In an exciting development for the renewable energy landscape in Africa, Scatec has officially inked a milestone 25-year Power Purchase Agreement (PPA) with Egypt Aluminium. This ambitious initiative encompasses a robust solar photovoltaic (PV) project with a whopping 1.1 gigawatts (GW) of capacity, complemented by a battery energy storage system (BESS) of 100 MW/200 MWh. The deal comes with the assurance of a sovereign guarantee, marking a significant step toward green energy in Egypt.
Egypt Aluminium stands tall as the nation’s leading aluminium producer, and it’s making strides not just in production but also in sustainability. The company exports about 60% of its output to Europe, and this new solar project is pivotal for their strategic goal: decarbonizing aluminium production. With the European Union’s Carbon Border Adjustment Mechanism (CBAM) coming into play by 2026, Egypt Aluminium is vying to adhere to these environmental guidelines while enhancing its marketability overseas.
But what’s next for this groundbreaking project? Scatec is set to collaborate with local authorities to secure land allocations, finalize grid connections, and arrange the financing necessary to make this vision a reality. The plan is ambitious; the company aims to reach financial closure and kickstart construction within the upcoming year, solidifying Egypt’s commitment to a sustainable energy future.
With an estimated total capital expenditure of around USD 650 million, the financing structure for this solar PV and BESS project will primarily rely on approximately 80% non-recourse project debt. The remainder will be sourced through equity contributions from Scatec and its partners. Although Scatec fully owns the project, there are plans to invite additional equity partners to foster growth and share the benefits. Notably, Scatec will also take on the role of EPC service provider, accounting for roughly 90% of the total capex, alongside responsibilities in asset management and operations and maintenance.
This partnership not only underscores Egypt’s transition towards renewable energy but also showcases the potential of collaborative projects to drive economic growth, sustainability, and innovation in the region.
Stay tuned to Africazine for more updates on this exciting development and other news affecting the African landscape.
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