French energy company Engie said it won a contract from the Egyptian government to develop a 250 megawatt wind farm in Rhas Gharib area on the Gulf of Suez
Engie will develop the farm together with its consortium partners Toyota Tsusho Corporation/Eurus Energy Holdings Corporation (40 percent) and Orascom Construction Limited (20 percent).
Total investment for the project is likely to reach $400 million. Financing will be provided by the Japanese Bank for International Corporation (JBIC) in coordination with commercial lenders SMBC and Sociéte Générale.
In addition, the Japanese Export Credit Agency, NEXI is providing an insurance cover for the commercial lenders. Construction is expected to start end of 2017 and will take approximately 24 months to complete.
The Gulf of Suez is the first wind farm tendered on a build, own and operate (BOO) scheme and comes as part of the Egyptian government’s drive to increase the share of renewables in the energy mix with a target wind generation capacity of 7 gigawatts by 2022.
The plan envisions significant private sector involvement, with the private sector taking the lead on more than 60 percent of the plan.
The wind farm will be located in Rhas Gharib on the Gulf of Suez an optimal site with more than 60 percent of gross capacity factor. The energy will be sold under a 20-year Power Purchase Agreement (PPA) to the Egyptian Electricity Transmission Company (EETC).
“Egypt is a country which expects a strong power demand growth in the next years to accompany its economic and social development. With this large wind project, Engie becomes an important player in Egypt’s ongoing renewable energy transition.” Bruno Bensasson, the CEO of Engie Africa, said.
“Gulf of Suez is definitely proof that good regulation can bring foreign investment at a competitive price to the benefit of African countries. For our group it is an opportunity to scale up our presence in a strategic country with a long-term contracted asset guaranteed by the government,” he added.
In Egypt, Engie remains committed to develop additional generation capacity and is looking to extend its energy services activities and its offer for sustainable cities, taking the opportunity of the Government’s “New Cairo” and “New urban planning of Suez canal area” programmes.