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Egypt Secures $210 million Loan to Finance Solar Power Projects

5 September, 2017
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Egypt will soon receive a loan worth $210 million that was approved by the Asian Infrastructure Investment Bank (AIIB) with the goal of supporting the country’s projects in renewable energy.

The loan will assist Egypt with increasing its reliance on renewable energy sources while decreasing dependency on gas and fuel, which the country committed to when agreeing to the terms of the Paris Climate Agreement.

According to an AIIB statement, the projects to be funded consists of 11 greenfield solar power plants with an aggregate capacity of 490 MW. The loan will be provided through a consortium of lenders, which includes the International Financial Corporation (IFC).

The projects will be developed as part of the second round of Egypt's Solar PV feed-in tariff program, all of which will be located in the 1.8 GW Benban solar power complex in Aswan.

"We are supporting this project because it contributes to Egypt's renewable energy capacity, and it will help position the country as a regional energy hub, which will have economic benefits for the entire region," said D.J. Pandian, AIIB's vice president and chief investment officer.

AIIB, which is headquartered in Beijing, said that the solar plants would help the environment by avoiding “over half a million tons of CO2 annually”.

The project will also allow Egypt to increase its generation capacity so it can export energy during peak hours and improve its connectivity in the Middle East, Asia, Europe and Africa, according to the AIIB statement.

The AIIB first opened in January 2016 and has since approved loans worth $3.04 billion for 28 projects in countries such as Azerbaijan, India and Pakistan, according to the gbtimes.

Egypt was included as a member of the AIIB during the second annual meeting in June along with 79 other countries, including Sudan, Ethiopia and South Africa. China is the bank’s largest stakeholder, followed by India, Russia, Germany and South Korea.

Egypt has stated that by 2022 the country will rely on renewable energy as 20% of its energy consumption.

In August, Saudi Arabian energy company Acwa Power secured a contract to develop three solar power projects in Egypt at cost of $190 million. Egyptian partners Tawakol and Hassan Allam Holding will assist Acwa with building the solar photovoltaic plants totalling 165.5 megawatts in Benban and also as part of the government’s second round of the feed-in tariff program. 

Tags Egypt Asian Infrastructure Investment Bank Renewable energy Environment solar power Benban Aswan