$400 million 250 MW wind project in Egypt reaches financial close

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The consortium proposing to build a 250 MW wind farm in Ras Ghareb, Egypt have achieved financial close for the project. The estimated value of the wind farm is US$400 million.

The consortium is comprised of Egyptian firm Orascom Construction Ltd, which holds a 20% stake, French utility Engie and Japan’s Toyota Tsusho Corp, with each of them holding a 40% stake.

Financing for the project was secured from Japan Bank for International Corporation (JBIC) in coordination with Sumitomo Mitsui Banking Corp and Societe Generale. Commercial International Bank (CIB) Egypt will act as working capital bank, while Attijariwafa Bank will extend an equity bridge loan.

The consortium signed a build-own-operate (BOO) contract for the wind farm at the end of October. It will be responsible for all building activities related to the project. Now that financial close has been reached, construction should commence shortly. It is expected to take 24 months.

Upon completion, the consortium will operate and maintain the wind farm for 20 years, having signed a 20-year power purchase agreement (PPA) with the Egyptian Electricity Transmission Company.

This is the first wind farm tendered on a BOO scheme in Egypt and is part of the government’s drive to increase the renewable energy capacity and meet the target wind generation capacity of 7 GW by 2022. The plan envisions significant private sector involvement, with the private sector taking the lead on more than 60% percent of the plan.

This is one of two wind projects in development in the Ras Ghareb area of Egypt. Lekela, a joint venture between private equity firm Actis and a consortium led by Ireland-based wind and solar developer Mainstream Renewable Power, signed a PPA with the Egyptian Electricity Transmission Company (EETC) and Egypt's energy minister for another 250 MW wind farm earlier this month. Financial close is expected to be achieved and construction commenced in early 2018.