The African Development Bank has teamed up with European Bank for Development and Reconstruction (EBRD), and the British International Investment (BII), the UK’s development finance institution and impact investor, to provide $479.1 million in funding to Obelisk Solar Power SAE, a special purpose vehicle incorporated in Egypt, and owned by Scatec ASA.
This financial facility will be used for supporting the development of a 1GW solar photovoltaic power plant integrated with a 200 MWh Battery Energy Storage System (BESS) in the Nagaa Hammadi region of Egypt.
The African Development Bank Group’s financing package of $184.1 million includes $125.5 million in commercial loans, as well as concessional funding from Bank Group-managed Special Funds the Sustainable Energy Fund for Africa (SEFA) worth $20 million, and $18.6 million from the Canada-African Development Bank Climate Fund, a partnership of the African Development Bank and the Government of Canada.
A further $20 million will be channelled from the Climate Investment Funds’ Clean Technology Fund through the African Development Bank. The Bank’s Board of Directors approved the funding package on June 11, 2025.
As per the deal, EBRD will be providing a financing package of up to $173.5 million, of which $101.9 million will benefit from a European Fund for Sustainable Development (EFSD+) first loss cover guarantee for the first 18 years, in addition to a $6.5 million grant to be provided by the EBRD Shareholder Special Fund.
BII financing includes a $100 million concessional loan and a $15 million returnable grant that helps lower the overall cost of the BESS part of the project, making it more financially viable and affordable, while attracting private sector participation and creating models for future investments. BII’s financing is subject to drawn down conditions.
The project’s blended financing of $475.6 million corresponds to approximately 80 per cent of the total estimated capital expenditure of $590 million.
According to AfDB, the integrated power plant will be developed by Scatec, a leading renewable energy solutions provider, and built in two phases.
The first phase, with 561 MW of solar and 100 MW/200 MWh of battery storage, aims to begin operations in the first half of 2026. The second phase of 564 MW solar aims to start operations in the second half of 2026.
The energy will be sold under a USD-denominated 25-year Power Purchase Agreement (PPA) with the Egyptian Electricity Transmission Company, backed by a sovereign guarantee.
Upon completion, it will be the first integrated solar photovoltaic and battery storage project of this scale in Egypt, representing a significant milestone in the country’s energy transition. Egypt aims to reach 42 per cent of renewables in its power mix by 2030.
The solar power plant is estimated to generate approximately 3,000GWh per year of additional renewable power, which will enhance grid stability and manage peak demand. It will also reduce carbon dioxide emissions by up to 1.4 million metric tons annually.
The facility will support the diversification of Egypt’s energy mix and will increase the share of renewable energy contributing to the reduction of greenhouse gas emissions and supporting the country's decarbonisation goals.
Egypt’s Minister of Planning, Economic Development and International Cooperation, Dr Rania A. Al-Mashat said: "The Obelisk Solar Power project represents a landmark in Egypt’s clean energy transition, not only as the first integrated solar and battery storage facility, but also as a model for innovative financing through effective multilateral partnerships."
"It reflects our continued efforts to scale renewable energy, enhance grid resilience, and drive forward the implementation of Egypt’s Nexus of Water, Food and Energy (NWFE) Country Platform, thus advancing our climate ambitions and creating new opportunities for private sector engagement and sustainable development," she added.-TradeArabia News Service
