The European Bank for Reconstruction and Development (EBRD) will support the Egyptian Electricity Transmission Company (EETC) with $183 million to finance the modernization of the electricity grid by injecting renewable energy and strengthen the transmission network in the country.
The EBRD funds will facilitate the integration of 1.3 GW of new renewable energy into the Egyptian electricity system by connecting new renewable energy plants, with the help of new or refurbished high-voltage substations. In addition, the investment will help in reducing electricity losses, thus saving 77,000 tons of CO2 emissions per year.
Egypt is facing the challenge of rising electricity demand over the coming 10 years due to economic growth.
According to EBRD, the money will be used not only to modernize the electricity grid, but above all to strengthen it through the construction of new substations that will allow the integration of new energy sources.
The project is fully developed by independent power producers (IPPs). This is the case of the Norwegian Scatec Solar and the French EDF Renouvelables, a subsidiary of the giant Électricité de France (EDF).
Egypt aims to source 20% of its electricity from renewables by 2022 – and 42% by 2035 – in line with legislation introduced in 2015.
International Renewable Energy Agency figures stated the country had just 750 MW of solar generation capacity at the end of last year but the government is rapidly bringing large amounts of new PV capacity online – most notably at the massive Benban solar complex.
The World Bank has been one of the supporters of reforms to the Egyptian energy sector. It provided a $3 billion loan to help with that undertaking and provide the framework and financing for the Benban project.
Its International Finance Corporation (IFC) division, along with a consortium of other lenders, pledged $653 million and the Multilateral Investment and Guarantee Agency (MIGA), another part of the World Bank Group, is providing $210 million worth of “political risk insurance” to private lenders and investors.