Renewables company Scatec has signed a 25-year corporate Power Purchase Agreement (PPA) with Egypt Aluminium for a 1100MW solar and 100MW / 200MWh battery storage project.
The estimated total capital expenditure for the solar PV and BESS project in Egypt is approximately $650m (US dollars).
Egypt Aluminium is the country’s largest aluminium producer and industrial electricity consumer and exports approximately 60% of its production to Europe.
The solar PV and BESS project will be instrumental in its ambition to decarbonise its aluminium production, and to meet the EU’s Carbon Border Adjustment Mechanism (CBAM) requirements which will be introduced in 2026.
The next steps for the project are to work with the relevant authorities to allocate land, finalise grid connection and secure financing.
It is hoped that construction will start within the next 12 months.
Scatec chief executive Terj Pilskog said: “This is another testament to Scatec’s position as one of the leading renewables companies in Egypt.
“It is a groundbreaking project as it is the first utility-scale PPA in the country with an industrial offtaker.
“I would like to thank all parties involved for making this happen, especially our partners at Egypt Aluminium.
“Further, our team has shown great persistence and creativity in securing this agreement and bringing new solutions to the market.”
The capital of $650m will be funded by approximately 80% non-recourse project debt, and the remainder by equity from Scatec and partners.
Scatec owns 100% of the project but is aiming to reduce its long-term economic interest by inviting additional equity partners.
Scatec will be the designated EPC service provider, with an EPC share of approximately 90% of total capex. The company will also be the asset manager and O&M service provider.