Egypt’s Kom Ombo solar project gets $123 million financing package

Written by
1 May 2023
Egypt’s Kom Ombo solar project gets $123 million financing package

ACWA Power gets funding to build 200 MW plant near Benban, part of company’s $2 billion investment in Egypt including 1.1 GW wind project; 4 big wind projects from COP27 now moving forward

Riyadh-based ACWA Power announced last week it has signed a $123 million financing package to develop the 200 MW Kom Ombo utility-scale solar power plant in Egypt. It is expected to be commercially operational in January 2024.

The Kom Ombo plant will be located close to Africa’s biggest solar park, the 1.5 GW Benban complex.

Numerous institutions are financing the project, including the European Bank for Reconstruction and Development (EBRD), OPEC Fund for International Development,  African Development Bank (AfDB), AfDB’s Sustainable Energy Fund for Africa (SEFA), Green Climate Fund (GCF), Arab Petroleum Investments Corporation (APICORP) and Arab Bank.

“ACWA Power's successful acquisition of financing support for our renewable project is a significant milestone,” said Marco Arcelli, CEO of ACWA Power. “We're fully committed to fast-tracking the project's development while staying true to Egypt's renewable energy targets.”

While the financing documentation was originally signed in April 2021 with the EBRD, the OPEC Fund, GCF, AfDB, and Arab Bank, the dynamics in global supply chains due to Covid19 altered the dynamics for the development of solar plants, resulting in the extension of Kom Ombo’s project execution, according to a statement issued by ACWA Power.

The Kom Ombo plant will contribute to the Egyptian government’s target to generate 42 per cent of the country’s electricity from renewable energy sources by 2035 while delivering one of the lowest generation tariffs in Africa, according to ACWA Power.

Egyptian ambitions

Hassan Amin, Managing Director of ACWA Power Egypt, placed the Kom Ombo project in context of the company’s wide-ranging work in Egypt.

Speaking in March in a conference related to Public-Private Partnerships, he explained that ACWA Power started in Egypt in 2015 at the Benban project, where the company worked on three solar projects with total electricity production capacity of 120 megawatts.

He praised the coordination at the highest level among all partners in that project, led by the Ministry of Electricity and Renewable Energy. He pointed out that in addition to the Benban and Kom Ombo projects, the company has a wind power project under development in Egypt, which aims to be the largest in the Middle East with a production of 1,100 megawatts.

He pointed out that these projects represent the company's total investments in Egypt with a total value exceeding $2 billion.

Suez Wind Energy Project Company, ACWA Power's project company, is developing the 1.1 GW wind farm in the Gulf of Suez and Gabal al-Zayt areas, according to an earlier company statement.

“ACWA Power is one of the Saudi companies that has very big goals in the region, especially in Egypt, and they started signing with the Egyptian government during the COP 27 climate conference to establish projects of about 10 GW in several places including the Gulf of Suez, West Nile and other areas,” says Eng. Ahmed Khalil, Head of the Environment Unit at the Regional Center for Renewable Energy and Energy Efficiency (RCREEE).

Khalil makes the point that the agreements come within the framework of Egypt's ambitions to become a regional energy hub, which will require very large investment. The plans put forward by ACWA Power with the Egyptian government will be achieved over the course of 5 to 7 years to produce 10 GW, feeding the national electricity grid and producing green hydrogen.

Wind in the wake of Sharm El-Sheikh

“The Egyptian government signed memorandums of understanding for four major wind energy projects with the largest entities present in the Egyptian market on the sidelines of the Climate Summit COP 27 in Sharm El-Sheikh,” says Eng. Negm Abdel-Gawad Negm, Director of Projects Implementation at the New and Renewable Energy Authority.

“The memoranda of understanding include 10 GW for the Saudi company ACWA Power, 10 GW for Infinity - which is the largest renewable energy production company in Egypt - 5 GW for Orascom, and 3 GW for the Norwegian company Scatec, with a total of 28 GW,”

“The state has already begun to take actual decisions to allocate land for these projects in West Sohag and West Aswan,” he adds.

Abdel-Gawad Negm says that the required approvals from the ministries concerned with lands are currently being finalized, provided that each investor submits a thorough study of the region, requiring investors to generate electricity at the currently accepted price, which at 2.4 cents per kilowatt is acceptable to the government.

Energy & Utilities reported last fall that Acwa Power signed an MoU with Oman Investment Authority to explore possible OIA investment in the 1.1 GW Suez Wind Energy project. E&U also reported that Suez Canal Economic Zone entered into seven memoranda of understanding with companies and consortia to produce green hydrogen and ammonia in the zone.

Tahani Mohamad contributed reporting

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