EGYPT: EBRD to underwrite Scatec’s green bond for solar energy

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EGYPT: EBRD to subscribe to Scatec's green bonds for solar energy ©Freebird7977/Shutterstock

The European Bank for Reconstruction and Development (EBRD) intends to subscribe to a green bond issued by the Norwegian independent power producer (IPP) Scatec. The proceeds of this transaction, i.e. 340 million dollars, will be dedicated to the production of renewable energy.

It is an initiative that calls for others in Egypt. The independent power producer (IPP) Scatec is preparing to issue a green bond to finance renewable energy in Egypt. This is a loan issued on the market by a company to investors to enable it to finance its projects contributing to the ecological transition. Scatec’s initiative attracts one of the most active investors in the country, the European Bank for Reconstruction and Development (EBRD). The London (UK) based bank, which is heavily involved in financing the green economy in Egypt, is expected to subscribe to the loan, which has an overall value of $340 million.

The EBRD’s proposed financing of 130 million euros is expected to be approved on February 23, 2022. In this transaction, $100 million will be made available as a direct subscription to the bond, with $30 million representing a cash facility for the benefit of participating private institutional investors.

Read also- EGYPT: towards the reinforcement of the EBRD’s support to the green and sustainable economy

The proceeds of the green bond will be used to finance a portfolio of six solar power plants (380 MWp) that Scatec operates in the Benban complex. Located in the governorate of Aswan, this mosaic of 41 solar photovoltaic plants (1,650 MWp) was built by IPPs like Scatec, which also wants to diversify its sources of energy production in Egypt. The group led by Raymond Carlsen has also embarked on the production of hydrogen with electricity generated from renewable sources. In partnership with other investors, this fuel will be turned into green ammonia for export.

According to the EBRD, the green bond, the first renewable energy-backed private sector bond in Egypt, will be “verified” by the Climate Bond Initiative (CBI). The financial institution headed by Odile Renaud-Basso also plans to provide a technical cooperation mission on a cost-sharing basis with Scatec. This mission will aim to support the implementation of an inclusion program, including the establishment of a certified training program for agribusiness entrepreneurs and strengthening the role of women in the local economy (Benban).

Jean Marie Takouleu

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