A consortium led by French energy giant, ENGIE, has concluded a deal with Egypt’s Electricity Ministry and the Egyptian Electricity Transmission Company (EETC) to develop, construct and operate a 500 MW wind farm in Ras Ghareb, Egypt. The consortium includes Egypt-based Orascom Construction plc, and Japan’s Toyota Tsusho Corporation.
The signing ceremony took place this Wednesday with attendance by Egypt’s Prime Minister, Mostafa Maboduli, Electricity Minister Mohamed Shaker, Japanese Ambassador to Egypt Masaki Noke and France’s deputy ambassador to Egypt.
The ENGIE led consortium will develop the wind energy plant under the build-own-operate model. The mega wind energy facility will be Africa’s largest upon completion and will sell power to the Egyptian Electricity Transmission Company (EETC) through a long-term power purchase agreement (PPA).
The companies involved in the deal formed a special purpose vehicle (SPV) for the implementation of the project called Red Sea Wind Energy Company. Cairo based Orascom Construction plc will have a 25% stake in the SPV whilst ENGIE will have the majority stake of 35%. Two Japanese companies, Toyota Tsusho Corporation & Eurus Energy Holdings Corporation will collectively hold 40% shareholding.
The project is expected to be financed by the Japan Bank for International Cooperation (JBIC), the European Bank for Construction and Development (EBRD), and Société Générale, Sumitomo Mitsui Banking Corporation and Norinchukin Bank under a commercial and political risk cover from Nippon Export and Investment Insurance (NEXI). A local working facility will be provided by HSBC.
According to Egypt’s electricity minister, the project is estimated to cost around 600 million dollars to construct and it is expected to become operational in 2024.
Siemens Gamesa Renewable Energy (SGRE) was selected to supply 173 turbines at 2,9MW each for the project. The parties are also looking to enter into a 15-year Long Term Service Agreement (LTSA) with Siemens Gamesa Renewable Energy.
