The first phase of the Benban solar park in Aswan has been inaugurated by Egypt’s Minister of Electricity Mohamed Shaker. The PV Park is being developed under the feed-in-tariff (FiT) renewable energy programme, occupying 37 square-kilometers.
On completion, the park will host a total capacity of 1.8GW, making it the largest planned solar installation in the world.
Benban solar park
The project will reduce up to 100,000 tonnes of CO2-equivalent per annum. As a result it will support Egypt’s emission reduction targets under the Paris Climate Agreement, as well as promoting sustainable energy development and private sector participation in the country’s energy landscape.
So far 30 solar projects have achieved financial close, with over US $2.2bn in financing, according to Zulficar & Partners Law Firm who advised the Egyptian Electricity Transmission Company (EETC) on the second round of the feed-in-tariff solar programme in Benban.
The 30 projects have an aggregate installed capacity of 1.6 GW, media reported.
Financial backing
The Islamic Corporation for the Development of the Private Sector (ICD) and Alfa Solar Co signed facility agreements for a US $28.5m Shariah-compliant senior financier to part-fund the development, construction and operation of the Benban solar complex.
Additionally, the pair is partnering with the European Bank for Reconstruction and Development (EBRD), which will provide the project with a matching conventional loan facility.
In October last year, an Egyptian renewable energy developer and Germany-based solar partner, secured a US $87m syndicated loan for the construction and operation of two solar photovoltaic (PV) power plants at the Benban complex in Upper Egypt.
These funds were pooled from the European Bank for Reconstruction and Development (EBRD), the Green Climate Fund (GCF) and the Dutch Development Bank (FMO).
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According to EBRD, each development will be funded through loans of US $87m under an A/B structure. This structure will comprise EBRD A Loans of US $58m, of which US $44m will be from the Bank’s own account and US $14m from the Green Climate Fund.
FMO will provide B Loans of US $29m. The development consortium was supported by Synergy Consulting and Solizer, which acted as transaction advisors for the two projects.
Furthermore, the investment is part of the EBRD’s US $500m EBRD framework for renewable energy in Egypt, adopted by the Bank’s Board of Directors earlier this year.
The framework aims to develop Egypt’s potential in renewables and strengthen private sector involvement in the power and energy sector.
The Benban project is set to be completed by mid-2019.
