A consortium of financiers have signed a $ 114Million financing package with a Saudi energy developer for the construction of the largest private solar plant in Egypt.
The European Bank for Reconstruction and Development (EBRD), the OPEC Fund), the African Development Bank (AfDB), the Green Climate Fund (GCF) and Arab Bank on April 22, 2021 signed the funding package with ACWA Power, owned by Saudi businessmen and focused on solar projects in North Africa and the Middle East.
EBRD will provide the largest chunk of the financing, with up to $36Million in contribution. $ 23.8Million is expected from the GCF; the OPEC Fund contributes $18Million; $18Million from Arab Bank and the AfDB $ 17.8Million. Equity bridge loans of up to $14Million are coming from fEBRD with $ 33.5Million of similar facility from Arab Petroleum Investments Corporation.
The development of the Kom Ombo solar plant will add 200 MW of energy capacity, increasing the share of renewable energy in Egypt’s energy mix and further promoting private-sector participation in the Egyptian power sector.
The new Kom Ombo plant will be located less than 20 km from Africa’s biggest solar park, the 1.8 GW Benban complex. Once operational, the new utility-scale plant will serve 130,000 households.
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.
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 $3.6Million 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.
The Kom Ombo plant will contribute to the Egyptian government’s target to generate 42 per cent of the country’s electricity from renewable energy sources by 2035 while delivering one of the lowest generation tariffs on the continent.