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Scatec’s USD 650 mn Naga Hammadi solar project for EgyptAlum secured financial backing from a host of international financial organisations (IFOs), according to a joint statement from the planning and public enterprises ministries. The European Bank for Reconstruction and Development, the African Development Bank, and the European Investment Bank each signed letters of intent to finance the project, with energy produced directed toward the state-owned aluminum producer’s nearby aluminum complex.
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It’s still unknown how much the three IFOs are willing to put down, but the project is expected to 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.
We’re expecting Scatec to soon break ground on the 1 GW solar plant and 200 MWh battery energy storage system, after it inked an agreement with offtaker EgyptAlum to begin implementing the project in July. The project will be executed over 24 months in two 500 MW phases.
This project to power EgyptAlum’s complex comes in preparation for the EU’sCarbonBorder Adjustment Mechanism (CBAM), set to come into effect at the start of next year. Considering that EgyptAlum works in a notoriously energy-intensive sector and exports 60% of its production to Europe, greening production lines now doesn’t just make environmental sense, but economic sense too.
Think you’ve already heard this news? You may be thinking of Scatec’s other Nagaa Hammadi project. The Norwegian renewables player has — confusingly — two 1 GW solar projects in the Nagaa Hammadi area in Upper Egypt, with one of the projects channeling all its output to EgyptAlum and the other sending all electricity to the grid via the Egyptian Electricity Transmission Company (EETC). The project for the EETC — and not EgyptAlum — reached financial close in June.
