International donors finance Egypt’s solar power gig with $1.8B

CAIRO – 18 October 2017: The World Bank and the European Bank for Reconstruction and Development (EBRD) have directed a total of $1.8 billion for Egypt’s solar energy parks, currently under construction, Bloomberg reported Wednesday.

“Egypt has been able to attract all of these different investors and should comfortably get more than a gigawatt of capacity financed this year,” Harry Boyd-Carpenter, head of power and energy utilities at the EBRD, told the U.S. news service.

These funds are pledged for the feed-in-tariff (FiT) scheme which was announced by the government in September 2014. The scheme will involve private sector companies to build solar plants in Aswan, Minya and Hurghada.

“Local Egyptian banks have problems financing these projects because the tariff is paid in Egyptian pounds but the debt is raised in dollars so that creates issues for that,” Boyd-Carpenter said.

The plan set by Minister of Electricity Mohamed Shaker eyes generating 20 percent of Egypt’s energy supply from renewable energy resources by 2022.

Divided over two rounds, the first round of the scheme witnessed three developers pursuing their projects at Benban city in Aswan. Saudi Arabian group Fawaz Alhokair’s FAS Energy, ELF and Infinity Solar have already started construction works at the site.
The International Finance Corporation (IFC) approved $660 million in funding to 13 FiT projects in Benban, near Aswan. These projects are worth a total of $730 million and have a total capacity of 500MW.

The EBRD is also expected to finance a total of 16 solar projects in Egypt at a total capacity of 750MW. They pledged $500 million in funding framework for the FiT project.

In August, the EBRD signed an agreement with France-based Proparco worth $116 million. The plan is to finance the construction of two 50MW solar plants in the Benban solar complex in Aswan.