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Arab Finance: The African Development Bank (AfDB) Group approved a financing package of up to $66 million for the first phase of the 500-megawatt (MW) Dandara solar project and a 100-megawatt-hour (MWh) battery energy storage system in Qena Governorate, southern Egypt, according to a statement.
The financing will support the design, construction, operation, and maintenance of the photovoltaic (PV) power plant, which will be integrated with a battery energy storage system. This will supply renewable power during peak evening demand while mitigating the variability of solar generation.
The project is expected to reduce annual carbon dioxide (CO2) emissions by approximately half a million tons and create about 2,500 jobs during construction and 23 permanent roles during operation, with a special focus on women and youth employment.
The package includes $46 million from the AfDB's ordinary resources and $20 million in concessional financing from the Climate Investment Funds' Clean Technology Fund (CTF). Additional debt financing is expected to be mobilized through a consortium of development finance institutions, bringing the total cost of the project to over $290 million.
Under a 25-year power purchase agreement (PPA), Egypt Aluminum Company (Egyptalum) will serve as the sole off-taker of the project, which will also be supported by a wheeling deal with the Egyptian Electricity Transmission Company (EETC).
The project is expected to be fully operational at the beginning of 2028 and to generate an estimated 1,373 GWH of clean, reliable, and cost-effective electricity each year.
Kevin Kariuki, AfDB Vice President for Power, Energy, Climate, and Green Growth, commented: “The project depicts industrial decarbonization at best. It will enable EgyptAlum to safeguard its European aluminum market share while protecting more than 6,000 Egyptian jobs amid the European Union's Carbon Border Adjustment Mechanism, which took effect in January 2026.”
Kariuki further noted that the project will cut CO2 emissions by about 12.5 million tons over its life.
Wale Shonibare, Director of Energy Financial Solutions, Policy, and Regulation at AfDB, said: “As the largest private corporate PPA in Egypt and the region, Dandara will establish an important benchmark for future private investment in industrial decarbonisation and in commercial and industrial renewable energy.”
The project aligns with the group’s long-term strategy 2024-2033, its Four Cardinal Points strategic vision, and its Country Strategy Paper for Egypt, which aims to expand access to sustainable energy sources across Africa by catalyzing the mobilization of commercial capital in the power sector.
In May, Metallurgical Industries Holding Company, through its subsidiary Egyptalum, signed a $900 million agreement with Trafigura Group to expand the production capacity of the aluminum complex in Naga Hammadi.
