A consortium led by Oslo Stock Exchange-listed Scatec Solar ASA has announced that it has reached financial close for a $335m financing for six solar PV projects with combined capacity of 400MW at the Benban solar complex in Egypt. Construction is expected to begin in early 2018.
The group of lenders includes the European Bank for Reconstruction and Development (EBRD), Dutch development FMO, the United Nations’ Green Climate Fund (GCF), the Islamic Corporation for the Development of the Private Sector, and the Islamic Development Bank.
The projects form part of the second round of Egypt’s solar feed-in tariff programme, which approved 33 projects for development. Most of the projects were held over from the first round, which saw a number of problems emerge, particularly around the issue of currency convertibility and the tariff, and involves three projects which are in construction and expected online later this year or early next year.
According to Scatec, the GCF’s $48m funding is the single largest disbursement to a single project recipient, and the first to take place under a cooperation agreement signed with EBRD in April 2017. GCF private sector facility director Ayaan Adam said that “this is a big step forward. It shows the potential for public and private climate finance to drive the low emission energy transition in support of Egypt’s climate goals”.
The six plants – which are owned by Scatec Solar, Norfund, and Africa50 – represent a combined investment of $450m and are expected to produce 870GWh of electricity each year. Power purchase agreements were signed in April this year. Scatec Solar will be the turnkey engineering, procurement, and construction provider, as well as being the operations and maintenance contractor and the asset manager for the plants.
“With this programme, the government of Egypt is making important steps towards accessing clean and low-cost electricity to drive development and economic prosperity”, said Scatec Solar chief executive Raymond Carlsen. “Scatec Solar and partners are making significant investments and a long-term commitment to Egypt”.
