In North Africa, Egypt has secured $500 million from the European Bank for Reconstruction and Development (EBRD), to help fast-track the country’s new solar power initiative, which aims to develop a total of 2,000MW to be distributed over 40 utility-scale projects.
The funds, which have been earmarked for 2016, will be used towards the development of several plants and will help the country achieve its goal of generating 20% of its total power generation from renewable resources.
Each project is set to have a 50MW generation capacity and is expected to stimulate private sector investment.
According to Climate Action, many of these clean power projects will be located on a planned 1.8GW site near Benban in Upper Egypt and once completed, will be the largest solar park in the world.
In addition to providing $500 million, the EBRD plans to mobilise up to $1.5 billion in debt and equity from other financiers for these ventures. The total project cost is estimated around $4 billion, Climate Action reported.
EBRD Country Director for Egypt, Philip ter Woort said: “Egypt currently relies to a large extent on traditional power generation fuelled by costly hydrocarbon imports, however the government has an ambitious strategy to obtain 20% of the country’s electricity from renewable sources by 2020.
“Egypt is well placed to do so as it has world-class solar resources and in some places, especially in the Gulf of Suez, great potential for wind power.”
The EBRD has established relationships with the Egyptian authorities to provide technical cooperation during the development of the legal and regulatory framework for clean power, including contractual agreements, the solar grid code and environmental and social due diligence.
EBRD Director for Power and Energy Nandita Parshad, said: “Successfully implementing the feed-in tariff programme will unlock Egypt’s potential by providing a regulatory framework that can attract private capital.
“This initial programme is significant in itself. But the really exciting element is that once the country has an established model for private investment in renewables, there will be huge potential for widespread, rapid deployment, thanks to Egypt’s fantastic resources and the falling cost of renewable generation.”
The secured $500 million follows the EBRD’s approved $250 million credit facility for clean power projects in Egypt, Morocco, Jordan and Tunisia. This brings the Bank’s total investment to $5 billion.
According to Climate Action, prior to the UN climate summit in Paris, the Bank “adopted a target to increase its sustainable energy and resource financing to 40% of its annual volume by 2020”.