- Funding comes from a consortium of lenders including European Bank for Reconstruction and Development, OPEC Fund for International Development and the African Development Bank
Egypt has secured funding for the construction of its largest solar plant from a consortium of lenders which includes the European Bank for Reconstruction and Development (EBRD), the OPEC Fund for International Development, the African Development Bank, the Green Climate Fund and Arab Bank with ACWA Power as developer and investor.
The solar plant development for the Kom Ombo region will add 200 MW of energy capacity to the national power grid and thus increase the country’s renewable energy contribution to its energy mix.
According to reports, the package comprises loans of up to US$ 36 million from the EBRD, US$ 23.8 million from the GCF and US$ 18 million from Arab Bank. This is in addition to equity bridge loans of up to US$14 million which it is sourcing from EBRD and US$ 33.5 million from Arab Petroleum Investments Corporation.
The solar plant which will be located 20 km from Africa’s biggest solar park will serve 130,000 Egyptian households once operational.
Speaking on the agreement, 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.”
Meanwhile, OPEC Fund Director-General Abdulhamid Alkhalifa said of the financing: “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.”
On his part, the African Development Bank’s Vice President in charge of Power, Energy, Climate Change and Green Growth Kevin Kariuki said: “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 directly contributes towards the realization of Egypt’s ambitious renewable energy targets, in addition to being an excellent example of what stakeholders driven by a shared objective can achieve”.
The Kom Ombo solar plant will serve as part of the Egyptian government’s effort to generate 42 per cent of the country’s electricity from renewable energy sources by 2035 and is set to deliver one of the lowest generation tariffs on the continent.