The European Bank for Reconstruction and Development ( EBRD ), African Development Bank ( AfDB ) and British International Investment ( BII ) are lending US$479 million for a 1.1-gigawatt solar photovoltaic ( PV ) power plant integrated with a 200-megawatt-hour battery energy storage system ( BESS ) in Egypt’s Nagaa Hammadi region.

The project developer is Obelisk Solar Power SAE, a special-purpose vehicle owned by Norway-based Scatec ASA.

The EBRD will provide a loan of up to US$173.5 million, of which US$101.9 million will benefit from a European Fund for Sustainable Development ( EFSD+ ) first-loss cover guarantee for the first 18 years, in addition to a US$6.5 million grant from the EBRD Shareholder Special Fund.

The AfDB package of US$184.1 million includes US$125.5 million of ordinary resources, as well as concessional funding from AfDB-managed special funds – the Sustainable Energy Fund for Africa, US$20 million; and the Canada-African Development Bank Climate Fund, a partnership between the AfDB and the government of Canada, US$18.6 million. A further US$20 million will be channelled from the Climate Investment Funds‘ Clean Technology Fund through the AfDB.

BII financing includes a US$100 million concessional loan and a US$15 million returnable grant that helps lower the overall cost of the BESS part of the project, making it more financially viable and affordable, while attracting private-sector participation and creating models for future investments. BII’s financing is subject to drawdown conditions. BII is the United Kingdom’s development finance institution and impact investor.

The project’s blended financing of US$479.1 million corresponds to 81% of the total estimated capital expenditure of US$590 million.

Significant milestone

The integrated power plant will be developed by Scatec, and built in two phases. The first phase, with 561MW of solar and 100 MW/200MWh of battery storage, is scheduled to start operations in the first half of 2026. The second phase, with 564MW of solar, aims to start operations in the second half of 2026.

The energy will be sold under a US dollar-denominated, 25-year power purchase agreement with the Egyptian Electricity Transmission Company, backed by a sovereign guarantee.

On completion, it will be the first integrated solar photovoltaic and battery storage project of this scale in Egypt, and a significant milestone in the country’s energy transition.

Egypt aims to reach 42% of renewables in its power mix by 2030. The solar power plant is expected to generate approximately 3,000 GWh per year of additional renewable power, which will enhance grid stability and manage peak demand. It will also reduce carbon dioxide emissions by up to 1.4 million metric tonnes annually.

The facility will support the diversification of Egypt’s energy mix and increase the share of renewable energy, which will contribute to reducing greenhouse gas emissions and advancing the country's decarbonization goals.