EBRD lends $63 million to Scatec's Dandara solar and storage plant
Three lenders provide $217 million of project debt, about 80 per cent of the first phase's cost, and National Bank of Egypt takes a 20 per cent stake.
Written with AI tools by Boards and Capital's editorial system; the publisher is responsible for it. How this site works
The European Bank for Reconstruction and Development is lending $63 million, or €54.7 million, to Dandara Solar Power for a solar plant with battery storage in southern Egypt that will supply one of the country's largest industrial producers, the bank said on 29 October.
The loan is part of the project debt for the first phase. Scatec, the Norwegian developer and main sponsor, said on 28 October that it had signed loan agreements for that phase and was starting construction. The non-recourse financing totals $217 million from the EBRD, the African Development Bank and the European Investment Bank, about 80 per cent of the first phase's estimated capital cost of $271 million, Scatec said.
Who owns the project now
Scatec also signed a partnership agreement with National Bank of Egypt, which joins with a 20 per cent stake. After that deal and the EBRD's agreement to buy 40 per cent of Scatec's Egyptian renewables platform, Scatec holds 56 per cent of Dandara: 36 per cent through the platform and 20 per cent outside it, the company said. It intends to bring in further equity partners and to take equity bridge loans, so that its own equity can be paid in at the end of construction.
Scatec will act as engineering, procurement and construction contractor, asset manager and operator. Its construction scope is about 80 per cent of total capital cost, and commercial operation of the first phase is targeted for the first half of 2028, with construction of a second phase expected to start in the first half of 2027, the company said.
What the plant will supply
The two releases describe the plant differently. The EBRD puts it at 500 MW of solar photovoltaic capacity combined with a 100 MWh battery system in the Nagaa Hammadi region, generating about 1.47 TWh a year and cutting carbon dioxide emissions by nearly 732,000 tonnes a year. Scatec describes a 569 MW solar plant with a 100 MWh battery, about 1.4 TWh a year and abatement of more than 550,000 tonnes. Neither release explains the difference.
Both say the power goes to the aluminium maker, which Scatec calls Egypt Aluminium and the EBRD calls Misr Aluminium Company (EgyptAlum), under a 25-year purchase agreement; Scatec adds that the agreement is backed by a sovereign guarantee, and the EBRD that the electricity will be delivered through the national transmission network. Scatec said the power will help the aluminium maker reduce its carbon footprint and meet evolving trade-related environmental standards.
The EBRD's package includes $10 million of concessional finance from the Climate Investment Funds and $7 million from Canada through the bank's High-Impact Partnership on Climate Action. The project was developed under the energy pillar of Egypt's Nexus of Water, Food and Energy programme, which the EBRD leads, and is co-financed by the African Development Bank and the European Investment Bank. A training programme in Qena governorate is to give at least 100 people green and digital skills, with women expected to make up at least 25 per cent, and Scatec will offer up to five internships a year to graduates.
The other lenders
The African Development Bank approved up to $66 million for the first phase in July, $46 million from its own resources and $20 million from the Clean Technology Fund, Ecofin Agency reported, citing the bank's statement of 13 July. Neither the EBRD nor Scatec gives the European Investment Bank's share, or the tenor and pricing of the loans.
"Expanding renewable energy capacity is critical to strengthening Egypt's energy security and supporting long-term economic growth," said Harry Boyd-Carpenter, the EBRD's managing director for sustainable infrastructure. The bank has invested €16.1 billion in Egypt since it began operating there in 2012. Terje Pilskog, Scatec's chief executive, called Dandara "another major milestone in Scatec's journey in Egypt" and said the company was bringing the integrated model it used at Obelisk, which it described as Africa's largest hybrid solar and battery installation, to industrial decarbonisation.
The loans follow the EBRD's agreement to take 40 per cent of Scatec's Egyptian platform for up to $221 million, which named Dandara among its assets. They were signed in the week the Central Bank of Egypt raised its key rates by 100 basis points.