Saudi Arabia-based power plant developer ACWA Power has secured a $114 million funding package from four agencies for the 200 megawatts (MW) Kom Ombo solar project in Egypt.
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 to build Egypt’s largest private solar plant.
ACWA Power had signed a power purchase agreement with the government of Egypt in 2019 to finance, develop, construct, and operate the 200 MW Kom Ombo solar project. ACWA Power had secured this project after a tender was issued in 2018.
The construction of the Kom Ombo solar plant would increase the share of renewable energy in Egypt’s energy mix while also encouraging private sector participation in the country’s power sector.
The EBRD is expected to contribute up to $36 million in loans, with the OPEC fund introducing $18 million, and the AfDB offering $17.8 million towards the project. The GCF will provide $23.8 million, while $18 million come from Arab Bank.
This is in addition to EBRD equity bridge loans of up to $14 million and $33.5 million from Arab Petroleum Investments Corporation (APICORP).
The Kom Ombo plant will be less than 20 kilometers from Africa’s largest solar park, the 1.8-gigawatts Benban complex. The new utility-scale plant will serve 130,000 households once it is operational.
In Egypt’s first solar photovoltaic (PV) tender, ACWA Power submitted the lowest tariff. The public tendering process aimed to achieve a competitive tariff and encourage solar energy as a viable alternative to traditional energy sources.
Private-sector participation in the Kom Ombo project came about after a policy consultation 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 benefited from the AfDB’s recent support for wider energy-sector reforms aimed at increasing private-sector participation.
“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.”
In 2020, Saudi’s sovereign wealth fund Public Investment Fund (PIF) said that it had increased its ownership stake in ACWA Power from 33.36 percent to 50 percent.
“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,” Mr. Padmanathan concluded.