EBRD becomes shareholder in Egyptian private firm Infinity Energy
The European Bank for Reconstruction and Development (EBRD) said on Wednesday it has become a shareholder in Egyptian private-sector company Infinity Energy.
EBRD’s commitment in Infinity Energy amounts to $60 million, according to a bank statement.
“The funds will go towards developing the company’s pipeline of renewable energy and electricity distribution projects as well as electric vehicles charging stations.” EBRD statement read.
The investment is in parallel to signing a joint venture agreement between Infinity Energy and Abu Dhabi Future Energy Company PJSC (Masdar). Under the agreement, Masdar will invest in Infinity Energy’s portfolio of renewable assets, and partner with Infinity in upcoming renewable energy projects in Egypt and Africa.
EBRD said its investment would contribute to Egypt’s ongoing energy transition by supporting the growth of renewable energy.
The Egyptian government is targeting a 20 percent of its electricity generation from renewable sources by 2022 and 42 percent by 2035.
In Egypt, the price of electricity produced by renewable projects has been steadily declining across the past several years to become more competitive than conventional fossil fuel sources. This has led to witnessing a strong demand in Egypt from commercial and industrial heavy electricity consumers to have access to electricity from private renewable energy producers.
The Egyptian government has pursued energy diversification and liberalisation by facilitating a market for private renewable energy development in recent years. However, access to equity financing remains key to the development of renewable energy in the country.
“We have had the privilege of working with the Infinity team since we lent to their Benban projects in 2017.” Harry Boyd Carpenter, EBRD director for energy for EMEA, said.
“We are very proud to take that partnership to the next level by becoming a shareholder in Infinity Solar Energy S.A.E. to further develop the renewable energy sector in Egypt.”
Carpenter said EBRD is excited to support the company in its ambitious plans and its transition into an integrated energy solution provider.
“Egypt’s energy sector liberalisation and embrace of its renewable resources are creating incredible opportunities and Infinity is ideally placed to exploit these. We are also very pleased that through this investment we will further deepen our longstanding partnership with Masdar.” Carpenter added.
Hassan El Khatib, EBRD managing director for equity, stressed that the role of the private sector is key for the wider development of and regionally, a very interesting investment thesis.
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the European bank has invested over €5.8 billion in 105 projects in the country. In both 2019 and 2018, Egypt was the largest economy in which the EBRD invests, in terms of new commitments.
In the last twelve months EBRD has also provided US$ 89 million of project financing for the 250 MW West Bakr windfarm and €185 million to support the state-run Egyptian Electricity Transmission Company’s network investment plan.