250 MW wind project in Egypt seeks financing from EBRD and IFC
Both the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) have disclosed that they are considering providing loans to a 250 MW wind project in Egypt. The project is owned by Lekela Power and has an estimated total cost of US$325 million.
Located in the Gulf of Suez, approximately 30km north-west of Ras Ghareb, the project involves the installation of 73 3.6 MW turbines and supporting infrastructure in a wider 284km2 area demarcated for private sector wind power projects. Turbine supplier Senvion will be the Engineering, Procurement and Construction and the equipment Operations and Maintenance contractor.
The wind farm is expected to generate an average of 1120 GWh annually, which will be sold to the Egyptian Electricity Transmission Company (EETC) under a 20-year Power Purchase Agreement (PPA).
The EBRD is considering a senior secured loan of up to US$81 million, while the IFC's investment is expected to consist of an A loan of c. US$25 million and mobilization provided under IFC’s Managed Co-Lending Portfolio Program (MCPP) of c. US$57 million. This financing is scheduled to be considered by the respective Boards of the institutions on 17 and 10 January 2019.
Remaining debt financing will be provided by the Overseas Private Investment Corporation (OPIC), the US government's development finance institution.
Construction of the wind farm is expected to begin in March 2019, with operations to commence two years later.
A consortium comprised of Egyptian firm Orascom Construction Ltd, French utility Engie and Japan’s Toyota Tsusho Corp is currently constructing another 250 MW wind farm in the Ras Ghareb area. The project reached financial close in December 2017 with the support of the Japan Bank for International Corporation (JBIC), Sumitomo Mitsui Banking Corp, Societe Generale, Commercial International Bank (CIB) Egypt and Attijariwafa Bank.
Both wind projects were tendered as Build-Own-Operate (BOO) schemes as part of the Egyptian government's aim to install 7 GW of wind power by 2022.
