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Egypt’s Red Sea Wind Energy signed a loan agreement with Japan Bank for International Cooperation (JBIC) for $51 million as part of project financing for a wind farm project.
European Bank for Reconstruction and Development (EBRD), Sumitomo Mitsui Banking Corporation, the Norinchukin Bank, and Société Générale S.A. are co-financing the project, bringing the total amount to $106 million.
Red Sea Wind Energy S.A.E is owned by a consortium of Engie (35%), Orascom Construction (25%), Toyota Tsusho Corporation (20%) and Eurus Energy Holdings Corporation (20%).
Nippon Export and Investment Insurance will provide 100% political and 97.5% commercial risk coverage to the $35 million 21-year commercial portion of the project.
Red Sea Wind Energy, which is developing a 500 megawatt (MW) onshore wind farm in Ras Ghareb in the Gulf of Suez, 200 km southeast of Cairo, will use the loan to increase the capacity by 150MW.
Red Sea Wind Energy has signed a 25-year power purchase agreement (PPA) with state-owned Egyptian Electricity Transmission Company, and the government has issued a guarantee for the PPA.
In March last year, Red Sea Wind Energy signed a $501 million loan for the initial phase of the project. JBIC loaned $240 million, while the EBRD, Norinchukin, SocGen and SMBC provided the remainder.
The Egyptian government has pledged to increase the share of renewables in the national energy mix to 42% by 2030. However, last month it revised its renewable energy target for 2040 down to 40% from a previous goal of 58%.
(Writing by Brinda Darasha; editing by Seban Scaria)
