EIB considers backing Alcazar’s Ras Ghareb, Scatec’s Dandara projects

The European Investment Bank (EIB) is currently weighing financing for two major renewable energy projects in the country that will add a combined 1.6 GW of clean power to the national grid, according to project disclosures published by the bank.

Project #1: Dubai-based Alcazar Energy is building two adjacent 250 MW onshore wind farms — NIAT and Rasgha — near Ras Ghareb on the Red Sea. The total development price tag is USD 572 mn and Alcazar asked the EIB for a USD 152 mn loan to help cover the costs. The developer is currently hunting for the rest of the debt from other multilateral lenders, with the European Bank for Reconstruction and Development (EBRD) also evaluating a USD 200 mn loan for the complex.

Project #2: EIB is appraising a project from Norwegian renewables giant Scatec, which is building a 1.1 GW solar plant, called Dandara, alongside a massive battery storage system in Qena. Instead of linking Dandara’s output to the national grid, Scatec will sell it to the state-owned aluminum giant EgyptAlum to help the energy-heavy manufacturer lower its carbon footprint and avoid the EU’s incoming carbon border tax. The first 500 MW phase of Dandara will cost USD 315 mn. While the EIB has not disclosed how much it plans to lend the project, the EBRD is evaluating a USD 80 mn loan for this initial phase.

But don’t confuse this with Scatec’s other Qena project, Obelisk, which sells power directly to the government and already has its first phase up and running.

Why it matters: EIB’s interest in these two projects suggests that multilateral financial institutions continue to see a compelling commercial prospect in large-scale renewable energy projects in Egypt. They also reflect the broadening of the country’s green energy market beyond traditional utility-backed projects, with developers increasingly targeting both utility-scale power generation and direct power supply agreements with industrial consumers.