When completed, the 560MW Abydos Solar PV and 505MW Amunet Wind independent power projects, which will be the largest of their kind in Egypt, would produce more than 4,000 gigawatt-hours of electricity annually. Power from the solar park and wind farm will be priced at 2 US cents/kilowatt hour and 3 US cents/kilowatt hour, respectively, which are the lowest prices in Africa and among the least costly rates worldwide.
Abydos and Amunet will yearly reduce Egypt’s carbon footprint by 1,7 million metric tonnes of greenhouse emissions.
Cheick-Oumar Sylla, IFC Regional Director for North Africa and Horn of Africa, stated, “These projects illustrate the private sector’s critical role in delivering clean, cheap energy, particularly in the face of mounting climate change and environmental problems.” “Egypt has lofty renewable energy objectives, and we are delighted to support AMEA’s growth into Africa and its relationship with Egypt to speed the country’s transition to renewable energy.”
AMEA Power’s subsidiaries Abydos Solar Company and Amunet Wind Power Company will receive up to $145 million in loans from IFC as part of this transaction. As the hedging organisation for both projects, IFC is also reducing the majority of the risk of increasing interest rates by exchanging the variable interest rate for a fixed rate for the length of loans for the combined packages.
In its role as required lead arranger, IFC secured up to $160 million in long-term loans from the Japan International Cooperation Agency and the Dutch Entrepreneurial Development Bank (FMO) to finance the solar project. IFC raised over $500 million for the wind project from the Japanese Bank for International Cooperation and three commercial banks — Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, and Standard Chartered Bank — under insurance cover from Nippon Export Investment Insurance and a working capital facility from the Commercial International Bank of Egypt.
The projects represent IFC’s aim to expand access to clean, cheap power in Africa, where connection rates are among the lowest in the world, and show the significance of partnerships in the delivery of big, privately funded infrastructure projects. The projects are also consistent with Egypt’s National Climate Change Strategy 2050, which intends for renewables to account for 42 percent of total energy production by 2035.
AMEA Power’s Chairman, Hussain Al Nowais, stated that these major projects demonstrate the company’s long-term dedication, ambition, and expansion. “The firm is spearheading the development of renewable energy throughout Africa, which, via its global and regional collaborations, will provide clean electricity to millions of people throughout the continent. We are pleased to have reached this important milestone and to be aiding Egypt’s energy transformation and efforts to advance sustainable development. This accomplishment would not have been achieved without the hard work of AMEA power’s world-class staff, the backing of our project partners, bankers, and consultants, and the Egyptian government’s collaboration.”
The Abydos project will be located near Kom Ombo in the Egyptian province of Aswan, while the Amunet project will be constructed in the wind-rich Gulf of Suez area. Both projects are set to begin construction in December 2022, with the solar plant anticipated to be finished in 18 months and the wind farm in 30 months.
“The agreements for two wind and solar renewable energy projects signed with the IFC and AMEA Power demonstrate our commitment to the green transition, while highlighting the breadth of climate finance opportunities in Egypt and the critical role of private sector engagement in accelerating the national climate agenda. Moreover, both projects reflect the interdependence and complementarity between climate action and development efforts and highlight the importance of mobilising innovative financing mechanisms that provide an opportunity for the international community to support the climate agenda, according to Rania A. Al-Mashat, Minister of International Cooperation and Governor of Egypt for the World Bank Group.
IFC has a growing portfolio of advising and investment initiatives in Egypt, encompassing crucial sectors such as climate financing, healthcare, and gender equality.
