Norwegian energy firm Scatec Solar aims to invest $3 billion in Egypt under the solar feed-in tariff (FIT) programme, in cooperation with some investors and two financial institutions,
Morten Langsholdt, Regional Director of Scatec Solar, said his company and along with a number of investors, the International Finance Corporation (IFC), and the European Bank for Reconstruction and Development (EBRD) intend to invest the new investments in Egypt under the solar FIT programme.
Egypt has approved feed-in tariffs for renewable energy production, allowing the government to guarantee a certain price for energy produced so as to encourage investment in the renewable energy sector, with tariffs depending on designated production categories.
The Norwegian company is expected to inject $500 million in Egypt next October, according to Langsholdt, who said that 40 solar power plants would be established in Upper Egypt’s Benban village.
The solar plants are to be completed in Aswan by 2018 with a capacity of 1,800 megawatts, the Scatec Solar official further said during a Cairo meeting on Sunday with Egyptian Minister of Investment and International Cooperation Sahar Nasr.
Egypt plans to increase its use of renewable energy to 22 percent by 2020, Minister Nasr told Langsholdt during the meeting.
Earlier, Scatec Solar and partners signed 25-year Power Purchase Agreements for delivery of electricity from six solar plants totaling 400 MW on April 13.
Total investments for the 400 MW of solar plants is estimated to $450 million and the plants are expected to generate annual revenues of about $60 million over the 25-year contract period. Scatec Solar will build, own and operate all six projects and Scatec Solar’s share of equity investments will be in the range of $50-70 million. Scatec Solar is partnering with local developers and with KLP Norfund Investments for equity investments in the projects and may add additional partners to an equity consortium before financial close.
European Bank for Reconstruction and Development (EBRD) is leading a consortium of banks that is expected to support the six projects with a total debt of up to $350 million.