ACWA Power has received $114 mln in international funding to build the 200MW solar plant at Kom Ombo, the biggest private solar energy park in Egypt.
The new Kom Ombo plant will be located less than 20 km from Africa’s biggest solar park, the 1.8 GW Benban complex and once operational, it will serve 130,000 households and increase the electricity production and use of renewable energy in Egypt.
The package comprises loans of up to $36 mln from the European Bank for Reconstruction and Development (EBRD), $18 mln from the OPEC Fund for International Development, $17.8 mln from the African Development Bank (AfDB), $23.8 mln from the Green Climate Fund (GCF) and $18 mln from Arab Bank.
This is in addition to equity bridge loans of up to $14 mln from EBRD and $33.5 mln from Arab Petroleum Investments Corporation (APICORP).
ACWA Power submitted the lowest tariff in what was the first solar photovoltaic (PV) tender in Egypt.
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.
Private-sector participation in the Kom Ombo project is the result of successful policy dialogue with the Ministry of Electricity and Renewable Energy and the Egyptian Electricity Transmission Company (EETC), as well as a $3.6 mln technical assistance programme, co-funded by the EBRD and the GCF, to support the EETC in administering competitive renewable energy tenders.
In addition, the project has also benefitted from broader energy-sector reforms supported by the AfDB in recent years to scale up the involvement of the private sector.
Reducing carbon emissions
“Increasing the production of clean energy is an important step to reducing carbon emissions and addressing climate change, after our successful partnership in Benban, to promote renewable energy in Egypt,” said EBRD President Odile Renaud Basso.
In his comments, Director-General Abdulhamid Alkhalifa said the OPEC Fund is contributing to Egypt’s efforts and strategy to expand its generation capacity in the renewable energy space.
“Kom Ombo will be our third project with ACWA Power and it exemplifies great cooperation between government, development finance and private-sector actors.”
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,” added Paddy Padmanathan, President and Chief Executive Officer of ACWA Power.
The Kom Ombo plant will contribute to the Egyptian government’s target to generate 42% of the country’s electricity from renewable energy sources by 2035, while delivering one of the lowest generation tariffs on the continent.