Norway-based renewable energy company Scatec announced on Thursday that it signed a 25-year corporate Power Purchase Agreement (PPA) with Egypt Aluminium for a major solar plus Battery Energy Storage System (BESS) project.

The project involves the construction and operation of a 1.1 gigawatts (GW) solar photovoltaic (PV) power plant with a 100 MW (megawatts)/200MWh (megawatt-hours) BESS.

Scatec said the USD-denominated PPA with Egypt’s largest aluminium producer is backed by a sovereign guarantee, adding that it is targeting financial close and start construction within the next 12 months.

Egypt Aluminium is the largest industrial electricity consumer in the country and exports approximately 60 percent of its production to Europe. The project will be instrumental for the company’s ambition to decarbonise its aluminium production, and to meet EU’s Carbon Border Adjustment Mechanism (CBAM) requirements which will be introduced in 2026.

Scatec said the key next steps for the project are to work with the relevant authorities to allocate land, finalise grid connection and secure financing.

The estimated total capital expenditure for the solar PV + BESS project is approximately $650 million which will be funded by approximately 80 percent non-recourse project debt, and the remainder by equity from Scatec and partners.

Scatec owns 100 percent of the project but is targeting to reduce its long-term economic interest by inviting additional equity partners.

The company will be the designated EPC service provider, with an EPC share of approximately 90 percent of total capex, as well as asset manager (AM) and operations and maintenance (O&M) service provider.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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