The European Bank for Reconstruction and Development EBRD will invest in a green bond issuance of up to $340Million. The Bank’s participation will consist of up to $100Million in the form of a direct subscription in the Bond, and the provision of up to $30Million stand-by liquidity facility for the benefit of the participating private institutional investors. The Bond will obtain the verified certification from the Climate Bond Initiative (CBI) and will be the first private green renewables-backed bond issued in Egypt.
The Bond’s proceeds will support a portfolio of six operational solar power plants located in Benban, Egypt.
These projects “are ultimately owned 51% by Scatec ASA, 25% by Africa 50 and 24% Norfund”, the EBRD explains. Scatec ASA is a leading renewable power producer, headquartered in Oslo, Norway and listed on the Oslo Stock Exchange. The firm develops, builds, owns and operates solar, wind and hydro power plants and storage solutions, and has more than 3.5 GW in operation and under construction on four continents.
Africa 50 is an investment vehicle established to help bridge Africa’s infrastructure funding gap by facilitating project development, mobilizing public and private sector finance, and investing in infrastructure on the continent.
EBRD says that the impact of the transaction “arises from the Green and Inclusive qualities”. In the first instance, the investment is in an independently certified Green Bond; in the second, the “Sponsor will participate in the inclusion programme aimed at increasing access to skills and economic opportunities for young people of the rural areas near Benban in Egypt by introducing a certified training programme for agribusiness entrepreneurs. In addition it will promote workforce diversity by enhancing the role of women in the traditionally male-dominated local economy.
“The Bank’s additionality is mainly derived from: (i) the Bank is offering financing on reasonable terms and conditions, that is expected to close the funding gap and allows carrying out a successful fund-raising process, (ii) supporting the project’s access to the international capital markets in the context of uncertain market conditions by offering an innovative financing structure and providing comfort to international investors, and (iii) the conditionalities obtained by the Bank to enhance inclusion and environmental standards”.