BII, AfDB, EBRD to provide $479.1m for Egypt solar and battery project
The financing will be provided to Obelisk Solar Power SAE, a special-purpose vehicle owned by Norwegian renewable energy developer Scatec ASA, to develop the facility in the country's Nagaa Hammadi region. The project, which will be Egypt's first integrated solar and battery storage plant of this scale, is expected to enhance grid stability and help manage peak electricity demand.
The total estimated capital expenditure for the project is $590m, with the blended financing package covering approximately 80 per cent of the cost. The plant is expected to generate around 3,000 GWh of clean energy annually, avoiding up to 1.4 million metric tonnes of carbon dioxide emissions per year and supporting Egypt's goal to have renewables constitute 42 per cent of its power mix by 2030.
The facility will be built in two phases by Scatec. The first phase, comprising 561 MW of solar capacity and a 100 MW/200 MWh battery energy storage system (BESS), is scheduled to begin operations in the first half of 2026. The second phase, with 564 MW of solar capacity, is planned to start in the second half of 2026.
Energy generated will be sold under a 25-year, US dollar-denominated power purchase agreement with the Egyptian Electricity Transmission Company, which is backed by a sovereign guarantee.
The financing from the three development finance institutions includes a mix of loans, concessional funding and grants.
The AfDB's financing package totals $184.1m. This includes $125.5m of ordinary resources, $20m in concessional funding from the Sustainable Energy Fund for Africa, and $18.6m from the Canada-African Development Bank Climate Fund. A further $20m will be channelled from the CIF's Clean Technology Fund through the AfDB.
The EBRD is providing a financing package of up to $173.5m. Of this, $101.9m will be supported by a European Fund for Sustainable Development (EFSD+) first-loss cover guarantee for the initial 18 years. This is supplemented by a $6.5m grant from the EBRD Shareholder Special Fund.
BII's contribution, subject to drawdown conditions, includes a $100m concessional loan and a $15m returnable grant intended to lower the cost of the battery storage component, making it more financially viable.
Sherine Shohdy, Head of Egypt Office and Coverage Director, BII, said: 'Our financing in this landmark project reflects BII's commitment to pioneering the next generation of renewable energy infrastructure to power Egypt's sustainable future. By powering local businesses with clean, reliable energy, we are supporting economic growth and job creation at the heart of communities. This builds on our $190 million agreement to finance the 1.1 GW Gulf of Suez Wind Farm, highlighting our pivotal role in driving the energy transition in Egypt and North Africa.'
Wale Shonibare, the AfDB's Director of Energy Financial Solutions, Policy and Regulations, noted: 'This project exemplifies the scale of renewable energy potential across Africa and demonstrates how strong partnerships and innovative solutions can advance the energy transition and foster sustainable economic development. It has a high demonstration and replication potential for similar initiatives across the continent.'
Harry Boyd-Carpenter, EBRD Managing Director for Sustainable Infrastructure, said: 'We are delighted to work with our longstanding partners Scatec, the AfDB and BII to support this transformative project. It takes Egypt's green energy transition to another level by harnessing the power of the sun, not just during the day but also at night, thanks to the combination of solar and battery storage. The project addresses the growing demand for electricity and reduces the need to import expensive fossil fuels. It contributes to the goals of Egypt's flagship Nexus on Water, Food and Energy that was launched at COP27 in Sharm el-Sheikh, and for which the EBRD is Egypt's leading partner on the energy pillar.'
Terje Pilskog, CEO of Scatec, commented: 'This project marks a major milestone for Scatec. It proves our ability to deliver large-scale hybrid projects. We are proud to partner with leading development finance institutions to support Egypt's clean energy ambitions, and we look forward to delivering this important project together with our partners.'
Stefano Sannino, Director-General of the Directorate-General for the Middle East, North Africa and the Gulf at the European Commission, said: 'Today, the European Union (EU) launches the EU-Egypt Investment Guarantee for Development Mechanism, a strategic platform designed to fast-track a significant pipeline of investment projects to deliver large-scale financing solutions in Egypt. This is a major milestone in the implementation of the EU-Egypt Strategic Partnership. This particular project is a concrete example of a fruitful collaboration between the EU and the EBRD for supporting green transition in the country, through a large-scale investment. The EU guarantee allows the EBRD to provide a loan alongside other financiers to finance an innovative integrated solution which can attract private investors.'
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