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Saudi Arabian developer and utility operator ACWA Power has signed the final project agreements with Egypt for the construction and operation of a 200-megawatt photovoltaic solar power plant at Kom Ombo on the river Nile.
The signing of the 25-year power purchase agreement (PPA) and network connection contract and usufruct agreement is considered a “significant milestone” for the delivery of the project, which is envisioned to cut electricity costs for residents and businesses.
Work on the plant, located 800 kilometres south of Cairo, is scheduled to begin in the third quarter of 2021. Upon completion, the Kom Ombo PV facility will cater to the power needs of 130,000 households and offset 336,000 tonnes of carbon dioxide per year.
“[It] will be one of the largest privately developed utility scale solar plants in Egypt and will support the country in increasing its renewable energy capacity in line with the national targets to generate 22 percent of Egypt’s power from renewables by 2022 and 42 percent by 2035,” a statement said.
Financing
Last March, the board of directors of African Development Bank (AfDB) approved a $27.2 million loan for the project, which is estimated to cost around $156.4 million.
Financing for the project will also come from the European Bank for Reconstruction and Development (EBRD), the Green Climate Fund, Arab Bank and the OPEC Fund for International Development.
“Financial closure of Kom Ombo PV is scheduled for the third quarter of 2021, following the [release] of a $40 million senior debt financing and a $14 million equity bridge loan from EBRD, in addition to a $27.2 million loan from AfDB,” the statement said.
According to Rajit Nanda, chief portfolio management officer and acting CIO of ACWA Power, the plant is “on track to achieve commercial operation” in the third quarter of 2022.
The government guarantee for the project was signed in January 2021 between ACWA Power and Mohamed Maait, Egypt’s Minister of Finance.
The latest agreements were signed by senior government officials and representatives from the Egyptian Electricity Transmission Company (EETC), the New and Renewable Energy Authority (NREA) and ACWA Power.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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© ZAWYA 2021
