EBRD invests in Scatec green bond

By Nibal Zgheib

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The European Bank for Reconstruction and Development (EBRD) is reinforcing its position as a leader in green finance with an ambitious plan to broaden and deepen its climate activities and become a majority green bank by 2025.

Benban solar park, Egypt. 

  • EBRD investment of up to US$ 100 million in a certified green bond issuance in favour of Scatec ASA
  • US$ 30 million Credit Enhancement Facility
  • First private green project bond issuance in Egypt and the SEMED region

The European Bank for Reconstruction and Development (EBRD) is investing up to US$ 100 million in a certified green bond issuance of US$ 334.5 million, backed by six solar power plants owned by Scatec ASA.

The Bank is also providing a US$ 30 million Credit Enhancement Facility (CEF) for participating institutional investors.

Certified under the Climate Bonds Standard, this bond is the first private green project bond issuance in Egypt and the southern and eastern Mediterranean region.

The issuance will have a catalytic effect on renewable energy investors seeking access to capital markets in a volatile post-pandemic macroeconomic environment, allowing them to source funding from the growing pool of international institutional investors.

The issuance is co-financed by the EBRD, the US International Development Finance Corporation (DFC), FMO Entrepreneurial Development Bank, the German Development Finance Institution (DEG) and private institutional investors.

The CEF, alongside the Multilateral Investment Guarantee Agency (MIGA) Political Risk Insurance cover, is an innovative instrument, which will draw a new class of international institutional investors into Egypt’s renewable energy sector, thus paving the way for greener bond issuances in the future.

In addition, the EBRD will support the regional economic development of the Aswan governorate in the country. The Bank will work on increasing access to skills and economic opportunities for people in the less developed rural areas near Benban Solar Park, by introducing a certified training programme for agribusiness entrepreneurs, with a specific focus on youth and women.

Nandita Parshad, EBRD Managing Director, Sustainable Infrastructure Group, said: “We are delighted to continue our support of Egypt’s renewable energy sector and to mobilise new private and institutional capital through this highly innovative and timely instrument.”

Mikkel Tørud, the CFO of Scatec, said: “We are thrilled to be part of this innovative green financial transaction which has attracted capital from both development financial institutions and international institutional investors. This transaction demonstrates strong support for the Egyptian government’s ambitions to become a green hub in the Middle East.”

Scatec ASA -- a Norway-based integrated independent solar power producer -- develops, builds, owns and operates renewable power plants, with 3.5 GW in operation and under construction around the world.

Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the EBRD has invested more than €8.5 billion in 144 projects in the country.

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