The European Bank for Reconstruction and Development (EBRD), the Green Climate Fund (GCF), and the Netherlands Development Finance Company (FMO) have together agreed to provide an $87 million syndicated loan to Infinity Solar Energy SAE, an Egyptian renewable energy developer, and ib vogt GmbH, an international solar developer established in Germany, to develop 80 MW of solar in the planned Benban Solar Park in Egypt.
The funds will be used to construct and operate two, solar PV projects with a total capacity of 80 MW at the Benban complex in Upper Egypt, which upon completion will be the largest solar installation in Africa, with a total planned capacity of 1.8 GW, according to an EBRD release.
Each development will be funded through loans of $87 million under an A/B structure, comprising A Loans of $58 million from EBRD, of which $44 million will be from EBRD’s own account and $14 million will come from the Green Climate Fund. Meanwhile, FMO will provide B Loans of $29 million. The development consortium was supported by Synergy Consulting and Solizer, which acted as transaction advisors for the two projects.
The investment is a part of EBRD’s $500 million frameworks for renewable energy in Egypt that was adopted by the bank’s board of directors earlier this year. The framework aims to develop Egypt’s potential in renewables and strengthen private sector involvement in the power and energy sector.
Support for the framework has been provided by the Southern and Eastern Mediterranean (SEMED) Energy Efficiency Policy Dialogue Framework, which was funded by the European Union’s Neighbourhood Investment Facility and the SEMED Multi-Donor Account.
“We are delighted to welcome Infinity and ib vogt as new partners in this important project, which will significantly change the way that Egypt generates energy. The expansion of renewables is crucial not only for the environment, but also for the wider economy. It will create jobs, increase energy security and reduce the burden on the economy. The introduction of a regulatory framework that private investors can rely on will ensure that all of this happens at a sustainable cost and affordable prices,” said Harry Boyd-Carpenter, head of power and energy utilities for EBRD.
Ayaan Adam, private sector facility director for the Green Climate Fund, commented, “This first investment with EBRD under our Egypt Renewable Energy Financing Framework project is a big step forward. It shows the potential for public and private climate finance to drive the transition to low-emission energy in support of Egypt’s climate goals.”
“We are delighted to collaborate with EBRD and its partners GCF and FMO on these two projects under the Egyptian Feed-in Tariff program. We see this cooperation as a big step in achieving our capacity goals for the Egyptian market, and hope to see many more projects in the near future,” said Mohamed Mansour, chief executive officer of Infinity Solar.
Mercom previously reported that EBRD and Proparco, a French financial institution, had agreed to finance the installation of two, 50 MW solar projects set to be developed in the Benban Solar Complex in the Aswan province of Egypt. EBRD and Proparco will each provided $58 million ($116 million in total) for the construction and operation of the projects.
Image credit: EBRD
Wendy is a co-founder of Mercom Capital Group, the parent company of Mercom India. Wendy is a contributing editor at MercomIndia.com and is responsible for content quality across the company and products. She has over 15 years of business and finance experience in the energy and technology markets. In addition to Mercom, Wendy has written for many other clean energy-focused blogs and publications. More articles from Wendy Prabhu.