Orascom Construction’s consortium financially closes 500-MW Gulf of Suez 2 Wind Farm
Updated 4/3/2023 9:10:00 AM
Arab Finance: The Red Sea Wind Energy, owned by the consortium comprised Orascom Construction PLC, ENGIE, Toyota Tsusho Corporation, and Energy Holdings Corporation, achieved financial close of the new 500-megawatt Gulf of Suez Wind Farm near Ras Ghareb, Egypt, according to an emailed press release.
The wind farm will be operated and maintained by the consortium under a 25-year Power Purchase Agreement (PPA) with the Egyptian Electricity Transmission Company (EETC), with EETC’s obligations being backed by the Egyptian Ministry of Finance under the PPA.
The plant will be linked to the national grid over two phases with full commercial operation scheduled in the third quarter (Q3) of 2025.
Red Sea Wind Energy will build, own, and operate the wind farm, with Orascom Construction to handle the construction of the civil and electrical works.
It is worth noting that Red Sea Wind Energy is 35% owned by ENGIE, while Orascom Construction, Toyota Tsusho Corporation, and Eurus Energy Holdings Corporation hold stakes of 25%, 20%, and 20%, respectively.
The $680 million project will help providing clean power to more than 800,000 Egyptian homes, while accelerating Egypt's transition to renewable power generation and contributing to CO2 emissions reduction by approximately 1 million tons annually.
This project comes under the energy pillar of the Nexus of Water, Food, and Energy (NWFE) program.
“Non-recourse project financing is provided by the Japan Bank for International Corporation (JBIC) in coordination with Sumitomo Mitsui Banking Corporation, the Norinchukin Bank, and Société Générale S.A. under a Nippon Export and Investment Insurance (NEXI) cover, and the European Bank for Reconstruction and Development (EBRD),” according to the release.
Meanwhile, HSBC Bank Egypt is serving as working capital bank and Onshore Security Agent.
This new 500-MW wind farm project builds on the consortium’s previous success in developing Egypt's first renewable energy Independent Power Producer (IPP) project of its kind and size, tripling the developer consortium’s wind energy capacity in Egypt to 762.5 MW.
Moreover, this project marks the first co-financing between JBIC and the EBRD since the signing of a memorandum of understanding (MOU) in October 2022 to boost cooperation between the two organizations, and the first joint project between NEXI and the EBRD since the signing of an MOU in October 2020.
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