future joint investment opportunities for our institutions across Africa.”

Abdulhamid Alkhalifa, OPEC Fund director-general, said: “We are pleased to contribute to Egypt’s efforts and strategy to expand its generation capacity in the renewable energy space. We have been at the forefront of advocating for access to affordable clean energy for many years. Kom Ombo will be our third project with ACWA Power and it exemplifies great cooperation between government, development finance and private-sector actors.”

Kevin Kariuki, AfDB vice president of power, energy, climate change and green growth, commented: “The Kom Ombo solar project is a truly remarkable transaction. It not only clearly demonstrates the indisputable competitiveness of solar PV vis-à-vis conventional sources of generation, but it also contributes directly to the realisation of Egypt’s ambitious renewable energy targets, in addition to being an excellent example of what stakeholders driven by a shared objective can achieve.”