A consortium led by France’s Engie has reached financial close for the 250MW wind independent power project (IPP) it is developing in Ras Ghareb on the Gulf of Suez in Egypt.

Non-recourse project financing is provided by The Japan Bank for International Corporation (JBIC) in coordination with Sumitomo Mitsui Banking Corporation and Société Générale under a Nippon Export and Investment Insurance (NEXI) cover. Commercial International Bank (CIB) Egypt will act as working capital bank and Attijariwafa Bank will provide an equity bridge loan.

The consortium, which also comprises Japan’s Toyota Tsusho Corporation and the local Orascom Construction, has signed a 20-year power purchase agreement (PPA) with Egyptian Electricity Transmission Company (EETC) to deliver power to the national grid.

The consortium submitted the lowest tariff price of $0.041 a kilowatt hour (kWh) for the wind farm in April 2015 through a competitive bidding process, one of the lowest tariffs achieved in the world for a utility-scale wind power project. The bid was 9.3 per cent lower than the $0.045 a kWh tariff submitted by the second lowest bidder, a consortium of the UK’s Actis and Mainstream Renewable Power.

The consortium was advised by the UAE office of the UK-based law firm Clifford Chance.

The low tariff prices submitted for the Gulf of Suez IPP were reportedly due to a combination of factors, including a site location with high wind capacity and low interest rates.

The wind project is the largest renewable energy IPP to date, and will have a total cost of about $400m.

Construction of the wind farm is expected to take 24 months to complete.

Egypt is planning for wind energy to contribute 12 per cent of its total generation capacity by 2022, which will account for 7,110MW of wind capacity. As of 2016, wind energy accounted for about 640MW of installed capacity in the country.