NWFE First Progress Report: $2 Bln Facilities for Private Sector within Energy Pillar

● Signing agreements for renewable energy projects with a capacity of 3.7 GWs, including 1.8 GWs for which financial closing agreements were signed.

The first follow-up progress report of the NWFE program was issued by the Ministry of International Cooperation on the occasion of the one-year anniversary of the launch of the program. The NWFE program -the nexus between water, food and energy projects- as well as the “NWFE+” program for sustainable transport projects, coinciding with the holding of the high-level round table, with H.E. the Prime Minister Dr. Mostafa Madbouly, relevant ministries, multilateral and bilateral development partners, and representatives of the private sector about the program.

The report revealed that the total investment facilities for the private sector that were provided by multilateral and bilateral development partners for the energy pillar within the NWFE program amounted to about $2 billion, for projects in the renewable energy sector, whether solar energy or wind energy, which enhances the country’s efforts to increase the mix of renewable energy in total energy generation by about 42% by 2030 instead of 2035, according to the NDCs updated in June this year, based on the joint political declaration between Egypt, the United States and Germany that was announced during COP27.

The report indicated that the cooperation and coordination efforts that took place at the national and international levels during the first year of the NWFE program resulted in the provision of financing to the private sector worth $2 billion dollars, and contributed to the signing of the financial closure agreement for the project to establish the “Amont” station, in the Ras Gharib region in the Red Sea Governorate. To produce electricity from wind energy with a capacity of 500 MW, financed by the International Finance Corporation (IFC), the Japan Bank for International Cooperation (JBIC), Standard Chartered Bank (a member of the GFANZ Alliance), Sumitomo Mitsui Banking Corporation (SMTB), where commercial operation is expected to begin in May 2025.

The financial closing agreement was also signed for the project to establish the “Abydos” station to produce electricity from solar energy with a capacity of 500 MWs in the city of Kom Ombo in Aswan, funded by the IFC, the FMO: Dutch Entrepreneurial Development Bank, and the Japan International Cooperation Agency (JICA) where commercial operation is expected to begin in July 2024.

In addition to the signing of the financial closing agreement for the project to establish a new wind farm in the Gulf of Suez 2 region with a capacity of 504 MW between the Red Sea Wind Energy Alliance -an alliance of Orascom Construction of Egypt, Engie of France and Toyota of Japan-, the JBIC, and the European Bank for Reconstruction and Development (EBRD) where commercial operation is expected to begin in February 2025.

As well as the signing of the financial closing agreement for the Kom Ombo photovoltaic solar power station project with a capacity of 200 MW. The total investment cost of the project amounted to $182 million, funded by the EBRD, the OPEC Fund for International Development, the African Development Bank (AfDB), the Sustainable Energy Fund for Africa of the African Development Bank, the Green Climate Fund, the Arab Petroleum Investments Corporation (APICORP), and the Arab Bank where commercial operation of the Kom Ombo station are expected to start by January 2024.

The report explained that renewable energy projects with a capacity of 3.7 GWs (out of 10 GWs) have been contracted between the Ministry of Electricity and Renewable Energy and private sector companies such as ACWA Power, Masdar, Al Nowais, Orascom and others. Also, the efforts of the Ministry of International Cooperation continue in coordination with the Ministry of Electricity and Renewable Energy and development partners, especially the main development partner, the EBRD, in mobilizing concessional development financing and innovative financing tools to implement the energy pillar within the programme.

The energy pillar aims to shut down 12 thermal power plants with a capacity of 5 GWs, and stimulate investments worth $10 billion to launch renewable energy projects with a capacity of 10 GWs during the period from 2023 to 2028, in close partnership with the local and foreign private sector.

During COP27, the partnership agreement on the energy pillar was signed with the EBRD, the European Investment Bank (EIB), the AFD, the African Development Bank (AfDB), the Asian Infrastructure Investment Bank (AIIB), the United Kingdom, Denmark, and the Netherlands.

The Ministry of International Cooperation explained, in its statement, that the energy pillar projects enhance the achievement of the goals of Egypt’s Climate Change Strategy to reach sustainable economic growth, implement NDCs, and reduce approximately 17 million tons of carbon dioxide emissions annually that results from the closure of stations that operate using thermal energy and replacing it with renewable energy plants, saving $1.2 billion annually that was originally spent on providing the fuel necessary to operate these plants.