The EBRD, the Green Climate Fund (GCF) and the Dutch Development Bank (FMO) are supporting the expansion of renewable energy in Egypt with a US$ 87 million syndicated loan to Infinity Solar Energy SAE, an Egyptian renewable energy developer, and to ib vogt GmbH, an international solar developer established in Germany.
The funds will be used to construct and operate two solar photovoltaic power plants with a total capacity of 80 MW located at the Benban complex in Upper Egypt, which on completion will be the largest solar installation in Africa, with a planned total capacity of 1.8 GW.
Each development will be funded through loans of US$ 87 million under an A/B structure, comprising EBRD A Loans of US$ 58 million, of which US$ 44 million will be from the Bank’s own account and US$ 14 million from the Green Climate Fund. FMO will provide B Loans of US$ 29 million. The development consortium was supported by Synergy Consulting and Solizer, which acted as transaction advisors for the two projects.
The investment is part of the EBRD’s US$ 500 million EBRD framework for renewable energy in Egypt, adopted by the Bank’s Board of Directors earlier this year. The framework aims to develop Egypt’s potential in renewables and strengthen private sector involvement in the power and energy sector.
Support for the framework has been provided by the Southern and Eastern Mediterranean (SEMED) Energy Efficiency Policy Dialogue Framework, funded by the European Union’s Neighbourhood Investment Facility, and the SEMED Multi-Donor Account.
Harry Boyd-Carpenter, Head of Power and Energy Utilities for the EBRD, said: “We are delighted to welcome Infinity and ib vogt as new partners in this important project, which will significantly change the way that Egypt generates energy. The expansion of renewables is crucial not only for the environment, but also for the wider economy. It will create jobs, increase energy security and reduce the burden on the economy. The introduction of a regulatory framework that private investors can rely on will ensure that all this happens at sustainable cost and affordable prices.”
Ayaan Adam, Private Sector Facility Director for the Green Climate Fund, commented: “This first investment with the EBRD under our Egypt Renewable Energy Financing Framework project is a big step forward. It shows the potential for public and private climate finance to drive the transition to low-emission energy in support of Egypt’s climate goals.”
Mohamed Mansour, CEO of Infinity Solar, said: “We are delighted to collaborate with the EBRD and its partners GCF and FMO on these two projects under the Egyptian feed-in tariff programme. We see this cooperation as a big step in achieving our capacity goals for the Egyptian market, and hope to see many more projects in the near future.”
Anton Milner, Managing Director of ib vogt, added: “We strongly appreciate the very constructive cooperation with our financing partners on these important projects. The successful application of public and private climate financing is key in driving the deployment of sustainable, low-emission energy technologies both for Egypt and on a global scale. Our companies are expanding rapidly and we welcome the initial cooperation for our next round of Egyptian projects – where we are already constructing the country’s first utility-scale solar facility – and also for the future.”
The EBRD is a leading multilateral development bank in the field of green investment. Together with the GCF, the Bank signed an agreement on cooperation in April 2017 that underscores the EBRD’s position as the largest single recipient of GCF resources and paves the way for more joint projects aimed at combating climate change in the Bank’s regions. In October 2016 the GCF decided to allocate US$ 378 million to support green investments by the EBRD.
Under its Green Energy Transition approach launched in 2015 the EBRD seeks to increase the volume of green financing from an average of 24 per cent of its annual business investment in the 10 years up to 2016 to 40 per cent by 2020.
To date, the EBRD has invested more than €3.7 billion directly in renewable energy, supporting 111 projects in 23 countries and funding more than 5.7 GW of capacity.
Egypt is a founding member of the EBRD and has been receiving funding since 2012. To date, the Bank has invested €2.7 billion in 51 projects in the country. The EBRD’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services, and support for transport services. The Bank has also provided technical assistance to more than 500 small and medium-sized local enterprises.