IFC invests in World’s largest solar PV park in Egypt
The International Finance Corporation (IFC), a member of the World Bank Group has approved an investment of US$635 million that will help construct, operate and maintain up to 11 solar power plants in Egypt.
The combined capacity of the plants amount to 500 MW. This will be one of the largest private foreign direct investments in the country’s power sector in recent years.
Part of Egypt's landmark solar Feed-In Tariff (FIT) program, the US$730 million project in Benban, near Aswan, aims to mobilize private investment to build the world's largest solar photovoltaic generation park, harnessing the country’s vast solar resources.
The investment is part of IFC’s broader strategy to create markets that are competitive, sustainable, inclusive, and resilient. This work is central to unlocking private investment, creating jobs, and helping governments reach their development objectives.
This project is also a result of a joint World Bank Group implementation plan in which IBRD, IFC and MIGA work together to respond to a key priority for Egypt’s government. IBRD has supported reforms in the energy sector over the last three years, for example, to enable private sector-led renewable energy development in Egypt.
Egypt’s solar FIT program, which includes projects financed by other institutions like the European Bank for Reconstruction and Development (EBRD) and Proparco, is expected to be one of the largest foreign direct investments (FDIs) in years, catalyzing a total inflow of US$2 billion.
As we reported in mid June, the EBRD approved a US$500 million framework to finance 13 large-scale PV projects, as part of a 16-projects plant of 750MW located near Benban in Upper Egypt.
The program will introduce multiple regional and international investors to the country, as well as a number of new lenders, highlighting Egypt's re-emergence as an attractive investment destination. It will also create a wider base of private capital for future infrastructure investments into Egypt.
Mouayed Makhlouf, IFC Director for the Middle East and North Africa, said:
“This landmark investment demonstrates that when you have the right reform policies, and a government willing to allow greater involvement by the private sector, you can attract investors in every sector, including infrastructure. Investments like these are the nucleus for economic growth, which is needed in Egypt.”
Harry Boyd-Carpenter, Director, Head of Power and Energy at the EBRD, said:
“This is a major milestone in our support for renewable energy in Egypt. We have been working with the Egyptian authorities since 2014 to help them fulfil their ambitious goals in this area. We are delighted now to be in a position to commit very significant financing to projects, which we expect to start construction before the end of 2017. This progress is really a tribute to the Egyptian government’s sustained commitment to making the best use of their abundant solar and wind resources to move to a more diverse and sustainable energy sector.”
We have lately informed about other renewable projects in Egypt:
