Egypt wind farm reaches financial close

3 April 2023

The Red Sea Wind Energy consortium reached financial close for its 500MW Gulf of Suez wind farm project near Ras Ghareb, Egypt, on 3 April.

The project will be executed in two phases and connect to the grid by the third quarter of 2025. The consortium will operate and maintain the plant under a 25-year power-purchase agreement (PPA) with the Egyptian Electricity Transmission Company (EETC). Egypt's Ministry of Finance is backing the EETC's obligations under the PPA.

The wind farm will be built, owned and operated by Red Sea Wind Energy, a consortium of Engie with a 35 per cent stake, Orascom Construction, which holds 25 per cent, Toyota Tsusho Corporation with 20 per cent, and Eurus Energy Holdings Corporation with 20 per cent.

Orascom Construction will execute the construction of the civil and electrical works of the wind farm.

This project is expected to provide clean power to over 800,000 homes in Egypt, accelerate the country's transition to renewable power generation, and reduce CO2 emissions by approximately 1 million tonnes annually.

The project is also part of the energy pillar of the Nexus of Water-Food-Energy (NWFE) programme, an initiative presented by the Egyptian government at Cop27 in November 2022 that is expected to contribute towards the energy transition.

Non-recourse project financing is provided by the Japan Bank for International Corporation (Jbic), in coordination with Sumitomo Mitsui Banking Corporation, the Norinchukin Bank, Societe Generale and the European Bank for Reconstruction and Development (EBRD), under a Nippon Export and Investment Insurance (Nexi) cover. HSBC Bank Egypt is acting as the working capital bank and onshore security agent.

This project is a significant milestone for the consortium as it triples its wind energy capacity in Egypt to 762.5MW.

Additionally, it marks the first co-financing between Jbic and EBRD since the signing of a memorandum of understanding (MOU) in October 2022 and the first joint project between Nexi and EBRD since an MOU in October 2020.

MEED reported in mid-March that Jbic had signed a loan agreement to finance up to $240m of the project.

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Colin Foreman
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