Saudi-based water and power projects developer ACWA Power said on Wednesday that it has signed final project agreements including power purchase pact for the 200-megawatt (MW) Kom Ombo solar photovoltaic (PV) plant in Egypt.
The virtual signing of the 25-year Power Purchase Agreement (PPA), Network Connection Contract and Usufruct Agreement was attended by officials from the Egyptian Electricity Transmission Company (EETC); The New and Renewable Energy Authority (NREA), and ACWA Power, the Saudi company said in a press statement.
The Government Guarantee for the project was signed in January 2021 between ACWA Power and Mohamed Maait, Egypt’s Minister of Finance.
Mohamed Shaker El Markabi, Egypt’s Minister of Electricity and Renewable Energy said Egypt has the potential to harness renewable sources to generate up to nearly 90 gigawatts.
“In line with Egypt’s Integrated Sustainable Energy Strategy, our aim is to produce 42 percent of Egypt’s electricity using renewable sources by 2035. Currently necessary studies are being conducted to increase this percentage, stressing on maximising the utilisation of renewable energy in many areas, including water desalination and green hydrogen production.”
Paddy Padmanathan, President and Chief Executive Officer of ACWA Power, said: “The signing of the final project agreements for Kom Ombo PV reflects our longstanding relationship with the Egyptian Electricity Transmission Company (EETC) and The New and Renewable Energy Authority (NREA), as well as our shared commitment to advancing the country’s renewable energy landscape and decarbonisation efforts.”
The ACWA statement said the financial closure of Kom Ombo PV is scheduled for the third quarter of 2021, following the obtainment of a $40 million senior debt financing and a $14 million equity bridge loan from the European Bank of Reconstruction and Development (EBRD), in addition to a $27.2 million loan from the African Development Bank (AfDB) to finance the construction, development and design of the 200 MW solar PV project.
“Finalising the project agreements for Kom Ombo PV, marks a significant milestone towards fulfilment of the project. 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,” said Rajit Nanda, Chief Portfolio Management Officer and acting CIO of ACWA Power.
He said the project will achieve commercial operation in the third quarter of 2022.
Construction of the plant is expected to begin in the third quarter of 2021, the statement noted.
ACWA Power’s established energy portfolio in Egypt currently includes three solar PV projects located in the Aswan province (Benban 1, Benban 2 and Benban 3) with an aggregate capacity of 120 MW, as well as the 2250 MW Dairut-Luxor CCGT IPP in the Luxor Governorate.
Egypt has set a target of generating 22 percent of its power from renewables by 2022 and 42 percent by 2035.
(Writing by Syed Ameen Kader; Editing by Anoop Menon)
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