Saudi Arabia’s energy giant ACWA Power has received a $114 million financing package for the 200 MW Kom Ombo solar project in Egypt from four agencies.
The European Bank for Reconstruction and Development (EBRD), OPEC Fund for International Development (the OPEC Fund), African Development Bank (AfDB), Green Climate Fund (GCF), and Arab Bank signed the deal with ACWA Power for constructing the largest private solar project in Egypt.
In November 2019, ACWA Power had signed a power purchase agreement with the government of Egypt to finance, develop, construct, and operate the 200 MW Kom Ombo solar project. ACWA Power had secured this project through a tender issued in August 2018.
The development of the Kom Ombo solar plant will increase the share of renewable energy in Egypt’s energy mix and promote private-sector participation in the Egyptian power sector.
The package comprises loans of up to $36 million from the EBRD, $18 million from the OPEC Fund, $17.8 million from the AfDB, $23.8 million from the GCF, and $18 million from the Arab Bank. This is in addition to equity bridge loans of up to $14 million from EBRD and $33.5 million from Arab Petroleum Investments Corporation (APICORP).
The Kom Ombo plant is slated to be located less than 20 km from Africa’s biggest solar park, the 1.8 GW Benban complex. Once operational, the new utility-scale plant will serve 130,000 households.
ACWA Power submitted the lowest tariff in what was the first solar photovoltaic tender in Egypt. The public tendering process aimed 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 came about after a policy dialogue with the Ministry of Electricity and Renewable Energy and the Egyptian Electricity Transmission Company as well as a $3.6 million additional technical assistance program. 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.
Paddy Padmanathan, President, and Chief Executive Officer, ACWA Power, said, “ACWA Power is privileged and proud to lead the realization of the Kom Ombo PV project. The financing package signed today brings us closer to not only the people and the government of Egypt, but also to our finance partners, the EBRD, AfDB, the OPEC Fund, the GCF and Arab Bank, and APICORP, reflecting our shared objective of supporting the energy transition to address the threat of climate change. 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.”
In December 2020, the Public Investment Fund said that it had increased its ownership stake in ACWA Power from 33.36% to 50%.