The International Finance Corporation (IFC), which is part of the World Bank Group, has invested in a $25m equity stake in Dubai-based Alcazar Energy, formerly Gaia Energy.

The developer hopes to raise $130m from additional equity investments.

“MENA’s solar potential alone is massive,” says Maroun Semaan, co-founder and chairman of Alcazar Energy. “Enough solar energy hits the region every year to satisfy the planet’s demand for power. The investment from IFC will help tap into that potential and boost power generation across the region at more competitive costs.”

The company’s first project will be a small-scale solar plant.

Alcazar has prequalified to develop a 20MW - 50MW wind project under Egypt’s feed-in tariff scheme. Developers are in the process of securing plots of land for their projects, while power purchase agreements are still under discussion.

The investment is part of IFC’s wider regional strategy to improve the regions infrastructure, especially in the power and renewable energy sectors. It also aims to foster regional integration by helping local companies expand across the region.

According to studies cited by the IFC, the electricity demand across in the Middle East and North Africa will grow 84 per cent by 2020. Renewable energy projects will assist in bridging this gap. It is estimated that around $280 billion of investment will be needed required in over the next five years to meet this demand.

The IFC has also extended a $91.5m loan to seven solar projects in Jordan, under the country’s feed-in tariff scheme.

The IFC was advised by New York-based law firm White & Case, while Alcazar Energy was advised by Texas-based Bracewell & Giuliani.