EBRD, Proparco commit $116 million to finance Benban solar power plants
EBRD and Proparco sign first projects under Egypt Renewable Energy Framework.
The two institutions have committed US$ 58 million each for two 50 MW solar photovoltaic power plants.
Egypt has taken a major step forward in its use of renewable energy sources with the support of the European Bank for Reconstruction and Development (EBRD) and Proparco, a French financial institution that supports private sector development projects in emerging economies.
The two institutions have together provided US 116 million of financing for the construction and operation of two 50 MW solar photovoltaic power plants in Egypt. These are the first two projects to be financed under the second round of Egypt’s ambitious feed-in tariff scheme for renewable and will be part of the planned 1.8 GW Benban solar complex in Aswan province, in the southern area of Upper Egypt.
They are also the first projects under the EBRD’s new US$ 500 million framework for renewable energy in Egypt, which is expected to finance a total of 16 such projects delivering 750 MW of capacity and under Proparco’s dedicated envelope for solar projects in Egypt.
The new facilities will be constructed, operated and owned by two Egyptian subsidiaries of the French company EREN Renewable Energy and Access Power, the Dubai-based developer, owner and operator of sustainable power plants.
Janet Heckman, EBRD Managing Director of the Southern and Eastern and Mediterranean (SEMED) region, said: “We are very pleased to sign the first projects today, just two months after the EBRD Board of Directors approved our Egypt Renewable Energy Framework. These are truly groundbreaking projects, the first to reach this milestone in Egypt’s ambitious scheme to exploit its outstanding renewable resources.”
Harry-Boyd Carpenter, EBRD Director of Power and Energy utilities, said: “Projects such as these depend on partnership and this financing demonstrates this very clearly. We are privileged to be working with EREN and Access Power, who bring deep expertise and sustained commitment to renewable energy and Proparco, with whom we have a very strong partnership supporting renewable energy in Jordan, which we are proud to extend to Egypt. More broadly the success of this programme is due to the support of Dr Sahar Nasr, Minister of Investment and International Cooperation, Dr Mohamed Shaker, Minister of Electricity and Renewable Energy, the Egyptian Electricity Transmission Company, the New and Renewable Energy Authority and Egypt ERA, who have all worked so hard over the past three years to launch private renewable energy in Egypt.”
Alice Lucas, Senior Investment Officer for Proparco’s Energy and Infrastructure Division, said: “We are proud to have worked tirelessly over the past two years with the EBRD, EREN, Access Power and the Egyptian authorities to establish the first building blocks of the Benban solar complex. As the first two projects being fully financed in round two of the FiT programme, these are setting a path for other investments to follow.”
Gregory Clemente, Director General of Proparco, added: “These investments mark a new milestone for Proparco, already involved in the financing of the largest solar photovoltaic power plants in Central America and West Africa. They confirm the potential and strength of development finance institutions working together to overcome the challenges stemming from cutting-edge projects of this kind, which will bring long-lasting benefits to the people and economy of Egypt.”
More than 50 per cent of the population in the Aswan region live below the poverty line. The EBRD’s and Proparco’s solar projects in Benban will bring a significant short-term boost to the economy through the construction activities. They will also provide benefits through the transfer of skills and the creation of long-term jobs in the operation and maintenance of the power plants.
Between 2007 and 2016 the EBRD invested more than €3.5 billion directly in renewable energy, supporting 104 projects in 23 countries, and funding more than 5.3 GW of capacity
Egypt is a founding member of the EBRD and has been receiving funding since 2012. To date the Bank has invested €2.6 billion in 49 projects in the country. The EBRD’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services and support for transport services. The Bank has also provided technical assistance support to more than 500 small and medium-sized local enterprises.
Proparco pursues an ambitious climate strategy and has pledged to commit over 30% of its annual funding towards climate mitigation projects. In the last 10 years, Proparco has committed over €2 billion in financing dedicated to fighting climate change, including over €1 billion for renewable energy projects.
Proparco and its parent institution, Agence Française de Développement, have been consistently financing projects in Egypt: nearly €2 billion in financing has been granted since the first loan was made in 2006.