By Akanimo Sampson
Five multilateral financial institutions have endorsed a $114 million financing package with ACWA Power for the construction of the largest private solar plant in Egypt, the Kom Ombo Solar power plant.The institutions are, European Bank for Reconstruction and Development (EBRD), OPEC Fund for International Development (tOPEC Fund), African Development Bank (AfDB), Green Climate Fund (GCF), and Arab Bank.
The deal 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).
This comes barely two weeks following the finalization of the virtual signing of a 25-year Power Purchase Agreement (PPA), Network Connection Contract, and Usufruct Agreement by ACWA Power with senior Egyptian government officials and representatives from the Egyptian Electricity Transmission Company (EETC), and the New and Renewable Energy Authority (NREA).
Expectation for the project
The development of the Kom Ombo solar plant will add 200 MW of energy capacity, increasing the share of renewable energy in the North African country’s energy mix and further promoting private-sector participation in the Egyptian power sector.
The new power plant will 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 approximately 130,000 households and contribute to the Egyptian government’s target to generate 42 percent of the country’s electricity from renewable energy sources by 2035.
According to Dr. Mohamed Shaker El Markabi, Egypt’s Minister of Electricity and Renewable Energy, the North African country is home to a wide range of untapped renewable resources particularly, wind and solar energy that can generate up to nearly 90 GW.
ACWA Power is however a leading Saudi developer, investor, and operator of power generation and desalinated water plants. It says the construction of the Kom Ombo Solar power plant will officially begin in the third quarter of this year.It made the announcement after the finalisation of the virtual signing of a 25-year Power Purchase Agreement (PPA), Network Connection Contract, and Usufruct Agreement with senior Egyptian government officials and representatives from the Egyptian Electricity Transmission Company (EETC), the New and Renewable Energy Authority (NREA), and ACWA Power.According to ACWA, the financial closure of the project is scheduled for the third quarter of 2021, following the obtainment of a US$ 40M senior debt financing and a $14 million equity bridge loan from EBRD, in addition to a $27.2 million loan from AfDB to finance the construction, development, and design of the 200 MW solar PV project.
