European Bank for Reconstruction and Development and Partners Provide US$479.1 Million for Obelisk Solar Power Project

The European Bank for Reconstruction and Development (EBRD), African Development Bank (AfDB), and British International Investment (BII) have provided a total of US$479.1 million to support the development of a 1.1 GW solar photovoltaic (PV) power plant integrated with a 200 MWh battery energy storage system (BESS) in Egypt's Nagaa Hammadi region. The project will enable the generation of approximately 3,000 GWh per year of additional renewable power, enhance grid stability, and manage peak demand. The energy will be sold under a 25-year power purchase agreement with the Egyptian Electricity Transmission Company, backed by a sovereign guarantee. This financing package will contribute to Egypt's goal of reaching 42 per cent of renewables in its power mix by 2030 and reduce carbon dioxide emissions by up to 1.4 million metric tonnes annually.

Key Takeaways:

• The Obelisk Solar Power project is a 1.1 GW solar PV power plant integrated with a 200 MWh BESS in Egypt's Nagaa Hammadi region, developed by Scatec, a leading renewable energy solutions provider, in collaboration with the EBRD, AfDB, and BII.
• The project's total estimated capital expenditure is US$590 million, with the financing package covering approximately 80 per cent of this total, valued at US$479.1 million.
• The project's blended financing includes a US$173.5 million loan from the EBRD, a US$184.1 million financing package from AfDB, and a US$100 million concessional loan and a US$15 million returnable grant from BII.
• The project will generate approximately 3,000 GWh per year of additional renewable power, enhance grid stability, reduce peak demand, and save up to 1.4 million metric tons of carbon dioxide emissions annually.
• The energy will be sold under a 25-year power purchase agreement with the Egyptian Electricity Transmission Company, backed by a sovereign guarantee.
• Egypt aims to reach 42 per cent of renewables in its power mix by 2030, and this project is expected to be a significant milestone in the country's energy transition.
• The project demonstrates 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.

Statistics:

• The total estimated capital expenditure for the project is US$590 million.
• The financing package covers approximately 80 per cent of this total, valued at US$479.1 million.
• The EBRD's loan is valued at US$173.5 million, with US$101.9 million benefiting from a European Fund for Sustainable Development (EFSD+) first-loss cover guarantee for the first 18 years.
• The AfDB's financing package is valued at US$184.1 million, including US$125.5 million of ordinary resources, US$20 million from the Sustainable Energy Fund for Africa, and US$18.6 million from the Canada-African Development Bank Climate Fund.
• BII's financing package is valued at US$115 million, including a US$100 million concessional loan and a US$15 million returnable grant.
• The project is expected to generate approximately 3,000 GWh per year of additional renewable power.
• The project will reduce carbon dioxide emissions by up to 1.4 million metric tons annually.

Sources:

• Press Release: European Bank for Reconstruction and Development; African Development Bank; British International Investment (2023)
• Quote: Harry Boyd-Carpenter, EBRD Managing Director for Sustainable Infrastructure
• Quote: Wale Shonibare, the AfDB's Director of Energy Financial Solutions, Policy and Regulations
• Quote: Iain Macaulay, Director and Head of Project Finance (Africa and Pakistan) for BII
• Quote: Terje Pilskog, CEO of Scatec
• Quote: Stefano Sannino, Director-General of the Directorate-General for the Middle East, North Africa and the Gulf at the European Commission
• Quote: Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation