Egypt's PM witnesses signing of $680M financial closing agreement to establish wind farm in Gulf of Suez

CAIRO - 5 April 2023: The Egyptian Cabinet  announced, Wednesday, that the Red Sea Wind Energy Consortium signed a financial closing agreement worth $680 million for a project to establish a wind farm in the Gulf of Suez with a capacity of 500 megawatts.

 

The cabinet added in a statement that the agreement was signed by representatives of the Red Sea Wind Energy Company and financing entities, the Japan Cooperation Bank and the European Bank for Reconstruction and Development (EBRD).

 

The Egyptian Minister of Electricity and Renewable Energy, Mohamed Shaker, said that this project is one of the largest wind energy projects in Egypt and Africa.

 

 

The minister explained that the role of the Red Sea Wind Energy Company is to operate and maintain the wind farm under a 25-year power purchase agreement (PPA), which it signed with the Egyptian Electricity Transmission Company.

 

"The station is scheduled to be connected to the national grid in two phases, with full commercial operation planned during the third quarter of 2025,” he added.

 

He pointed out that the Ministry of Electricity and Renewable Energy has taken many measures and launched a number of mechanisms to encourage and stimulate investment in the field of electricity generation from renewable energy through the private sector, to maximize the use of renewable energy sources and the exploitation of those natural resources.

 

"As a result of these measures, the private sector has gained great confidence in the electricity and renewable energy sector, as a large number of investors from the foreign and local private sectors applied to establish new projects, and among these investments is the wind farm project in the Ras Ghareb area in the Gulf of Suez - subject Today's agreement,” the minister noted.

 

He said that renewable energy projects enhance Egypt's chances of exporting electricity to Europe, Asia and Africa by expanding electrical interconnection projects with neighboring countries.

 

Ownership Structure

 

For his part, Chairman of the Board of Directors of the Red Sea Wind Energy Company, Khaled El-Degwi, said that the company will build, own and operate the wind farm.

 

He explained that the company's ownership structure is distributed among a consortium of companies, which includes: ENGIE with a 35 percent stake, Orascom Construction, which holds 25 percent, Toyota Tsusho Corporation with 20 percent, and Eurus Energy Holdings Corporation with 20 percent.

 

El-Degwi stated that Orascom Construction will carry out the civil and electrical works for the wind farm.

 

He pointed out that the consortium relies in its development of this project on the previous success it achieved in developing the first independent renewable energy producer (IPP) project in Egypt of its type and size, which was completed in October 2019 ahead of schedule.

 

"This will be the third private wind farm in Egypt, and it is expected to be the largest in Africa, and this farm will help reduce carbon dioxide emissions by about one million tons annually," he stated.