One million Egyptians are set to gain access to clean energy at the lowest rates in Africa, from twin solar and wind power plants with a combined capacity of 1.07 GW, the International Finance Corporation said.
World Bank Group member IFC said it contributed USD 145 million within a USD 1.1 billion debt and equity package for Egypt’s biggest solar farm and wind power plant projects. It arranged the deal with partner banks from the United Arab Emirates, Japan and the Netherlands.
They approved the financing deal for UAE-based AMEA Power to build, own, and operate the 560 MW Abydos Solar facility and the Amunet Wind system with a capacity of 505 MW. The two power plants will deliver renewable energy at the lowest price in Africa, at USD 20 per MWh and USD 30 per MWh, respectively, according to the announcement.
Egypt’s two biggest renewable electricity plants to meet electricity needs of one million people
Abydos and Amunet will reduce Egypt’s annual carbon footprint by 1.7 million tons and meet the needs of one million Egyptians for electricity, IFC pointed out.
As the hedging organization, IFC said it removed most of the risk of interest rate growth by swapping the variable interest rate for a fixed rate for the term of loans for the combined packages. It revealed that it mobilized up to USD 160 million in long-term loans from the Japan Bank for International Cooperation and the Dutch Entrepreneurial Development Bank (FMO) to support the solar project.
For the wind project, IFC mobilized over USD 500 million from the Japan Bank for International Cooperation and from three commercial banks – Sumitomo Mitsui Banking Corp., Sumitomo Mitsui Trust Bank and Standard Chartered Bank – under insurance cover from Nippon Export and Investment Insurance and a working capital facility from the Commercial International Bank of Egypt.
Egypt aims for a share of renewables in power production of 42% by 2035.
Chinese companies to supply equipment for both projects
The Abydos solar power plant will be situated near Kom Ombo in Egypt’s Aswan governorate, while the Amunet site is in Egypt’s wind-rich Gulf of Suez region. The construction of both projects is scheduled to begin this month. The solar plant is expected to be finished in 18 months and the wind farm in 30 months, IFC added.
Sumitomo Corp. from Japan owns 40% of the Amunet wind power project. Recharge learned from AMEA Power that it picked China-based firms Envision Energy, to supply the turbines, and JA Solar, to equip the photovoltaic plant.
AMEA Power noted that it recently signed an agreement with the Government of Egypt on the development of a 1 GW plant for the production of green hydrogen, which would be used as feedstock to make 800,000 tons of green ammonia per year, for export.