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Norwegian renewable energy firm Scatec has commenced construction on the first phase of its 1.1GW Obelisk solar and 100MW/200MWh battery energy storage project in Egypt.

The firm signed a 25-year power-purchase agreement with Egyptian Electricity Transmission Company (EETC) in September last year. The agreement is US dollar-denominated and sovereign guarantee-backed.

The project will be constructed in two phases, according to Scatec.

The first phase comprises a 561MW solar and 100MW/200MWh battery storage project, which is targeted to reach commercial operation in the first half of 2026.

The second phase comprises a 564MW solar project, which is expected to reach commercial operation in the second half of the same year.

The Oslo-headquartered firm has signed equity bridge loans (EBLs) of $120m for the project, postponing the project equity injections to the end of the construction period.

The Arab Energy Fund will provide a $90m EBL with maturity in the second quarter of 2028, while the European Bank for Reconstruction & Development (EBRD) will provide a further $30m EBL maturing in the first quarter of 2027.

Scatec has further signed a mandate letter with a consortium of development finance institutions for the long-term non-recourse project debt at “attractive terms”, with financial close expected in the next few months.

The company is also in advanced discussions with potential equity partners, expected to conclude in the same timeframe, it added.

Total capex for the project is approximately $590m to be partly financed by a targeted 80% non-recourse long-term project debt.

Scatec will deliver engineering, procurement and construction, asset management, and operations and maintenance services for the project.

The firm said its  EPC scope is approximately 70% of total capex, “reduced from previous communication due to optimisation of the EPC structure but with unchanged gross profit to Scatec”.

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Distributed to senior decision-makers in the region and around the world, the May 2025 edition of MEED Business Review includes: