Scatec refinances six solar assets in the Benban Solar Park in Egypt

Norway headquartered renewable energy company, Scatec, has announced the conclusion of refinancing on six of its solar power plants in the Benban Solar Park in Egypt. The projects have a total capacity of 380 megawatts (MW), and were refinanced through the issuance of a 19-year USD 334.5 million non-recourse Green Project Bond.

The refinancing will provide increased leverage, extended tenor, and reduced interest costs which will improve Scatec’s and its project partner’s future cash distributions from the power plants.

“This landmark transaction showcases Egypt’s pioneering presence in the green financing market after its inaugural green bond issuance in 2020, which was the first sovereign green bond issuance in the Middle East and North Africa,” said Mohamed Maait, the Minister of Finance in Egypt.

According to Scatec, the project bond received a Climate Bond certificate from the Climate Bond Initiative. The transaction is the first of its kind in Africa and has been distributed to a consortium of development finance institutions, comprising the European Bank for Reconstruction and Development (EBRD), the US International Development Finance Corporation (DFC), the Dutch entrepreneurial development bank FMO and German Investment Corporation DEG, alongside private institutional investors from around the globe.

Multilateral Investment Guarantee Agency (MIGA), a part of the World Bank Group, and EBRD risk mitigation instruments were incorporated into the structure to facilitate distribution to the private sector investors, including major institutions for whom these are first-ever investments in Egypt. 

The credit enhancement structure establishes an efficient precedent for future transactions, including the prospect of an investment grade credit rating for the green bond.

“With this innovative green transaction, we have gained access to the international debt capital markets for project financing, improved our financing terms and supported Egypt’s ambition to become a green hub in the Middle East. Once again, we have demonstrated our ability to find innovative financial solutions and new funding sources to enhance project returns,” says Scatec CFO Mikkel Tørud.