London: The European Bank for Reconstruction and Development (EBRD) will invest as much as $500 million (Dh1.8 billion) in utility-scale solar photovoltaic plants in Egypt, with the goal of mobilising $1.5 billion from the private sector.
The London-based development bank plans to install about 700 to 800 megawatts of solar energy in Egypt, starting next year, Harry Boyd-Carpenter, a senior banker for power and energy utilities at the EBRD, said in an interview. The main recipient of the EBRD’s funds will be a 1.8-gigawatt solar park in Benban in the country’s southeast, he said.
Egypt has set a target of generating 20 per cent of its electricity from renewables by 2020. About 90 per cent of its electricity comes from fossil fuels, according to data from Bloomberg New Energy Finance. A giant gasfield was recently discovered off the coast of the nation in the Mediterranean Sea by Italian oil major Eni SpA, but the new supply of fuel is not damping clean energy ambitions, Boyd-Carpenter said.
“The appetite for renewables is not lessening; Egypt recently went from an energy exporter to an importer and has gone through a supply shock,” he said. “The country has learnt its lesson and has a clear determination to diversify its energy supply and increase security.”
The Benban solar project will cost about $4 billion to build and will comprise about 40 units, each with a capacity of 50 megawatts. Other development-finance institutions such as International Finance Corp., Overseas Private Investment Corp., European Investment Bank, African Development Bank, Islamic Development Bank are considering investing in the solar park.
“The 1.8 gigawatts will be the most solar PV at one site in the world,” said Jenny Chase, head of solar analysis at Bloomberg New Energy Finance. “Falling costs of solar panels are a huge factor in economies of scale like this, there has been a lot of excitement for solar in this region for about a decade but it hasn’t made economic sense until about now.”
At least 80 clean-energy developers have pre-qualified to enter Egypt’s renewables market, including major players such as Enel Green Power SpA, SunEdison Inc. and EDF Energies Nouvelles SA. Infrastructure works are under way, with four substations for the Benban solar park being built at a cost of $100 million.
The EBRD may be involved in other clean-power projects besides Benban, Boyd-Carpenter said. Egypt has outlined plans to install 2 gigawatts of wind energy, 2 gigawatts of utility-scale solar and 300 megawatts of residential solar. The bank has been working with the Egyptian government since January on the regulatory framework for its renewables industry.
“Egypt has seen three years of tremendous upheaval as well as economic challenges in a geopolitically delicate region,” Boyd-Carpenter said. “Solar is becoming a solution to the energy problem because it makes economic sense, on top of the environmental reasons for renewables, and this is very exciting.”
