Africa50, the pan-African infrastructure investment platform and its partners, announced the refinancing of the non-recourse project debt for the six Scatec solar power plants in Egypt totaling 380 MW megawatts in which Africa50 is a strategic investor, through the issuance of a 19-year $334.5 million non-recourse green project bond. The refinancing will provide increased leverage, extended tenor, and reduced interest costs, creating value both for the shareholders of the infrastructure and the Egyptian Electricity Transmission Company (EETC), the state-owned utility company and off-taker. The six plants are part of the 1.5 GW Benban Solar Park, one of the largest solar parks in the world. The plants were connected to the grid in 2019 and now generate close to 1TWh of clean power annually, enough to provide energy for more than 420,000 households in Egypt.
Alain Ebobisse, CEO, Africa50: “As highlighted at COP26, Africa must leverage innovative mechanisms to further attract much-needed investments into climate-resilient infrastructure projects. This pioneering transaction demonstrates Africa50’s commitment to mobilizing funding from international capital markets to support its shareholder countries’ transition to low-carbon economies, while generating attractive returns.”
This innovative climate finance transaction is the first green bond ever issued for non-recourse infrastructure financing in Africa. The bond was distributed to a pool of private international institutional investors and a consortium of development finance institutions comprising the European Bank for Reconstruction and Development (EBRD), the US International Development Finance Corporation (DFC), the Netherlands Development Finance Company (FMO) and German Investment Corporation DEG. Mitsubishi UFJ Financial Group (MUFG) acted as arranger for the bond issue.
Mikkel Tørud, CEO, Scatec Solar: “With this innovative green transaction, we have gained access to the international debt capital markets for project financing, improved our financing terms and supported Egypt’s ambition to become a green hub in North Africa. Once again, we have demonstrated our ability to find innovative financial solutions and new funding sources to enhance project returns.”
The plants were developed under the second round of the Egyptian Feed-in Tariff Program (FiT). Africa50 committed late-stage project development equity funding for the six plants under a joint development agreement (JDA) with Scatec Solar and Norfund, and later funded its 25% share of construction equity. Senior debt was provided by EBRD, the Netherlands Development Finance Company (FMO), the Green Climate Fund, the Islamic Development Bank and the Islamic Corporation for the Development of the Private Sector. The plants sell power to state-owned Egyptian Electricity Transmission Company under a 25-year power purchase agreement.
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