File Photo: A man walks past an entrance to the International Finance Corporation, a unit of the World Bank Group, in Washington. AP
The financing package will support UAE-based AMEA Power to build, own, and operate twin solar and wind plants in Egypt, delivering more than 1 gigawatt of renewable energy at the lowest price in Africa.
The new finance is expected to benefit 1 million Egyptians who will secure access to clean energy.
The investment includes loans from the IFC of up to $145 million to the Abydos Solar Company and the Amunet Wind Power Company, subsidiaries of AMEA Power. As the hedging organisation for both projects, the IFC is also removing most of the risk of rising interest rates by swapping the variable interest rate for a fixed rate for the term of loans for the combined packages.
When built, the 560MW Abydos Solar PV and 505MW Amunet Wind independent power projects, which will be Egypt’s largest of their kind, will generate over 4,000 gigawatt-hours per year of power. Power from the solar park and the wind farm will be priced at 2 US cents/kilowatt hour and 3 US cents/kilowatt hour, respectively, which are the lowest rates in Africa and among the least expensive rates globally.
Abydos and Amunet will reduce Egypt’s carbon footprint by 1.7 million tons of greenhouse gases annually.
“These projects highlight the private sector’s essential role in helping to deliver clean, affordable power, especially at a time of growing challenges from climate change and pressures on the environment,” said Cheick-Oumar Sylla, IFC Regional Director for North Africa and the Horn of Africa.
The IFC mobilised up to $160 million in long-term loans from the Japan International Cooperation Agency and the Dutch Entrepreneurial Development Bank (FMO) to support the solar project. For the wind project, the IFC mobilised over $500 million from the Japanese Bank for International Cooperation and from three commercial banks—Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, and Standard Chartered Bank—under insurance cover from Nippon Export Investment Insurance and a working capital facility from the Commercial International Bank of Egypt.
The Abydos project will be situated near Kom Ombo in Egypt’s Aswan governorate, while the Amunet project will be built in Egypt’s wind-rich Gulf of Suez region. Construction of both projects is scheduled to begin in December 2022, with the solar plant expected to be complete in 18 months and the wind farm in 30 months.
Egypt’s Minister of International Cooperation Rania Al-Mashat said that the agreements “signal our commitment to the green transition, while also showcasing the depth of climate finance opportunities in Egypt and the crucial role of private sector engagement in accelerating the climate agenda on a national level.”
“Moreover, both projects reflect the interlinkages and complementarity between climate action and development efforts and highlight the importance of mobilising innovative financing modalities that offer an opportunity for the international community to support the climate agenda.”