Arab Finance: The European Investment Bank (EIB) is considering financing two renewable energy projects in Egypt with a combined generation capacity of approximately 1.6 gigawatts (GW), according to a disclosure issued by the lender.
One of the projects is being developed by Alcazar Energy, which is building a 500-megawatt wind farm in Ras Ghareb, through the Niat and Rasgha stations.
The project is estimated to cost around $572 million, with Alcazar Energy seeking financing of $152 million from the EIB in addition to funding from other international financial institutions.
The second project is the Dandara solar power plant being developed by Norwegian renewable energy company Scatec in Qena Governorate. The project is expected to have a total capacity of up to 1.1 GW and will be supported by a battery energy storage system.
Unlike conventional renewable energy projects that supply electricity to the national grid, the Dandara project is designed to sell power directly to Egypt Aluminum Company (Egyptalum) under a direct power purchase arrangement.
The project is intended to help the aluminum producer reduce emissions associated with its energy-intensive operations, supporting its competitiveness in export markets and helping mitigate the impact of the European Union's (EU) carbon-related regulations.
The first phase of the Dandara project, with a capacity of 500 MW, is estimated to cost approximately $315 million. While the EIB has not disclosed the potential size of its financing, the European Bank for Reconstruction and Development (EBRD) is considering an $80 million loan for the phase.
The EIB's consideration of both projects comes as Egypt continues to attract investment in renewable energy, supported by growing demand for clean power and increasing interest in direct electricity supply agreements between renewable energy developers and industrial consumers.
Recently, the EBRD announced that it is considering providing up to $200 million in senior loans for the construction and development of two onshore wind power projects in Ras Ghareb, located in Egypt’s Red Sea Governorate, according to disclosures issued by the EBRD.
The proposed financing would be split equally between the NIAT and Rasgha projects, with each project receiving up to $100 million. Both wind farms are planned to have a generation capacity of 250 megawatts, with construction expected to begin by mid-2026.
