Egyptian government signs power purchase agreement with Scatec Solar
The Government of Egypt recently signed a 25-year power purchase agreement with Scatec Solar and partners for 400 megawatts of solar energy from six projects to be located in the Ben Ban area near Aswan in Upper Egypt.
The signing ceremony took place in Cairo on April 13 in the presence of Egyptian Minister of Electricity and Renewable Energy Mohamed Shaker El-Markabi and the Ambassador of Norway Sten Arne Rosnes.
The solar projects are expected to generate approximately 870 gigawatt hours (GWh) of solar electricity each year. The solar plants are part of the two-gigawatt (GW) solar FiT initiative started by the Egyptian Government in 2015.
“With this programme the Government of Egypt is making important steps towards accessing clean and low cost electricity to drive development and economic prosperity,” Raymond Carlsen, CEO of Scatec Solar, said. “Scatec Solar and partners are making significant investments and long term commitment to Egypt”
Total investments for the projects are estimated at USD 400 million and are expected to create annual revenue of approximately USD 60 million over the 25-year period of the agreement. Scatec Solar will construct, own and operate all six plants. The company’s share of equity investments will be approximately USD 50 to 70 million.
For equity investments, Scatec solar is partnering with local developers and KLP Norfund Investments and may add additional partners to an equity consortium before financial close. European Bank for Reconstruction and Development is leading a consortium of banks that is expected to support the projects with a total debt of up to USD 350 million.
