EBRD and EU support two wind farms in Egypt

• EBRD lends up to US$ 145 million to two special-purpose vehicles owned by Alcazar Energy Partners II
• Investment will add 500 MW of renewable energy capacity to national grid and strengthen Egypt’s energy security
• EU support through EFSD+ HI-BAR guarantee will lower costs and mitigate risk

The European Bank for Reconstruction and Development (EBRD) is boosting renewable energy production in Egypt and strengthening the country’s energy security.

By providing a financing package of up to US$ 145 million (€129.5 million), the Bank is supporting the development, construction and operation of two wind farms with a combined capacity of 500 MW, which are expected to reduce annual greenhouse gas emissions by a total of around 979,700 tonnes of CO2 equivalent. The package comprises two loans of up to US$ 75 million (€67.0 million) and up to US$ 70 million (€62.5 million) to Niat for Wind Energy and Alcazar Rasgha Energy, respectively – both special-purpose vehicles owned by Alcazar Energy Partners II, a clean energy investment fund.

The new wind farms are being co-financed by the European Investment Bank (EIB) and the German development finance institution Deutsche Investitions- und Entwicklungsgesellschaft (DEG).

The wind farms form part of Egypt's efforts to address energy shortages, reduce dependence on imported fossil fuels and accelerate the deployment of renewable energy. They will help to unlock private-sector investment in renewable energy generation and build a more resilient power sector.

The financing will benefit from first-loss risk cover provided by the European Union (EU) under the European Fund for Sustainable Development Plus (EFSD+) HI-BAR programme. The project will make a concrete contribution to the EU-Egypt Strategic and Comprehensive Partnership, which identifies renewable energy, energy security and sustainable investment as key areas for deeper cooperation. It will also support the ambitions of the Pact for the Mediterranean, including through its Trans-Mediterranean Renewable Energy and Clean-Tech Cooperation Initiative (T-MED), aiming to mobilise investment in clean energy, strengthen competitiveness and create economic opportunities across the Mediterranean.

the EBRD’s Sustainable Infrastructure Group, said: “Reliable and affordable energy is essential for economic growth and competitiveness. By supporting our longstanding partner Alcazar Energy as it develops these wind farms, we are helping to strengthen Egypt’s energy security, attract private investment, lower energy costs and support the country’s long-term renewable energy ambitions. This agreement also demonstrates the power of cooperation between development finance institutions and the European Union in mobilising investment at scale.”

Angelina Eichhorst, EU Ambassador to Egypt, said: “Europe and Egypt are bound by more than geography: we share a horizon. Through the EU guarantee, and through T-MED, our flagship initiative for clean energy across the Mediterranean, we are turning that shared horizon into something tangible: 500 MW of new wind capacity, cleaner skies and a more secure energy future for Egypt. This is what the Strategic and Comprehensive Partnership, the Pact for the Mediterranean and T-MED are about: mobilising investments that deliver real benefit for Egypt, while weaving our two shores ever closer together in a shared Mediterranean energy future.”

The agreement will also facilitate greater diversification in Egypt’s renewable energy supply chain through the return of Siemens Gamesa Renewable Energy to the Egyptian market as a turbine supplier and operations and maintenance contractor. By broadening the pool of suppliers and contractors, it will enhance competition and contribute to a more resilient renewable energy sector.

The EBRD is a leading institutional investor in Egypt, having invested more than €16 billion through 238 projects in the country to date. Most of this investment has gone to the private sector.