The EBRD said that such an action will promote the expansion of renewable energy in Egypt.
The new funding comprises a $4.95 million loan from the EBRD and a $550,000 concessional loan from the Global Environment Facility (GEF) to finance the construction and operation of a seven Mwp (megawatt peak) solar photovoltaic (PV) project in Minya governorate.
The project will sell all of its electrical output to ASCOM Carbonate and Chemical Manufacturing (ACCM) under a 25-year power purchase agreement.
The bank said that this tranche follows an initial $4.2 million loan extended in December 2020 to finance the construction and operation of a six MWp solar PV power plant at Dina Farms in the Beheira governorate. This plant was the first private-to-private renewable energy project financed by the EBRD in Egypt, it said, adding that the powerplant enables Dina Farms, the largest dairy farm in Africa, to use clean energy for some of its energy consumption.
“These investments contribute to the ongoing energy transition in Egypt, host of the COP27 global climate summit, by supporting the growth of renewable energy. The Egyptian government aims to raise the national share of electricity generation capacity from renewables from 20 percent in 2022 to 42 percent by 2035. The government has pursued energy diversification and liberalisation by facilitating a market for private renewable energy development in recent years. The expansion of the private-to-private segment is an important milestone in the gradual liberalisation of the Egyptian electricity sector,” said the EBRD.
Managing Director of the EBRD’s Sustainable Infrastructure Group Nandita Parshad stated that such a partnership expansion with TAQA Arabia aims to scale up private renewable energy capacity in Egypt, adding that support for the growing private-to-private segment of renewable energy is critical to accelerate the decarbonisation of the economy and foster green supply chains in Egypt and across the African continent.
Pakinam Kafafi, CEO of TAQA Arabia, said that the new plant will contribute to ACCM’s efforts to maximise the use of renewable energy resources, reducing its total annual electric power consumption by 16 percent.
“It gives us great pride to extend our partnership with the EBRD, a development finance institution that focuses on promoting private-to-private, green, sustainable energy projects aimed at developing society and providing a better quality of life,” Kafafi added.
TAQA PV for Solar Energy is a project company incorporated in Egypt for the purposes of developing the private-to-private renewable energy business of TAQA Arabia SAE, an Egyptian joint stock company.
This project falls under the EBRD’s Southern and Eastern Mediterranean Private Renewable Energy Framework (SPREF), which supports the development and financing of innovative business models and the mobilisation of private finance for renewable energy projects in the southern and eastern Mediterranean.
The framework is supported by the Global Environment Facility and the Clean Technology Fund. SPREF also comes under the umbrella of the Regional Dialogue Platform on Renewable Energy and Energy Efficiency, created by the Union for the Mediterranean to promote the deployment of renewable energy and energy efficiency measures in energy generation, transmission, distribution and end use.
To date, the EBRD has invested more than €10.3 billion in 154 projects in Egypt across the financial, agribusiness, manufacturing and services sectors, as well as infrastructure projects in areas including power, municipal water and wastewater services and transport sectors.