Egypt’s ambitious target to developing one of the world’s largest solar generation parks has gained international support. The World Bank Group, announced the guarantees of up to US $102.6m in support of the construction, operation and maintenance of six solar power plants in Egypt.
The power plants will collectively have a combined capacity of up to 250MW. They will also represent the first set of a total of 12 projects approved by MIGA’s board in support of the country’s Solar Feed in Tariff (FiT) programme.
The guarantees are being provided against the risks of Expropriation, Transfer Restriction and Inconvertibility, Breach of Contract, and War and Civil Disturbance.
US $5m of coverage is being provided for by equity holder ib vogt GmbH of Germany for up to 15 years. While an additional US $97.6m of cover is being provided for up to 20 years to lender Industrial and Commercial Bank of China (ICBC) of People’s Republic of China, bolstering the longer-term strength of the projects against fluctuating tariffs.
According to MIGA executive Vice President and CEO Keiko Honda, significant investments are important in Egypt to meet growing demand for power, and diversify the country’s energy mix.
He further added that they are proud to be supporting Egypt’s ambitious efforts to deliver reliable power to its citizens, while helping tackle climate change.
Solar generation park
The projects will contribute to the government’s target of having renewable energy contribute 20% of power generation by 2020, and also the FiT programme, which seeks to attract private sector investment for up to 4.3GW in solar and wind power generation.
Energy from the power plants will be sold in Egyptian Pounds at $0.084 per kilowatt hour to the Egyptian Electricity Transmission Company under a 25-year Power Purchasing Agreement.