EBRD and GCF support a new wind farm development with $100 mn in Egypt

The European Bank for Reconstruction and Development announced its continued support for the green transition process in Egypt, as it issued a loan of $100 mn to  Red Sea Wind Energy to finance the development, construction of a windfarm with a capacity of 500 MW in Gulf of Suez.

The loan consists of a part of up to $50 mn from  EBRD and a part of up to $50 mn from GCF for the benefit of Red Sea Wind Energy.

The loan is co-financed by JBIC and private commercial banks insured by Nippon Export and Investment Insurance. It is the first European Bank project co-financed by these Japanese institutions.

Dr. Mohamed Shaker, Minister of Electricity and Renewable Energy, stated that the Ministry of Electricity and Renewable Energy has taken many measures and  several mechanisms to encourage investment in the field of electricity generation from renewable energy through the private sector to maximize the benefit from renewable energy sources and exploit those natural resources that are enjoyed in all parts of Egypt.

As a result of these measures, the private sector has gained great confidence in the Egyptian electricity and renewable energy sector, as a large number of foreign investors and local private sectors applied to enter into new and renewable energy projects, including the wind farm project with a capacity of 500 MW in Gulf of Suez, by (ENGIE and Orascom Construction, Toyota Tsusho and Iris Energy).

Renewable energy projects contribute to saving fuel and reducing the import bill and carbon emissions, which is in line with the energy strategy to reach 42% of the total capacity from renewable sources in the energy mix by 2035.

He added that renewable energy projects will enhance Egypt's opportunities to export quantities of electricity to Europe, Asia and Africa through the expansion of electrical interconnection projects that are being implemented with neighboring countries.

Rania Al-Mashat, Minister of International Cooperation of Egypt at the European Bank for Reconstruction and Development, said that encouraging private sector investments through international cooperation aims to accelerate progress towards the transition to a green economy, noting that the ministry is working to achieve this through the national platform. For green projects, Novi AMS and with all development partners, including EBRD.

Moreover, Nandita Parshad is the Managing Director, Sustainable Infrastructure Group at EBRD said: “We are very proud to support this important wind farm in Gulf of Suez, our first as a major development partner for the energy hub of Novi programme."

She stressed that this project would lead to a fundamental transformation in Egypt that reduces its dependence on hydrocarbons, supports the creation of green businesses, provides new job opportunities, and reduces pollution and carbon dioxide emissions. The EBRD will proudly remain one of Egypt's key partners in its green transition journey.

Kavita Sinha, Director, Division of Private Sector Facility. GCF said: “The Green Climate Fund is proud to support this initiative, which will be the first wind farm and the largest in Africa. It is a strong example of the importance of innovative financing models.

This will be the third private wind farm in Egypt, and is expected to be the largest in Africa. This farm will help reduce carbon dioxide emissions by about one million tons annually, which is 217,000 cars off the road. The generated energy will be sold to  Egyptian Electricity Transmission Company over a period of 25 years.

This wind farm is one of the first to be built in the national platform for green projects, Novi programme.

This program is a major policy commitment developed by EBRD with Egyptian government and announced at COP27 Climate Summit.

The project constitutes the first step in a process aimed at generating an additional 10 GW of renewable energy between 2023 and 2028, that will help the Egyptian government achieve its renewable energy goal.

Egypt is a founding member of EBRD Since beginning operations there in 2012, the bank has invested more than €10.2 bn in 162 projects in the country.