Alcazar locks in USD 420 mn deal to manage Gabal El Zeit

It’s official: Alcazar has taken over Gabal El Zeit. UAE-based Alcazar Energy has inked a USD 420 mn agreement to operate, manage, maintain, and upgrade the 580 MW Gabal El Zeit wind farm, according to a Cabinet statement.

Upgrades are coming: Under the agreement with with the New and Renewable Energy Authority, Alcazar will handle all renovation and efficiency upgrades to boost production capacity, maintaining a minimum output of 580 MW. The Egyptian Electricity Transmission Company will off-take all energy generated throughout the duration of the contract under a power purchase agreement inked between the two sides.

One big step for our privatization ambitions: The transaction gives a big boost toward reaching our privatization targets for the coming few years and keeps the privatization wheel spinning after sources told us that the long-awaited Banque du Caire IPO has been pushed back yet again.

While the statement announcing the agreement was light on details, we were previously told that the cost of electricity produced by Alcazar will be denominated in USD but settled in EGP at the prevailing exchange rate — a move that will shield the developer from currency volatility.

Better late than never: We first caught wind of the takeover in February, when a government source told EnterpriseAM that the acquisition would wrap up later that month at a price exceeding USD 420 mn. Weeks later, we were told that the acquisition would be finalized in March.