Six development partners have signed an agreement worth US$ 114 million with ACWA Power for the construction of the largest private solar plant in Egypt.
The development of the Kom Ombo solar plant will add 200 MW of energy capacity to the national grid. This will increase the share of renewable energy in Egypt’s energy mix. Also, it will promote private-sector participation in the Egyptian power sector.
Notably, the package comprises loans of US$ 36 million from the European Bank for Reconstruction and Development (EBRD) and US$ 18 million from the OPEC Fund.
Also, the African Development Bank (AfDB) will provide US$17.8 million. Likewise, the Green Climate Fund (GCF) and the Arab Bank will also offer US$23.8 million and US$ 18 million respectively. This is in addition to equity bridge loans of up to US$ 14 million from EBRD and US$ 33.5 million from Arab Petroleum Investments Corporation (APICORP).
Kom Ombo to serve 130,000 households
Meanwhile, the location of the new Kom Ombo plant is 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.
Moreover, ACWA Power submitted the lowest tariff in the first solar photovoltaic (PV) tender in Egypt. The provision of solar energy through a public tendering process aims to achieve a competitive tariff. It will also enhance the growth of solar energy as an affordable alternative to conventional energy sources.
“We are very happy to team up again with ACWA Power to promote renewable energy in Egypt. Increasing the production of clean energy is an important step to reducing carbon emissions and addressing climate change. This is in line with the EBRD’s strategy to become a majority green bank by 2025. This project also marks the EBRD’s first co-financing project with the AfDB and the OPEC Fund in Egypt. We look forward to future joint investment opportunities for our institutions across Africa”.
EBRD President, Odile Renaud Basso
Egypt’s renewable energy target
Also, OPEC Fund Director-General Abdulhamid Alkhalifa was pleased to contribute to Egypt’s efforts to expand its renewable energy space. According to him, the Fund has been “at the forefront of advocating for access to affordable clean energy for many years”. He also indicated that Kom Ombo will be the Fund’s third project with ACWA Power. This, according to him, “exemplifies great cooperation between government, development finance and private-sector actors”.
Furthermore, Paddy Padmanathan stated that the financing package brought ACWA Power closer to Egypt and the finance partners. Mr. Padmanathan, CEO of ACWA Power, said “Kom Ombo PV is the fourth project in ACWA Power’s Egyptian portfolio”. According to him, the conclusion of this financing demonstrates the confidence in the Egyptian government’s ambitious renewable energy plans.
Also, Nemeh Sabbagh, CEO of Arab Bank lauded the financing package with Egypt. He stated that “green financing is one of our strategic focus areas”. Adding that “Egypt is a core market for Arab Bank Group, where we have been operating since 1944”.
The Kom Ombo plant will contribute to the Egyptian government’s target to generate 42% of the country’s electricity from renewable energy sources by 2035. The target also involves the delivery of one of the lowest generation tariffs on the continent.
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