The Multilateral Investment Guarantee Agency (Miga) has provided backing to Egypt’s renewable energy sector by insuring six solar power plants in the country.

Miga, a member of the World Bank Group, has issued US$52.35mn in guarantees to Norwegian firm Scatec Solar to support the operation and maintenance of the facilities at the Benban Solar Park.

Under the terms of the agreement, 90% of Scatec’s equity investments in the project will be covered against the risk of currency inconvertibility and transfer restriction for up to 15 years.

Speaking about the deal, CEO of Scatec Solar, Raymond Carlsen says: “The Miga guarantees are a cost-efficient way of mitigating risk for our largest project in the portfolio.”

With a combined capacity of 390MW, these six plants are the biggest source of power at the Benban Solar Park, which has had all 32 plots in operation since October 2019.

Dubbed the biggest solar park in Africa by the International Finance Corporation (IFC), which has been heavily involved in financing the solar park, the Benban complex is reportedly capable of providing renewable energy to more than 1,000,000 homes.

The latest Miga financing has been provided as part of the Feed-in-Tariff (FiT) Program, an Egyptian government initiative that seeks to attract direct foreign investment and financing for Egyptian photovoltaic (PV) and wind projects.

Having initially been launched in 2014, FiT stuttered to life with various development finance institutions (DFIs) withdrawing support for the first-phase of the FiT in 2016 over concerns about some of the clauses within the power purchase agreement (PPA).

However 2017 saw a resurgence in DFI support, with the likes of the European Bank for Reconstruction and Development (EBRD) and other DFIs signing financial agreements backing various solar power plants within Benban.

One deal struck that year provided Scatec Solar with the financing to produce the six plants for the 390MW project.

The firm received US$335mn from the EBRD, the Green Climate Fund (GCF), the Islamic Development Bank (IsDB), the Islamic Corporation for the Development of the Private Sector (ICD) and the Dutch development bank FMO.

Benban is part of Egypt’s plans to drastically increase its renewable energy share, with the country aiming to increase its renewable energy capacity to 20% by 2022 and 42% by 2035. In 2017 it stood at just 8%.

The North African nation is also working to provide enough power for its growing population, with Miga commenting that “the plants will ultimately enhance Egypt’s ability to manage planned and forced outages, as well as to pursue its aspiration to export electricity”.