The European Bank for Reconstruction and Development (EBRD), which already has a facility for green private-to-private projects, has released a new tranche of financing worth US$ 5.5 million to TAQA PV for Solar Energy, TAQA Arabia’s subsidiary for renewable energy, to support the growth of renewable energy in Egypt.
The new investment will be used to finance the development and operation of a 7 MWp solar photovoltaic (PV) plant in El Minya, Egypt. It will be made up of a US$4.95 million loan from the EBRD and a US$550,000 concessional loan from the Global Environment Facility (GEF). Under a 25-year power purchase agreement, the facility will sell all of its electrical output to ASCOM Carbonate and Chemical Manufacturing (ACCM).
To finance the development and operation of a 6 MWp solar PV power plant at Dina Farms in the Beheira Governorate, 80 km from Cairo, Egypt, this tranche follows an initial US$ 4.2 million loan in December 2020. This facility, which enables Dina Farms, the largest dairy farm in Africa, to use clean energy for some of its energy consumption, was the first private-to-private renewable energy project financed by the EBRD in Egypt.
By encouraging the development of renewable energy, these investments support Egypt’s ongoing energy transition, which is taking place while the country hosts the COP27 international climate summit. The national share of renewable electricity generation capacity is expected to increase from 20% in 2022 to 42% by 2035, according to the Egyptian government. In recent years, the government has worked to diversify and liberalize the energy sector by creating a market for the production of private renewable energy. A significant step toward the gradual liberalization of the Egyptian electricity market is the growth of the private-to-private segment.
To expand the private-to-private renewable energy business of TAQA Arabia SAE, an Egyptian joint stock company, TAQA PV for Solar Energy is a project firm that was established in Egypt (a subsidiary of Qalaa Holdings).
The Southern and Eastern Mediterranean Private Renewable Energy Framework (SPREF), which supports the creation and financing of cutting-edge business models as well as the mobilization of private capital for renewable energy projects, is the framework that this project falls under. The Clean Technology Fund and the Global Environment Facility both support the framework. The Regional Dialogue Platform on Renewable Energy and Energy Efficiency, established by the Union for the Mediterranean to encourage the deployment of energy efficiency and renewable energy measures in energy generation, transmission, distribution, and end-use, also includes SPREF as a subgroup.
The EBRD has so far contributed more than €10.3 billion to 154 projects in Egypt. The Bank invests in the financial, agribusiness, manufacturing, and services sectors as well as infrastructure projects in the power, municipal water, wastewater services, and transportation sectors.