The Board of Directors of the African Development Bank today approved a loan of $ 27.2 million for the design, construction and operation of a 200 MW solar photovoltaic power plant in Kom Ombo, Upper -Egypt on the Nile.
The project is expected to reduce electricity costs for businesses and homes, as well as reduce greenhouse gas emissions and create jobs in construction and others.
The total cost of the project is estimated at $ 156.4 million. In addition to financing from the Bank, structured as a senior loan, the European Bank for Reconstruction and Development, the Green Climate Fund (GCF), the Arab Bank and the OPEC Fund for International Development will contribute to the financing. . The plant, 800 km south of Cairo, is owned by ACWA Power, one of the main Saudi promoters, investors and operators of power generation and desalinated water plants in the world.
“We are delighted to support this project which will offer one of the lowest generation tariffs on the continent,” said Kevin Kariuki, Bank vice president for electricity, energy, climate and green growth . He added that “the project supports Egypt’s energy transition and contributes to the achievement by the country of its target share of 20% of renewable energies by 2022”.
Egypt’s economy continued to grow during the COVID-19 pandemic and its demand for electricity is increasing at an average annual rate of 7%. By increasing Egypt’s installed power generation capacity from renewable sources, the plant is expected to reduce greenhouse gas emissions by more than 7 million tonnes of CO2 equivalent over a 25-year period. During the construction phase, 800 jobs will be created.
Egypt’s electricity grid is linked to those of neighbors Libya and Sudan, and the plant has the potential to greatly contribute to energy trade and access to electricity in the region.
The project aligns with Egypt’s Integrated National Sustainable Energy Strategy and the Bank’s New Deal on Energy for Africa, which aims to increase the share of renewable energy through innovative financing in the energy sector in Africa. The project also advances the institution’s Light Up and Power Africa High-5 strategic priority.
The Bank’s Deputy Managing Director for North Africa, Malinne Blomberg, said that “the newly approved transaction is a continuation of the Bank’s long-standing partnership with the Egyptian government and its strong support for the country’s reform program ”. In addition to advancing the country’s green development, “the Kom Ombo project also contributes to the sustainability of a sector essential for Egypt’s competitiveness and industrial development. More immediately, recovering from COVID-19 will benefit an efficient and sustainable energy sector, ”she added.
Egypt is one of the founding members of the African Development Bank Group. Since the start of lending operations in 1974, the Bank Group has financed more than 100 operations in Egypt in several sectors.