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Signing of a Loan Agreement for the Kom Ombo Solar Power Project in Egypt (Private Sector Investment Finance): Contributing to climate change mitigation by increasing the 500 MW renewable energy supply – EQ Mag

Signing of a Loan Agreement for the Kom Ombo Solar Power Project in Egypt (Private Sector Investment Finance): Contributing to climate change mitigation by increasing the 500 MW renewable energy supply – EQ Mag

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On November 30, the Japan International Cooperation Agency (JICA) signed a project finance loan agreement with Abydos Solar Power Company SAE in the Arab Republic of Egypt for the Kom Ombo solar power project. The project will be co-financed by the International Finance Corporation (IFC).

Egypt has been actively increasing its power-generation capacity, mainly that of thermal power, to meet the growing demand for electricity driven by the country’s economic growth. Currently, thermal power accounts for 90% of Egypt’s power supply, and hydropower and renewable energy sources each account for only 5%, leaving the country dependent on fossil fuels. Under these circumstances, the Egyptian government has set a policy to significantly increase the share of renewable energy in order to reduce the environmental burden, take advantage of Egypt’s abundant solar radiation, and enhance energy security with sustainability. The diversification of power sources, namely from renewable energy, is a pressing issue in Egypt.

This project aims to use renewable energy sources to increase the electricity supply by constructing and operating a 500 MW solar power plant in Kom Ombo, Aswan Governorate, southern Egypt, thereby contributing to climate change mitigation by reducing CO2 emissions in the country. This project will also contribute to SDGs (Sustainable Development Goals) Goals 7 (Affordable and clean energy), 13 (Climate action), and 17 (Partnership for the goals).

Egypt hosted the 27th Conference of the Parties (COP27) to the United Nations Framework Convention on Climate Change in November 2022. At the conference, all countries stressed the need for measures to reduce greenhouse gas emissions, against a backdrop of serious damage caused by extreme weather events around the world, and some developed countries pledged their support. This project is JICA’s first since COP27 to contribute to the reduction of greenhouse gas emissions in response to the outcome of the conference, showing the agency’s strong commitment to aiding Egypt’s climate change efforts. It is a major part of the Energy Pillar of the Nexus of Water, Food and Energy (NWFE), the flagship Egypt initiative at COP27 that aims to accelerate the national climate agenda.

JICA has been supporting Egypt’s power sector in various ways through ODA loans and technical cooperation projects. Those projects include the development and management of the power supply, as well as of the transmission and distribution networks covering the Upper Egypt region among others, support for improvements in the restoration of the power sector, strengthening of the country’s financial sustainability, the promotion of governance reforms, and enhancing energy efficiency. Building on such support, this project will boost renewable-energy projects using private sector funds and further support Egypt’s power sector.

Source: jica
Anand Gupta Editor - EQ Int'l Media Network