The Board of Executive Directors of IFC, a member of the World Bank Group, approved on July 20 an investment of $635 million that will help construct, operate and maintain up to 11 solar power plants in Egypt. The combined capacity of the plants amount to 500 megawatts. This will be one of the largest private foreign direct investments in the country’s power sector in recent years.
Part of Egypt’s landmark solar Feed-In Tariff (FIT) program, the $730 million project in Benban, near Aswan, aims to mobilize private investment to build the world’s largest solar photovoltaic generation park, harnessing the country’s vast solar resources. As well as helping to spur economic growth, the project will help drive the local economy, including the creation of temporary and long-term jobs and help reduce greenhouse gas emissions
“This landmark investment demonstrates that when you have the right reform policies, and a government willing to allow greater involvement by the private sector, you can attract investors in every sector, including infrastructure,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. “Investments like these are the nucleus for economic growth, which is needed in Egypt.”
Egypt’s solar FIT program, which includes projects financed by other institutions like the European Bank for Reconstruction and Development and Proparco, is expected to be one of the largest foreign direct investments (FDIs) in years, catalyzing a total inflow of $2 billion.
The program will introduce multiple regional and international investors to the country, as well as a number of new lenders, highlighting Egypt’s re-emergence as an attractive investment destination. It will also create a wider base of private capital for future infrastructure investments into Egypt.
The investment is part of IFC’s broader strategy to create markets that are competitive, sustainable, inclusive, and resilient. This work is central to unlocking private investment, creating jobs, and helping governments reach their development objectives.
This project is also a result of a joint World Bank Group implementation plan in which IBRD, IFC and MIGA work together to respond to a key priority for Egypt’s government. IBRD has supported reforms in the energy sector over the last three years, for example, to enable private sector-led renewable energy development in Egypt.
Credit: All Africa