COUNTRY | Egypt
REGION | Africa
SECTOR | energy
QII Principles | Principle 1 Sustainable Growth & Development, Principle 3 Environmental Considerations, Principle 5 Social Considerations, Principle 6 Infrastructure Governance
QII Sub-Principles | 1: SDGs, 1: Paris Agreement, 2: Operation and maintenance, 2: Technological innovation, 3: Environmental Impact Assessment, 3: Environmental Impact Mitigation, 3: Disclosure of environmental aspects, 3: Climate, , 3: Emissions, 5: Social Impact Assessment, 5: Job creation, 5: Capacity and institutional building, 5: Gender, 5: Social inclusiveness, , 5: Low-income groups, 5: Marginalised groups, 6: Growth & development strategies, 6: Institutional Framework of infrastructure investment, 6: Enabling Environment, 6: Policy
Benban Solar Park is the largest park of its kind in Africa and one of the largest in the world housing 32 solar projects with a total capacity of 1,465 MWac helping to reduce the country's CO2 emissions by more than 1.9 million tonnes per year. The park is located in near Aswan governorate in the region of Upper Egypt, which has one of the best solar resources in the country. All projects were developed under the Egyptian Feed-in Tariff Framework that was designed by the government in 2014 to tackle the high reliance on fossil fuels, which had made up more than 90% of the country's installed capacity, and increase the share of renewables to reach 20% of the peak load by 2020 and 42% by 2035.
EBRD is the largest financier of the park having financed 750 MW over 16 projects with a total investment cost of USD 1.13bn including USD 368m financed by the EBRD and more than USD 400m mobilized from international financiers such as the Green Climate Fund, FMO, ICD, IDB, ICBC and Proparco. These investments were the outcome of years of coordinated policy dialogue with the various public and private stakeholders focusing on developing a contractual framework for the development of renewable energy.
In total the Benban Solar Park projects have created at least 8,000 job opportunities during the construction phase and helped build solar energy expertise within the local communities who will be able to capitalize on this experience in the next projects in Kom Ombo, which is in close proximity to Benban.
All projects have been 100% completed since 2019 and each project is now exporting green energy to the electricity grid under a 25 year power purchase agreement with the sole offtaker, the Egyptian Electricity Transmission Company.
All EBRD financed projects have now been operational since 2019.
Relevance to QII
The project is in line with the Paris agreement and Egypt's Intended Nationally Determined Contributions as per United Nation Framework Convention on Climate Change to increase reliance on renewable energy sources for electricity generation.
The projects attracted new private sector players in the renewable energy market increasing private sector participation and local competition. This has been important in the country transition from the feed in tariff framework to competitive tendering with several bidders competing to provide the lowest tariff for new capacities. This has been supported by a large technical co-operation assignment to enhance the capacity of EETC in administering renewable energy tenders funded by the Bank and the Green Climate Fund under the GCF-EBRD Egypt Renewable Energy Financing Framework that was designed to support and finance the Feed In Tariff programme in Egypt.
The GCF-EBRD Framework also includes a gender inclusion component whereby the Bank has appointed a consultants‚Äô consortium to conduct a market study to identify women's economic opportunities in the renewable sector in the country and provide technical assistance to pilot recommendations to promote women's economic opportunities within the sector
The project has also created job opportunities for the local communities in Upper Egypt, which has traditionally suffered from underinvestment.
An environmental and social economic assessment has been prepared followed by an environmental and social action plan for each project to comply with in accordance to the best international standards.
All EBRD financed projects have contributed to the country's large increase in the non-hydro renewable installed capacity from 687 MW in 2014 to 2,700 MW in 2019, reflecting a staggering 300% increase over the five year period.
The projects have increased private sector participation and competitiveness in the Egyptian renewables market by introducing new international and local private developers, which in turn contributed to the success of the first competitive solar energy tender in the country for 200 MW solar power in the area of Kom Ombo with a record breaking tariff. This will further incentivize the government to pursue its declared targets for renewable energy and commit to reducing its reliance on fossil fuels.
Moreover, 6 of the financed projects with 300 MW have used bifacial technology for the solar modules, which can generate electricity through the panel's backside by making use of light reflected from the ground. These projects are the very first projects in the country using the technology and will help set a precedent for other sponsors to rely on this efficient technology for future capacities.
Annual reduction in CO2 emissions, expected 1.9 million tonnes per year, calculated annually based on the electricity generated by the projects. In compliance with the environmental and social action plan.
Name of Institution
European Bank For Reconstruction and Development