In an effort to boost Egypt’s renewable capacity, the European Bank for Reconstruction and Development, the Green Climate Fund (GCF) and the Dutch Development Bank (FMO) will provide a $87 million syndicated loan to Infinity Solar Energy SAE, an Egyptian renewable energy developer, and to ib vogt GmbH, an international solar developer established in Germany, the EBRD said.
The funds will be used to construct and operate two solar photovoltaic power plants with a total capacity of 80 MW located at the Benban complex in Upper Egypt, which on completion will be the largest solar installation in the world, with a planned total capacity of 1.8 GW, the Bank said on October 23.
Each development will be funded through loans of $87 million under an A/B structure, comprising EBRD A Loans of $58 million, of which $44 million will be from the Bank’s own account and $14 million from the Green Climate Fund. FMO will provide B Loans of $29 million. The development consortium was supported by Synergy Consulting and Solizer, which acted as transaction advisors for the two projects.
The investment is part of the EBRD’s $500 million EBRD framework for renewable energy in Egypt, adopted by the Bank’s Board of Directors earlier this year. The framework aims to develop Egypt’s potential in renewables and strengthen private sector involvement in the power and energy sector.
Support for the framework has been provided by the Southern and Eastern Mediterranean (SEMED) Energy Efficiency Policy Dialogue Framework, funded by the European Union’s Neighbourhood Investment Facility, and the SEMED Multi-Donor Account.
“We are delighted to welcome Infinity and ib vogt as new partners in this important project, which will significantly change the way that Egypt generates energy,” EBRD Power and Energy Utilities head Harry Boyd-Carpenter said.
“The expansion of renewables is crucial not only for the environment, but also for the wider economy. It will create jobs, increase energy security and reduce the burden on the economy. The introduction of a regulatory framework that private investors can rely on will ensure that all this happens at sustainable cost and affordable prices,” he added.
Ayaan Adam, Private Sector Facility Director for the Green Climate Fund, reminded that “this first investment with the EBRD under our Egypt Renewable Energy Financing Framework project is a big step forward. It shows the potential for public and private climate finance to drive the transition to low-emission energy in support of Egypt’s climate goals”.
For his part, Infinity Solar CEO Mohamed Mansour hailed the collaboration with the EBRD and its partners GCF and FMO on these two projects under the Egyptian feed-in tariff programme. “We see this cooperation as a big step in achieving our capacity goals for the Egyptian market, and hope to see many more projects in the near future,” he said.
Anton Milner, Managing Director of ib vogt noted that the successful application of public and private climate financing is key in driving the deployment of sustainable, low-emission energy technologies both for Egypt and on a global scale. “Our companies are expanding rapidly and we welcome the initial cooperation for our next round of Egyptian projects – where we are already constructing the country’s first utility-scale solar facility – and also for the future.”