Egyptian International Cooperation Minister Rania Al-Mashat and President of the EBRD Odile Renaud-Basso after signing the agreement on Wednesday April 21, 2021.
A group of banks and funds inked on Thursday a $114 million package with ACWA Power to finance the construction of the largest private-sector solar plant in Kom Ombo, Egypt.
The deal was signed by the European Bank for Reconstruction and Development (EBRD), the OPEC Fund for International Development, the African Development Bank (AfDB), the Green Climate Fund (GCF), and the Arab Bank.
The signing ceremony was held on the sidelines of President of EBRD Odile Renaud-Basso's visit to Egypt that concludes on Thursday.
The development of the Kom Ombo solar plant will add 200 MW of energy capacity, increasing the share of renewable energy in Egypt’s energy mix and further promoting private-sector participation in the Egyptian power sector.
The package includes loans of up to $36 million from the EBRD, $18 million from the OPEC Fund, $17.8 million from the AfDB, $23.8 million from the GCF and $18 million from the Arab Bank. This is in addition to equity bridge loans of up to $14 million from the EBRD and $33.5 million from the Arab Petroleum Investments Corporation (APICORP).
The Kom Ombo plant will be constructed less than 20km from Africa’s biggest solar park, the 1.8 GW Benban complex. Once operational, the new utility-scale plant will serve 130,000 households.
ACWA Power sumitted the lowest tariff in what was the first solar photovoltaic (PV) tender in Egypt, according to the EBRD.
The provision of solar energy through a public tendering process aims to achieve a competitive tariff and promote the growth of solar energy as an affordable alternative to conventional energy sources.
The EBRD stated that the private-sector participation in the Kom Ombo project is the result of successful policy dialogue with Egypt’s Ministry of Electricity and Renewable Energy and the Egyptian Electricity Transmission Company (EETC).
The EETC is supported by a $3.6 million technical assistance programme, co-funded by the EBRD and the GCF, to administer competitive renewable energy tenders.
The project has benefited from broader energy-sector reforms supported by the AfDB in recent years to scale up the involvement of the private sector, according to the EBRD.
“We are very happy to team up again with ACWA Power in Egypt, after our successful partnership in Benban, to promote renewable energy in Egypt. Increasing the production of clean energy is an important step to reducing carbon emissions and addressing climate change. This is in line with the EBRD’s strategy to become a majority green bank by 2025. This project also marks the EBRD’s first co-financing project with the AfDB and the OPEC Fund in Egypt and we look forward to future joint investment opportunities for our institutions across Africa,” said Renaud-Basso.
OPEC Fund Director-General Abdul-Hamid Al-Khalifa said that "the fund is pleased to contribute to Egypt’s efforts and strategy to expand its generation capacity in the renewable energy space.
“We have been at the forefront of advocating for access to affordable clean energy for many years. Kom Ombo will be our third project with ACWA Power and it exemplifies great cooperation between government, development finance and private-sector actors,” he added.
"The Kom Ombo solar project is a truly remarkable transaction. It not only clearly demonstrates the indisputable competitiveness of solar PV vis-à-vis conventional sources of generation, but it also contributes directly to the realisation of Egypt's ambitious renewable energy targets, in addition to being an excellent example of what stakeholders driven by a shared objective can achieve,” said AfDB Vice President of Power, Energy, Climate Change and Green Growth Kevin Kariuki.
“ACWA Power is privileged and proud to lead the realisation of the Kom Ombo PV project. The financing package signed today brings us closer to not only the people and the government of Egypt, but also to our finance partners, the EBRD, AfDB, the OPEC Fund, the GCF and Arab Bank, reflecting our shared objective of supporting the energy transition to address the threat of climate change. Kom Ombo PV is the fourth project in ACWA Power’s Egyptian portfolio and the conclusion of this financing demonstrates the confidence in the Egyptian government’s ambitious renewable energy plans, being implemented through private-sector participation”, stated Paddy Padmanathan, president of ACWA Power.
The Kom Ombo plant will contribute to the Egyptian government’s target to generate 42 percent of the country’s electricity from renewable energy sources by 2035 while delivering one of the lowest generation tariffs in Africa.