Engie consortium achieves financial close for 500MW Egypt wind farm
The Red Sea Wind Energy Consortium has announced the financial close, a significant milestone on the new 500 MW Gulf of Suez Wind Farm near Ras Ghareb, Egypt.
The consortium, which is majority owned by French multinational utility group Engie with a 35% stake, has Orascom Construction (25%), Toyota Tsusho Corporation (20%) and Eurus Energy Holdings Corporation (20%) as its members.
As per the agreement, the consortium will operate and maintain the wind farm under a 25-year power purchase agreement (PPA) with the Egyptian Electricity Transmission Company (EETC).
The plant will be connected to the grid over two phases with full commercial operation planned in Q3 2025. EETC’s obligations under the PPA are backed by Egypt’s Ministry of Finance, it stated.
This new 500 MW wind farm project builds on the past success achieved by the consortium in developing Egypt's first renewable energy Independent Power Producer (IPP) project of its kind and size (completed in October 2019 ahead of schedule), and tripples the developer consortium’s wind energy capacity in Egypt to 762.5 MW.
It will be built, owned and operated by Red Sea Wind Energy, while Orascom Construction will execute the construction of the civil and electrical works of the wind farm.
The project falls under the energy pillar of the Nexus of Water-Food-Energy (NWFE) program, an initiative the Government of Egypt presented at COP 27 in November 2022 that is expected to contribute toward the energy transition.
On the key project, Engie Managing Director Renewables AMEA & South Africa Country Manager Mo Hoosen, said: "We are delighted to be replicating the same partnerships as it has with the 262.5MW Ras Ghareb wind farm for the Gulf of Suez 2 which once completed in 2025 will be one of the largest onshore wind facility in ENGIE’s portfolio."
"We want to showcase Engie’s commitment to supporting the Egyptian government’s ambitions to transition to a lower carbon economy," he stated.
The project will be capable of delivering clean power to more than 800,000 Egyptian homes. The project also helps accelerate Egypt's transition to renewable power generation and will reduce CO2 emissions by approximately 1 million tonne annually.
Non-recourse project financing is provided by the Japan Bank for International Corporation (JBIC) in coordination with Sumitomo Mitsui Banking Corporation, the Norinchukin Bank, and Société Générale S.A. under a Nippon Export and Investment Insurance (NEXI) cover, and the European Bank for Reconstruction and Development (EBRD). HSBC Bank Egypt S.A.E. is acting as working capital bank and Onshore Security Agent.
This project marks the first co-financing between JBIC and the EBRD since the signing of an MOU in October 2022 to fortify cooperation between the two organizations, and the first joint project between NEXI and the EBRD since the signing of an MOU in October 2020.
Orascom Construction Executive Director (Concessions) Khaled El Degwy said: "This project marks the joint efforts of our consortium, a strong group of international financial institutions, export agencies and commercial banks, and EETC and NREA to deliver an important project that helps accelerate the transformation of the renewable energy sector in Egypt."