The Board of Directors of the African Development Bank has approved a loan amounting to $170 million that will be utilized the development of 1.1GW Gulf of Suez Wind Farm Project. This project currently stands as Egypt’s largest wind energy initiative. This funding will be utilized to develop the Gulf of Suez 1 Wind Project.
The overall cost of this energy initiative stands at approximately $1.1 billion. The bank’s funding is in addition to funding expected from a consortium of Development Finance Institutions (DFIs), banks, and financial institutions.
The Gulf of Suez Wind Energy Project Factsheet
Gulf of Suez 1 Wind Project
- Capacity: 1.1GW
- Timeline: Expected to be fully operational by August 2025
- Location: along the Gulf of Suez, divided into two sites, each with a capacity of 550 MW
- Electricity generation: expected to produce 4,111 GWh annually, supplying clean energy to more than one million households
- Environmental Impact: The project will cut annual CO2 emissions by roughly 1.71 million tons
- Total cost: Approximately $1.1 billion
Gulf of Suez 2 Wind Project
- Capacity: 500MW
- Timeline: Expected to become fully operational by October 2025
- Location: shores of the Gulf of Suez, approximately 40 km northwest of Ras Ghareb
- Environmental impact: will significantly cut CO2 emissions by roughly 1,000,000 tons per year
- Developer: The project is developed by Red Sea Wind Energy. This is a consortium comprising ENGIE, Toyota Tsusho Corporation, Eurus Energy Holdings Corporation, and Orascom Construction
The Gulf of Suez Wind II Extension
- Capacity: It aims to add 150 MW to the existing 500 MW wind farm, bringing the total capacity to 650 MW
- Location: shores of the Gulf of Suez, approximately 40 km northwest of Ras Ghareb
- Developers/Contactors: The project is developed by Red Sea Wind Energy. This is a consortium comprising ENGIE, Toyota Tsusho Corporation, Eurus Energy Holdings Corporation, and Orascom Construction
- Timeline: This particular extension is expected to become operational by October 2025
- Environmental impact: cut CO2 emissions by approximately 300,000 tons annually. This is in addition to the 1,000,000 tons reduction from the initial 500 MW project
This ambitious project has been accorded a Golden License by the Egyptian cabinet. This prestigious license tends to provide a set of incentives. It entails streamlined approvals to speed up the implementation of the project and its overall contribution to the renewable energy goals of Egypt.
Egypt Emerging as a Renewable Energy Leader in Africa
The Vice President for Power, Energy, Climate, and Green Growth at the AfDB mentioned, “The project is a landmark development. It underscores the leadership of Egypt in renewable energy. Moreover, it outlines the bank’s commitment to supporting transformative and clean energy projects across the African continent. This project tends to boost the Egyptian government efforts to attain 42% of clean energy in its overall energy mix by 2030. Moreover, it also drives the local economic growth and also strengthens the existing regional energy security.”
Wale Shonibare the Bank’s Director of Energy Financial Solutions, Policy, and Regulations commented:
“Being the largest wind energy project in Egypt, this particular project exemplifies the scale of the potential of renewable energy across Africa. Additionally, it shows how strong partnerships and innovative solutions are able to advance the energy transition and also spearhead sustainable economic growth.
Details of the Gulf of Suez 1 Project
This ambitious project will involve the design, construction, operation, and maintenance of the greenfield wind farm (project). Furthermore, it will be divided into two sites. Each of the sites will possess a capacity of 550MW. The sites will be located along the Suez Canal.
Egyptian Electricity Transmission Company (EETC) has been tasked to be the sole off-taker under a 25-year take-or-pay Power Purchase Agreement (PPA).
This wind project will have the capacity of generating 4, 111GWh per year. It will be supplying clean and renewable energy to a total of over one million households.
Additionally, it will cut the annual CO2 emissions by roughly 1.71 million tons. This factor will greatly contribute to the climate commitments Egypt made under the Paris Agreement.
Initially, the construction works of the Gulf of Suez wind farm in Egypt is commenced in 2023. This was according to New and Renewable Energy Authority (NREA) Executive Chairperson, Mohamed El-Khayat. It’s operations are set to begin in August 2025.
Also Read:Largest wind farm in Africa to be commissioned
Capacity of Renewable Energy in Egypt
The current capacity of renewable energy in the Arab republic of Egypt as of 2023 reached 6, 709 megawatts. This represents a 6.12% increase from the previous year.
Lastly, as revealed by El Khayat renewable energy beats traditional energy in terms of cost easing the burden on the general budget. Furthermore, it is noted that recent economic reforms, for example the liberalization of local exchange rate and fuel subsidy cuts allows the government to adopt the BOO scheme. Considering this, the Egyptian Electricity Transmission Company (EETC) is committed to purchase the energy produced according to the contract price.
