ACWA Power’s Kom Ombo solar project obtains financing package

Financing institutions for this project include European Bank for Reconstruction and Development (EBRD), OPEC Fund for International Development (the OPEC Fund), African Development Bank (AfDB), AfDB’s Sustainable Energy Fund for Africa (SEFA), Green Climate Fund (GCF), Arab Petroleum Investments Corporation (APICORP) and Arab Bank.

The package comprises loans of up to US$36 million from the EBRD, US$14.6 million from the OPEC Fund, US$14.4 million from the AfDB, US$34.5 million from the GCF, US$14.8 million from Arab Bank and US$10 million from the SEFA under the COVID-19 IPP relief programme. The project already has equity bridge loans of US$14 million from the EBRD and US$45 million from the Arab Petroleum Investments Corporation (APICORP).

“ACWA Power's successful acquisition of financing support for our renewable project is a significant milestone. We're fully committed to fast-tracking the project's development while staying true to Egypt's renewable energy targets,” said Marco Arcelli, CEO of ACWA Power.

“The Kom Ombo solar project further demonstrates the private sector's active involvement in Egypt's energy transition. This accomplishment highlights the shared vision and purpose of various global financing institutions in achieving the Republic’s targets, which would not be possible without the trust and support of the government, the Egyptian people, and communities,” he added.

The Kom Ombo plant will be located less than 20 km from Africa’s biggest solar park, the 1465 MW Benban complex – another ACWA Power development – and is expected to be commercially operational in January 2024. Once fully functional, the new utility scale plant will serve 130 000 households.

While the financing documentation was originally signed in April 2021 with the EBRD, the OPEC Fund, the GCF, AfDB and Arab Bank, the dynamics in global supply chains due to COVID-19 altered the dynamics for the development of solar plants. This resulted in the extension for Kom Ombo’s project execution.

Arcelli emphasised: “The new financing package is a result of the confidence that major institutions have in our proven track record of developing large scale projects. With this funding, we are fully committed to working collaboratively with our partners in the public and private sectors to ensure that this project delivers a strong and sustainable outcome for all involved.”

“We are delighted to reach this important milestone and deepen our partnership with ACWA Power as we promote renewable energy in Egypt, and indeed in Africa. Expanding clean energy generation is central to low-carbon development on the continent and contributes to further reducing carbon emissions and achieving of the goals of Paris Agreement. This is in line with the AfDB’s strategy to promote green growth in Africa. Kom Ombo Solar is also our first collaboration with EBRD, and OPEC Fund in Egypt and we look forward to many more successful partnerships as we seek to enhance more co-financing opportunities across the continent,” said Kevin Kariuki, The African Development Bank’s Vice President in charge of Power, Energy, Climate Change and Green Growth.

Private-sector participation in the Kom Ombo project is the result of successful policy dialogue with the Ministry of Electricity and Renewable Energy and the Egyptian Electricity Transmission Company (EETC), as well as a US$3.6 million technical assistance programme, co-funded by the EBRD and the GCF, to support the EETC in administering competitive renewable energy tenders. In addition, the project has also benefitted from broader energy-sector reforms supported by the AfDB in recent years to scale up the involvement of the private sector.

“We are proud to support the financing of this highly strategic project. The Kom Ombo project is the first tendered utility-scale solar project in Egypt, and one of the first to be delivered under the Energy Pillar of the Nexus Water-Food-Energy (NWFE) initiative, whereby the Egyptian authorities are committed to developing 10 GW of new renewable energy projects and decommissioning 5 GW of thermal capacity. We look forward to the successful closing of the project, and to continuing our cooperation with our longstanding partner ACWA Power in advancing the transition to sustainable energy in the countries we operate in,” concluded Nandita Parshad, Managing Director- Sustainable Finance Group, EBRD.

The Kom Ombo plant will contribute to the Egyptian government’s target to generate 42% of the country’s electricity from renewable energy sources by 2035 while delivering one of the lowest generation tariffs in Africa.

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