Egypt Aluminium sign landmark 1.1 GW solar PPA with Scatec

Scatec ASA, a Norwegian renewable energy developer, has entered into a 25-year power purchase agreement (PPA) with Egypt Aluminium for a 1.1 GW solar power plant, which includes 100 MW/200 MWh of battery energy storage. This deal marks Egypt’s first utility-scale PPA involving an industrial offtaker.

The renewable energy deal by Scatec and Egypt Aluminum, the nation’s largest aluminum producer and industrial electricity consumer, is backed by a sovereign guarantee.

This solar PV + BESS project is expected to be instrumental for Egypt Aluminium’s ambition to decarbonise its aluminium production, and to meet EU’s Carbon Border Adjustment Mechanism (CBAM) requirements which will be introduced in 2026. The company exports 60% of its output to Europe.

“This is another testament to Scatec’s position as one of the leading renewables companies in Egypt. It is a groundbreaking project as it is the first utility scale PPA in the country with an industrial offtaker,” said Scatec CEO Terje Pilskog.

“I would like to thank all parties involved for making this happen, especially our partners at Egypt Aluminium. Further, our team has shown great persistence and creativity in securing this agreement and bringing new solutions to the market,” concluded Pilskog.

Scatec to invite equity partners for the solar power plant

The estimated total capital expenditure for the solar PV + BESS project is approximately USD 650 million which will be funded by approximately 80% non-recourse project debt, and the remainder by equity from Scatec and partners. 

Additionally, Scatec will own 100% of the solar power plant but is targeting to reduce its long-term economic interest by inviting additional equity partners. Scatec will be the designated EPC service provider, with an EPC share of approximately 90% of total capex, as well as asset manager (AM) and operations and maintenance (O&M) service provider.