IFC to finance six solar projects in Egypt

12 May 2016

Revised project documents issued, reversal on arbitration rules

The International Finance Corporation (IFC), part of the Washington-based World Bank Group, is preparing to finance six solar photovoltaic (PV) projects under Egypt’s feed-in tariff scheme.

Most of the projects have a capacity of 50MW and have been allocated a site at Benban site near Aswan.

The IFC’s total lending for the six projects is $110m. It hopes to mobilise a further $370m from other sources.

CompanySizeLocationEPC contractorCost ($m)IFC loan ($m)B-loan/parallel loans ($m)
Gestamp Solar FiT (AlTawakol Electrical Company (GILA; local), X-ELIO Energy (Spain) and Spectrum International for Renewable Energy; Jordan)50MWBenban SBN1-1Elecnor (Spain), Consolidated Contractors Company (CCC; Athens-based)1282076
Taqa Arabia Solar (Qalaa Holdings; local)50MWBenban (SBN21-3)Sterling & Wilson (India)1152067
Taqa Arabia (Qalaa Holdings; 50%) & Solar Reserve (US; 50%)50MWZafarana (PV-4)Sterling & Wilson1152067
Cairo Solar Farm (Globeleq; UK; 49%, local investors)50MWBenban (SBN20-3)Sterling & Wilson, Shapoorji Pallonji (India)1082061
Delta Solar (Nile Capital; local; 35%, Canadian Solar; 40%, Ideemasun Energy (Germany; 25%)50MWBenban (19-3)Enneray (Italy)1202070
Gestamp solar 2 (AlTawakol Electrical Company (GILA), X-ELIO Energy, Spectrum International for Renewable Energy)20MWBenban (SBN42-4)Elecnor, CCC541030
Source: IFC      

The debt to equity ratio for the projects is expected to be around 75:25.

The entire feed-in tariff programme has a maximum capacity of 4300MW, which implies an investment of $8bn. For the 2000MW, or more than 40 utility scale solar PV projects, development banks including the IFC, the European Bank for Reconstruction & Development (EBRD) and the African Development Bank (AfDB) plan to extend up to $2bn of finance.

Mohamed Salah el-Sokbi, executive chairman of the New & Renewable Energy Association (NREA), told local press that 87 investors eligible to go ahead with feed-in tariff projects.

However, the deadline for financial close, in late October, is looking increasingly tight. Projects which do not reach a financial close by then are expected to be moved onto a less generous tariff.

Revised project documents have been released. Clauses allowing international arbitration, which were previously negotiated and agreed, have been removed.

This is likely to delay the signing of power purchase agreements (PPAs) further, as developers and lenders protest the change.

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