Saudi Arabia-based energy company ACWA Power has signed a deal with multiple international investors for the provision of funds to implement what is claimed to be the largest private-sector solar energy project in Egypt.
As a result of the signed financing package, ACWA Power will receive $114 million from 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.
The EBRD will provide ACWA Power with a $36 million loan whilst OPEC will provide $18 million, the AfDB $18.8 million, the GCF $23.8 million and the Arab Bank $18 million. This is in addition to equity bridge loans of up to $14 million from EBRD and $33.5 million from Arab Petroleum Investments Corporation.
The project will add 200MW of renewables capacity to the Egyptian grid. The financing deal highlights the importance of the private sector in accelerating Egypt’s energy transition.
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 (EETC), as well as a $3.6 million 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.
Once complete, the new Kom Ombo plant will serve 130,000 households. The project will be located less than 20 km from Africa’s biggest solar park, the 1.8GW Benban complex.
ACWA Power submitted the lowest tariff in what was the first solar photovoltaic (PV) 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.
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.”
OPEC Fund Director-General Abdulhamid Alkhalifa adds: “Kom Ombo will be our third project with ACWA Power and it exemplifies great cooperation between government, development finance and private-sector actors.”
Paddy Padmanathan, President and Chief Executive Officer of ACWA Power, said: “Kom Ombo PV is the fourth project in ACWA Power’s Egyptian portfolio and the conclusion of this financing demonstrates the confidence in the Egyptian government’s ambitious renewable energy plans, being implemented through private-sector participation.”