Norwegian independent power producer (IPP) Scatec and the European Bank for Reconstruction and Development (EBRD) have signed a share purchase agreement establishing a renewable energy investment platform for Egypt.
The platform will be established via a holding vehicle in which EBRD and Scatec invest, with Scatec as the lead sponsor, developer, engineering, procurement and construction (EPC) provider and asset manager for all the platform’s projects.
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Scatec will own 60% of the platform, with EBRD holding the remaining 40%. EBRD has committed up to US$221 million in total funds, of which approximately US$170 million will be provided as equity and the remaining as project-level guarantees.
“This equity investment marks an important step in strengthening Egypt’s energy security,” said Harry Boyd-Carpenter, managing director, sustainable infrastructure at EBRD. “This will help address one of the country’s most pressing development challenges while reducing reliance on imported fossil fuels.”
The platform is designed primarily to finance Scatec’s near-term renewable energy projects in Egypt. It will hold Scatec’s 40% equity in the Obelisk project, a 1.1GW solar PV facility with a co-located 100MW/200MWh battery energy storage system (BESS). The second phase of the Obelisk project was brought online in August this year. In May, the National Bank of Egypt bought a 20% equity stake in the project, joining with Norfund and EDF Power Solutions, which also acquired 20% stakes.
The joint Scatec and EBRD investment platform will own 51% of the 900MW Shadwan wind generation facility in Egypt and a 60% equity interest in two hybrid solar and BESS projects: the first phase of Egypt Aluminium (1.125GW solar PV, 200MWh storage), and the Energy Valley project (1.95GW solar PV, 3935MWh storage).
The organisations said that the platform “may also invest in additional opportunities across the broader MENA (Middle East and North Africa) region.”
Speaking on the Scatec and EBRD partnership, Scatec CEO Terje Pilskog said: “Egypt has become one of Scatec’s most important markets, and this platform reflects both the scale of what we are building there and the quality of the assets we have developed.”
The EBRD’s interests in Egypt also extend to a 1.2GW solar PV, 600MWh BESS in Minya, into which the EBRD announced plans to invest US$265 million earlier this week. The loan will go towards Nefer Menya for Renewable Energy, a special purpose vehicle (SPV) created by independent power producer (IPP) Infinity Power and Hassan Allam Utilities (HAU) Energy.
The EBRD has been investing in Egypt since 2012, committing more than €16 billion (US$17.9 billion) into 238 projects.
