AIIB Supports Renewable Energy Development in Egypt
Beijing, Sept. 6: The Asian Infrastructure Investment Bank (AIIB) has announced up to US$210 million in debt financing to tap Egypt’s renewable energy potential and the country to meet its commitment under the Paris Climate Agreement.
“This solar power project will increase Egypt’s power generation capacity, reduce the country’s dependence on gas and fuel for electricity generation, and will help the country meet its commitments under the Paris Climate Agreement as it moves towards an environmentally sustainable energy mix,” the AIIB said in a statement issued on Tuesday, Sept. 5.
According to the statement, the project will consist of 11 green field solar power plants with an aggregate capacity of 490 MW. Egypt’s huge solar resources, together with its strategic vision for green growth, will allow this project to generate global environmental benefits by avoiding Greenhouse Gas (GHG) emissions of more than half a million tons of CO2 per year. A syndicate of lenders including the Bank will provide long-term debt financing on a limited recourse project finance basis.
“Investing in clean, renewable energy is a big part of our strategy to promote a sustainable and low-carbon future for Asia,” the statement quoted D.J. Pandian, AIIB Vice President and Chief Investment Officer, as saying. “We are supporting this project because it contributes to Egypt’s renewable energy capacity, and it will help position the country as a regional energy hub, which will have economic benefits for the entire region.”
The program is expected to increase Egypt’s generation capacity so it can export energy during peak hours and improve its connectivity in the Middle East, Asia, Europe and Africa.
The Project will be co-financed by AIIB and the International Financial Corporation (IFC), and is attracting additional lenders from the private sector and bilateral financial institutions.
The AIIB is a multilateral development bank founded to bring countries together to address the daunting infrastructure needs across Asia.
Headquartered in Beijing, AIIB commenced its operations in January 2016 and has now grown to 80 approved members from around the world. Its mission is to improve economic and social development in Asia by investing in high quality, financially viable and environmentally friendly infrastructure projects.