Norwegian firm has signed a 25-year power-purchase agreement for a wind IPP and reached financial close on its $590m solar and battery project
Norwegian renewable energy company Scatec has announced updates on two utility-scale renewable independent power projects (IPPs) in Egypt.
For the first project, it has announced the signing of a 25-year power-purchase agreement (PPA) with Egyptian Electricity Transmission Company (EETC) for a new 900MW onshore wind IPP at Ras Shukeir on the Red Sea coast.
The PPA is denominated in US dollars, allowing it to be derisked from any fluctuations in the value of the Egyptian Pound. It is also sovereign-backed, further reducing development risk.
Scatec will set up a special-purpose vehicle project company called Shadwan Wind Power to develop the IPP. It says it will now proceed to conducting year-long wind measurements at the site before proceeding to financial close and construction.
Separately, the developer has announced financial close on its Obelisk solar power hybrid solar and battery project at Nagaa Hammadi in Upper Egypt, about 80 kilometres northwest of Luxor.
Under the terms of the non-recourse financing, the IPP will receive $479m extended by the European Bank for Reconstruction & Development (EBRD), the African Development Bank (AfDB), and British International Investment (BII).
The financing amount corresponds to approximately 80% of the total estimated capex of $590m, with the difference funded from Scatec’s own equity injections at the end of the construction period after it recently signed equity bridge loans (EBLs) of $120m for the project.
The Oslo-headquartered firm signed the 25-year PPA with EETC in September last year.
The project will be constructed in two phases.
The first phase comprises a 561MW solar and 100MW/200MWh battery storage project, which is targeted to reach commercial operation in the first half of 2026.
The second phase comprises a 564MW solar project, which is expected to reach commercial operation in the second half of the same year.
Scatec itself will deliver engineering, procurement and construction, asset management, and operations and maintenance services for the project.
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