A consortium comprising Saudi Arabia-based utility developer Acwa Power and Egypt’s Hassan Allam Holding has signed a 25-year land usufruct agreement with the North African country’s New and Renewable Energy Authority (NREA) for a 1,100MW wind independent power project (IPP).

The developer team signed the project agreements for the wind IPP project, which will be located in the Gulf of Suez and Gabal el-Zeit area, in June 2022.

Acwa Power said at the time that the consortium would work during the development phase to complete the site studies and secure financing for the project, which will require an investment of $1.5bn.

The wind project is expected to reach financial close by the third quarter of 2024 and be commercially operational by the end of 2026.

The wind IPP project will use wind turbines with blade heights of up to 220 metres to help achieve the “best use of the designated land plots in the most efficient way”.

The project is designed to mitigate the impact of 2.4 million tonnes of carbon dioxide emissions annually and provide electricity to 1,080,000 households when complete.

Egypt’s Council of Ministers approved signing the project’s power-purchase agreement (PPA) in November 2021.

It is understood the 1,100MW wind IPP is a replacement for the previously planned 2,300MW IPP in Luxor.

A consortium of Acwa Power and the local Hassan Allam signed the PPA with Egyptian Electricity Transmission Company for the planned Luxor IPP in November 2018.

The original gas-fired IPP scheme, which required a total investment of $2.3bn, was expected to enter commercial operation in 2023. The date was later extended to 2024 before the project was cancelled and replaced.

Hassan Allam Utilities operates a 50MW solar plant in the Benban solar park.

The 1,100MW wind IPP is Acwa Power’s third project – and first wind farm – in Egypt. The other schemes are the 120MW Ben Ban solar independent power projects in the Aswan region and the 200MW Kom Ombo solar plant.

Renewable energy sources, including hydropower, accounted for 10.3 per cent of Egypt’s electricity production installed capacity as of 2021, according to data published by the Abu Dhabi-based International Renewable Energy Agency.

Egypt aims for renewable energy sources to account for 42 per cent of its electricity production mix by 2035.