Egypt Signs Preliminary $650 Million Financing Terms for 1 GW Solar Plant

Egyptian Prime Minister Moustafa Madbouly witnessed the signing of the initial financing terms for a $650 million solar project in the city of Nag Hammadi, Qena Governorate, with a capacity of one gigawatt, according to a Cabinet statement.

The project includes a 200 MWh battery storage system and will be developed in two phases, each comprising 500 MW of solar power and 100 MWh of storage, according to the statement.

Norway's Scatec signed the agreement with the European Investment Bank, the European Bank for Reconstruction and Development, and the African Development Bank. Separate agreements covered connecting the project to the grid and the participation of the National Bank of Egypt in the project company.

The project aims to supply nearly a third of the electricity needs of Egypt Aluminium, a subsidiary of the Metallurgical Industries Holding Company. It is expected to reduce carbon emissions from aluminum production and enhance the competitiveness of Egyptian exports amid tightening environmental requirements in international markets. The agreements represent a step toward finalizing financing and execution arrangements, as part of cooperation between the Egyptian government, Scatec, international financial institutions, and local banks to expand the use of renewable energy in industry.

What Do These Terms Mean?

Initial Financing Terms: A preliminary agreement outlining the financing amount and conditions prior to the final signing of loan contracts.

Megawatt-hour: A unit measuring the amount of electricity stored or consumed, equal to one thousand kilowatt-hours.

Carbon Emissions: Gases produced by burning fossil fuels that contribute to climate change, usually measured by the amount of carbon dioxide.