EBRD pumps money into Egyptian renewables
The European Bank for Reconstruction and Development (EBRD) has made a number of recent commitments to Egyptian renewable energy, partnering with the Green Climate Fund (GCF) and French development financier Proparco in doing so.
It has teamed up with the GCF to provide US$1bn in funding: US$352.3mn from EBRD, US$154.7mn from GCF (the largest contribution since it began full-scale operations), and the remainder from sponsors and other co-financiers.
This funding supports the Egyptian government’s sustainable energy strategy, which aims to source 20% of Egypt’s energy from low-emission renewable sources by 2022. The financing will allow independent power producers to invest in the first wave of private renewable energy production in the country.
Funding for this initiative is expected to start flowing in September following the signing of a funded activity agreement (FAA) between GCF and the EBRD this month.
GCF executive director Howard Bamsey says the agreement marks a benchmark in the way the fund can work with its partners to pool financial resources to boost countries’ mitigation and adaptation capacities.
“This FAA is just the beginning of the potential GCF and the EBRD have in combining their financial forces to drive climate action across various parts of the planet,” he says.
The GCF board has already approved three other projects proposed by the EBRD. These include a hydropower project in Tajikistan, a water conservation project in Morocco and a sustainable energy project covering 10 countries.
EBRD president Suma Chakrabarti says: “Climate finance is crucial to the EBRD’s strategy. We are aiming to dedicate 40% of our annual investments to the green economy by 2020.”
With Proparco, the EBRD will provide US$116mn (US$58mn each), to finance the construction and operation of two 50MW solar photovoltaic power plants in the country, part of the 1.8GW Benban solar complex planned in the Aswan province in south Egypt.
These are the first two projects to be funded under the second round of Egypt’s feed-in tariff scheme. They are also the first to be signed under EBRD’s US$500mn framework for renewable energy in Egypt, which was approved by the bank’s boards two months ago, and which is expected to finance a total of 16 projects in the country.take me back