- Asian Infrastructure Investment Bank (AIIB) to lend up to $210 million in financing for 11 greenfield solar power plants in Egypt
- All the projects are located in Benban Solar Park and represent an aggregate capacity of 490 MW
- It will be co-financed by AIIB and the International Finance Corporation (IFC)
- AfDB has also extended it support in the form of a senior loan amounting to $55 million for three solar power projects of 150 MW capacity
- Three companies will be beneficiaries of this AfDB loan - Alcazar Energy Egypt Solar I, Delta for Renewable Energy and Shapoorji Pallonji Energy Egypt
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Two international financing agencies have come forward to support solar power project development in Egypt. Asian Infrastructure Investment Bank (AIIB) has announced up to $210 million in financing for 11 greenfield solar power plants representing an aggregate capacity of 490 MW. The other international agency is the African Development Bank (AfDB), which has approved $55 million loan for three solar PV projects in Egypt with a cumulative capacity of 150 MW. All projects are located in Benban Solar Park.
A syndicate of lenders including AIIB will provide long-term debt financing on a limited recourse project finance basis for 490 MW. It will be co-financed by AIIB and the International Finance Corporation (IFC). More investors from the private sector and bilateral financial institutions are also interested in participating in the project, said AIIB.
Alcazar Energy Egypt Solar I (Alcazar I) Delta for Renewable Energy (Delta) will each get a loan of $18 million, while another independent power producer Shapoorji Pallonji Energy Egypt (SP) (SPEE) will get $19 million. The amount approved for SPEE includes $7 million concessional financing from the Global Environment Fund (GEF). All these loans from AfDB will have a tenor of 18 years.
While Alcazar Energy Partners is developing two projects of 50 MW each, Shapoorji Pallonji is working on the remaining 50 MW, all located in Benban region of Aswan. All three projects will share the common grid connection funded jointly with other developers under a cost sharing agreement with the Egyptian Electricity Transmission Company (EETC).
“The three projects will increase Egypt’s power generation capacity, diversify its energy mix, enable significant fuel savings and reduce carbon emissions to the tune of 4.8 million metric tons over the PPA’s 25-year term. Moreover, the generation capacity of the three new solar plants will be enough to serve about 100,000 households,” said Amndou Hott, vice president for Power, Energy, Climate Change and Green Growth Complex (PEVP). PEVP is a creation of AfDB that will help Africa increase its on-grid generation to add 160 GW of new capacity by 2025 among others objectives.
All projects were awarded in the second round of Egypt’s FiT program. In the second round, a total of 4,300 MW of renewable energy capacity is included, with solar’s share at 2,300 MW. The country is aiming at reaching 20% of its electricity generation coming from renewable sources by 2022.
Benban Solar Park once complete was originally envisioned to be a 1.8 GW strong solar park. After hiccups in the first FIT round, the second round has recently attracted huge international investment. European Bank of Reconstruction and Development (EBRD) has committed to invest in 750 MW capacity through 16 solar power projects (see EBRD Support For 750 MW PV In Egypt). Recently, two PV plants of 50 MW capacity each here secured financing worth $116 million from the EBRD and France’s Proparco (see $116 Million For 100 MW PV In Egypt).