Saudi Arabian developer ACWA Power has finalised agreements for the 200MW Kom Ombo solar plant in Egypt, with construction work set to begin later this year.
A 25-year power purchase agreement and network connection contract were signed at a virtual ceremony by ACWA representatives and Egyptian government officials.
The progress comes a month after the African Development Bank approved a US$27.2 million loan to finance the construction, development and design of the project, with financial closing scheduled for the third quarter of 2021.
Finalising the project agreements for Kom Ombo marks a “significant milestone” towards fulfilment of the plant, said Rajit Nanda, acting chief investment officer of ACWA Power.
“The tariff is the lowest in the African continent for a project that is soon to achieve financial close and commence construction, which demonstrates that globally competitive tariffs are possible in North Africa and the wider African region,” he added.
In addition to Kom Ombo, ACWA’s presence in Egypt’s energy market saw the company develop three projects totalling 120MW at the Benban solar complex. It is also involved in the development of a 2.3GW natural gas facility that is due to be fully operational in 2023.
While Egypt is aiming to produce 42% of its electricity from renewables by 2035, studies are underway to increase this percentage, said the country’s Minister of Electricity and Renewable Energy, Mohamed Shaker El-Markabi.
“Egypt is home to a wide range of untapped renewable resources, particularly wind and solar energy,” he added. “The electrical capacities that can be generated from renewable sources can reach up to nearly 90GW.”