Scatec inked a 25-year power purchase agreement with EgyptAlum for its 1.1 GW solar plant and 200 MWh battery energy storage system (BESS) in Naga Hammadi, according to a statement from the Norwegian renewables firm. The Finance Ministry will back EgyptAlum’s financial commitments with Scatec under the newly signed agreement, after the decision was greenlit by the House in January.

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The project to power the state-owned aluminum producer’s aluminum complex has been in the works since at least January of last year and was made official the month after. This comes as EgyptAlum looks to comply with global sustainability and manufacturing standards to meet the EU’s Carbon Border Adjustment Mechanism (CBAM) rules, which will come into effect in 2026. EgyptAlum exports 60% of its production to Europe.

The renewables player is hoping to break ground in the next 12 months, after reaching financial close for the project. In the meantime, Scatec will work with the authorities to secure land for the project, finalize how it will connect to the grid, and work on securing financing.

The project is expected to cost USD 650 mn — up slightly from original estimates of USD 600 mn — which will be 80% financed through non-recourse project debt, with the remainder to be covered by equity from Scatec and partners. Scatec will be the sole owner initially, but it is planning on offloading some stakes to other equity investors in the long-run.

SCATEC’S RENEWABLE PROJECTS JOIN NWFE-

Scatec projects are now under the NWFE umbrella: Planning and International Cooperation Minister Rania Al Mashat has inked a framework agreement with Scatec CEO Terje Pilskog to include the Norwegian player’s renewable energy projects portfolio in Egypt in the government’s Nexus for Food, Water, and Energy initiative (NWFE), according to a statement.

What does this mean for us? The inclusion of new Scatec projects in the NWFE initiative is expected to facilitate access to blended financing from multilateral and bilateral development partners, helping drive more green investments in Egypt, according to Al Mashat.

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