Africa50 reaches financial close for solar plants in Egypt

Egypt solaThe project aims to diversify Egypt’s power generation mix while lowering greenhouse gas emissions. (Image source: AfDB)Africa50, the AfDB’s infrastructure fund for Africa, has signed financing documentation with Scatec Solar and Norfund for developing 400MWDC utility scale photovoltaic (PV) power plants in Egypt for which they had previously entered into a joint development agreement (JDA)

The project, which was developed under the second round of the Egyptian feed-in tariff programme, reached financial close on 27 October 2017.

With a 25 per cent stake, Africa50 is contributing equity to fund construction alongside Scatec Solar and Norfund, leveraging total funding of around US$450mn.

According to AfDB, senior debt will be provided by EBRD, FMO, the Green Climate Fund, the Islamic Development Bank and the Islamic Corporation for the Development of the private sector. The plants are supported by 25-year power purchase agreements with the state-owned Egyptian Electricity Transmission Company (EETC). Access roads and interconnection facilities, which include substations and a 12km high voltage line, have already been funded collectively by the Benban project developers under a cost sharing agreement with EETC and the new and renewable energy agency.

The investment aims to support Egypt’s ongoing reform of the power sector, with a focus on cost effectiveness, expanded and diversified generation and increased private sector participation.

At present, Egypt’s generation capacity is still more than 90 per cent thermal. The six plants are expected to generate around 900,000 MW hour of clean PV electricity annually, aiming to avoid emissions of more than 350,000 tonnes of CO2.

In addition, the partners will also provide trainings to the local workers for plant construction and operation as much as possible.

Akinwumi Adesina, president of the AfDB and chairman of Africa50, said, “The project is the fund’s first early stage investment through its project development arm to be converted into a long-term equity investment made by its project financing arm. This investment contributes significantly to AfDB’s High 5 priority of increasing access to power in Africa and demonstrates how Africa50 can use its capital to leverage substantial resources from other partners to fund much needed infrastructure.”

Alain Ebobisse, CEO of Africa50, further explained, “This project is a good example of how Africa50, working with effective partners such as Scatec and Norfund, as well as the Egyptian authorities, can facilitate infrastructure project development in Africa.”

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