The World Bank's Multilateral Investment Guarantee Agency (MIGA) announced that it will provide Egypt with $102.6 million in credit facilities to support the construction, operation and maintenance of six solar plants in the country, the agency said in a press release.
The agency is set to provide guarantees against expropriation and restrictions on currency transfers, failure to exchange currency, contract disruption, war and civil unrest.
The funding will be used to cover $5 million over 15 years in investments in the solar project by developer IB Vogt, as well as additional coverage worth $97.6 million for 20 years to the leader of the project, the Industrial and Commercial Bank of China.
The six solar plants are set to be built with investments worth $385.8 million, and are expected to provide energy for 349,912 housing units, according to the agency.
The MIGA will provide coverage to the Industrial and Commercial Bank of China, with Saudi power developer Acwa Power to manage construction of three plants.
Keiko Honda, the executive vice president and chief executive officer of MIGA, affirmed the need for further bolstering investment in Egypt to fulfil the increasing demand for electricity and diversifying its resources in the country.
Egypt is aiming to increase its use of renewable energy to 22 percent by 2020, the country’s investment and international cooperation minister Sahar Nasr said in April.
The country has been aiming to upgrade its power plant capacity and renewable energy projects in order to meet rising power demand.
Last October, Egypt signed agreements for the construction of 13 solar power plants in Aswan, financed by the International Financial Corporation (IFC), which is a member of the World Bank Group.
The 13 solar power plants, which are expected to generate 590 megawatts, will cost $823 million in total, with the IFC providing $653 million. The IFC will provide its funding package in cooperation with around nine international banks.
Egypt's new solar deal represents the largest private-sector financing package for a solar photovoltaic facility in the Middle East and North Africa.
The solar plants will be linked to 19 other plants to make up the Benban Solar Park in Aswan.
The World Bank has been working with the Egyptian government to help reform the electricity sector.
Last week, Siemens Gamesa secured a contract to construct a 262MW wind turbine in Egypt's Gulf of Suez in the company's largest deal in the country to date, the company said on Wednesday.
In 2015, German conglomerate Siemens signed a €8 billion ($9 billion) deal with the Egyptian government to build three combined-cycle power plants and 12 wind power installations at a capacity of 16.4 gigawatts.