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Kom Ombo, Egypt’s Leading Renewable Energy Firm Gets $ 114 million Financing

April 23, 2021

The European Bank for Reconstruction and Development (EBRD), the OPEC Fund for International Development (the OPEC Fund), the African Development Bank (AfDB), the Green Climate Fund (GCF) and Arab Bank today signed a US$ 114 million financing package with ACWA Power for the construction of the largest private solar plant in Egypt.

The development of the Kom Ombo solar plant will add 200 MW of energy capacity, increasing the share of renewable energy in Egypt’s energy mix and further promoting private-sector participation in the Egyptian power sector.

The package comprises loans of up to US$ 36 million from the EBRD, US$ 18 million from the OPEC Fund, US$ 17.8 million from the AfDB, US$ 23.8 million from the GCF and US$ 18 million from Arab Bank. This is in addition to equity bridge loans of up to US$ 14 million from EBRD and US$ 33.5 million from Arab Petroleum Investments Corporation (APICORP).

The new Kom Ombo plant will be located less than 20 km from Africa’s biggest solar park, the 1.8 GW Benban complex. Once operational, the new utility-scale plant will serve 130,000 households.

ACWA Power submitted the lowest tariff in what was the first solar photovoltaic (PV) tender in Egypt. The provision of solar energy through a public tendering process aims to achieve a competitive tariff and promote the growth of solar energy as an affordable alternative to conventional energy sources.

Private-sector participation in the Kom Ombo project is the result of successful policy dialogue with the Ministry of Electricity and Renewable Energy and the Egyptian Electricity Transmission Company (EETC), as well as a US$ 3.6 million technical assistance programme, co-funded by the EBRD and the GCF, to support the EETC in administering competitive renewable energy tenders. In addition, the project has also benefitted from broader energy-sector reforms supported by the AfDB in recent years to scale up the involvement of the private sector.

EBRD President Odile Renaud Basso said: “We are very happy to team up again with ACWA Power in Egypt, after our successful partnership in Benban, to promote renewable energy in Egypt. Increasing the production of clean energy is an important step to reducing carbon emissions and addressing climate change. This is in line with the EBRD’s strategy to become a majority green bank by 2025. This project also marks the EBRD’s first co-financing project with the AfDB and the OPEC Fund in Egypt and we look forward to future joint investment opportunities for our institutions across Africa.”

OPEC Fund Director-General Abdulhamid Alkhalifa said: “We are pleased to contribute to Egypt’s efforts and strategy to expand its generation capacity in the renewable energy space. We have been at the forefront of advocating for access to affordable clean energy for many years. Kom Ombo will be our third project with ACWA Power and it exemplifies great cooperation between government, development finance and private-sector actors.”

“The Kom Ombo solar project is a truly remarkable transaction. It not only clearly demonstrates the indisputable competitiveness of solar PV vis-à-vis conventional sources of generation, but it also contributes directly to the realisation of Egypt’s ambitious renewable energy targets, in addition to being an excellent example of what stakeholders driven by a shared objective can achieve,” said AfDB Vice President of Power, Energy, Climate Change and Green Growth Kevin Kariuki.

Paddy Padmanathan, President and Chief Executive Officer of ACWA Power, said: “ACWA Power is privileged and proud to lead the realisation of the Kom Ombo PV project. The financing package signed today brings us closer to not only the people and the government of Egypt, but also to our finance partners, the EBRD, AfDB, the OPEC Fund, the GCF, Arab Bank, and APICORP reflecting our shared objective of supporting the energy transition to address the threat of climate change. Kom Ombo PV is the fourth project in ACWA Power’s Egyptian portfolio and the conclusion of this financing demonstrates the confidence in the Egyptian government’s ambitious renewable energy plans, being implemented through private-sector participation.”

Yannick Glemarec, Executive Director of the Green Climate Fund, said: “The GCF is proud to support implementation of Egypt’s ambitious renewable energy financing framework. US$ 154.7 million in GCF resources, including US$ 23.8 million for the Kom Ombo plant, catalyses over US$ 850 million in co-financing and unleashes the first wave of private renewable energy projects in Egypt. The GCF looks forward to continuing to support the government of Egypt in delivering on its ambitious climate targets through innovative partnerships with the private sector.”

Nemeh Sabbagh, CEO of Arab Bank, said: “We are proud to capitalize on our long experience in this sector and partner again with EBRD to provide debt financing and related banking services to another renewable energy project in Egypt for our client ACWA. Green financing is one of our strategic focus areas and Egypt is a core market for Arab Bank Group, where we have been operating since 1944”.

The Kom Ombo plant will contribute to the Egyptian government’s target to generate 42 per cent of the country’s electricity from renewable energy sources by 2035 while delivering one of the lowest generation tariffs on the continent.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

European Bank for Reconstruction and Development and NBE Boosts Private Businesses in Egypt

June 22, 2020

With a loan of US$ 100 million in support of SMEs and private businesses in Egypt and an additional US$ 100 million aimed at increasing the current trade finance limit, the European Bank for Reconstruction and Development (EBRD) is supporting the Egyptian Economy with a US$ 200 million financing package through the National Bank of Egypt (NBE) for trade and for on-lending to local companies impacted by the coronavirus pandemic.Under this facility, the EBRD will provide a US$ 100 million loan to help NBE provide short-term loans to private small and medium-sized enterprises and firms facing liquidity strains due to a decrease in their activities and turnover caused by the crisis.

Jurgen Rigterink, EBRD First Vice President

In addition, the Bank is increasing an existing uncommitted trade finance limit for NBE by US$ 100 million under the EBRD’s Trade Facilitation Programme to reach US$ 300 million, to help meet the increased demand for import and export transactions. Jurgen Rigterink, EBRD First Vice President, said: “We are very happy to partner again with NBE to provide financing to local small businesses, the backbone of the economy. Strengthening this segment of the Egyptian economy has never been more important than during this crisis.”

Hisham Okasha, NBE Chairman, said: “NBE is committed to minimising the economic and financial impact of Covid-19 on the Egyptian economy and our customers in particular. This new facility, under the EBRD’s Solidarity Package, targets a crucial segment of the economy, which we will continue to support, thus ensuring its resilience. This facility comes on the heels of an increase of US$ 100 million in our trade finance programme with the EBRD as well as the signing of a package in the amount of US$ 150 million to support young people in business, skills in business and green climate financing.”

In response to the coronavirus pandemic the EBRD now expects to dedicate the entirety of its activities in 2020-21 to combating the economic impact of the crisis and stands ready to provide support worth up to €21 billion over this period in the 38 emerging economies where it invests. NBE is the largest commercial bank in Egypt. Since the cooperation with the EBRD began in 2013, credit and trade finance lines have been signed, including in support of women in business and to strengthen energy efficiency.Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the Bank has invested close to €6.5 billion in 115 projects in the country.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Why Egypt’s Economic Growth Drops in 2020 Due to Covid-19 Pandemic

May 15, 2020

European Bank for Reconstruction and Development

Though Egypt’s economy will slow sharply this year because of the impact of the coronavirus, unlike some like South Africa and Nigeria, it is most likely to avert a recession. This was made known in a new report made public today by the European Bank for Reconstruction and Development (EBRD) published today. The latest edition of the EBRD Regional Economic Prospects report sees growth in Egypt in 2020 of 0.5 percent, compared with 5.6 percent in 2019. It predicts a rebound to 5.2 percent in 2021.

The report says the deceleration led by the Covid-19 pandemic reflects a slowdown in the tourism sector, disruptions in global value chains, and a slowdown in demand from trading partners and in foreign direct investment. However, large public construction projects and the boom in the telecommunications sector have so far been factors supporting growth. The main risks to the outlook arise from the need for a tougher lockdown if the spread of Covid-19 accelerates and from the negative outlook in Egypt’s main trading partners.

In the EBRD southern and eastern Mediterranean region, the negative impact of the coronavirus is expected to be seen in the tourism sector, a decline in domestic demand due to containment measures, a fall in demand from the main trading partners and a slowdown in foreign direct investment. On average, the economies of the region are expected to shrink by 0.8 percent in 2020 before rebounding with growth of 4.8 percent in 2021.

Jordan, Morocco and Tunisia are expected to contract this year. Lebanon, which had already fallen into recession in 2018 and 2019, is likely to see an especially sharp fall of 11 percent in 2020. Economies across the EBRD regions may contract on average by 3.5 percent this year, with a rebound of 4.8 percent possible in 2021, the report said, warning that the projections are subject to “unprecedented uncertainty”. The report assumes a modest impact of the crisis on the long‐term trajectory of economic output, with growth resuming towards the end of the third quarter, but potentially significant longer-term economic, political and social effects.

“If social distancing remains in place for much longer than anticipated, the recession may be much deeper, with the 2019 levels of output per capita not attained again for years to come,” the report said. Across the EBRD regions, containment measures have affected domestic demand and supply. External shocks include a sharp drop in commodity prices, weighing on commodity exporters, disruption to global value chains, a collapse in tourism and a drop in remittances.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry