If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.
PROJECT DESCRIPTION
Provision of senior debt financing on a project finance basis of up to USD 200m (the "Loan") in favour of Suez Wind Energy S.A.E., a special purpose vehicle ("SPV") incorporated in Egypt for the purpose of constructing and operating a 1.1 GW wind farm in the Gulf of Suez region, Egypt (the "Project").
PROJECT OBJECTIVES
The Project will support the Egyptian government in achieving its renewable energy targets and will be among the projects delivered under the 10 GW renewable energy capacity objective of the Energy Pillar of the Nexus for Water, Food, Energy ("NWFE").
By providing clean energy at one of the most competitive wind tariffs in the region and beyond, this Project will advance Egypt's renewable energy transition while harnessing the exceptional wind resources in the Gulf of Suez. Additionally, the Project is expected to enhance the environmental characteristics of Egypt's power sector by reducing emissions of local pollutants and CO2, as well as lowering water consumption.
TRANSITION IMPACT
ETI score: 66
The Project will contribute to the Green transition impact quality as it will introduce additional renewable energy generation to Egypt's energy mix and assist the transition to a low-carbon economy in a country with high level of reliance on thermal power generation. The Project is expected to deliver sizeable environmental benefits, including expected annual CO2 emission savings of 2.2 million tonnes.
CLIENT INFORMATION
SUEZ WIND ENERGY
Suez Wind Energy incorporated in Egypt will develop and implement the project. The Borrower will be established and owned by a consortium of sponsors that includes ACWA Power ("ACWA") and HAU Energy (together, the "Sponsors").
ACWA Power is an experienced international developer of power generation, desalinated water and renewable hydrogen production projects.
HAU Energy is a newly established RE equity platform that will be ultimately owned by Meridiam (45%), Hassan Allam Utilities ("HAU", 30%) and EBRD (25%).
EBRD FINANCE SUMMARY
USD 200,000,000.00
TOTAL PROJECT COST
USD 1,062,800,000.00
ADDITIONALITY
Financing structure: the EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions, e.g., a longer grace period than the market average. Such financing is necessary to structure the Project. EBRD offers a tenor, which is longer than available to the client in the market on reasonable terms and conditions.
Risk mitigation:EBRD's involvement in the Project is additional due to the Bank's experience and track record with similar projects in Egypt and other countries of operation ("CoOs") which provides comfort to clients and investors, financial or strategic, by mitigating non-financial risks, such as country, regulatory, project, economic cycle or political risks.
ENVIRONMENTAL AND SOCIAL SUMMARY
Categorised A (2019 ESP). The Project involves the development of a 1.1 GW Wind Power Project ("WPP") over two plots of land in the Gulf of Suez ("GoS") in Egypt.
The GoS is located on a globally important bird migration flyway at the Rift Valley in the Red Sea, where concentrations of 13 migratory bird species pass through the area during the spring and autumn each year -and this may present a significant collision risk to various migrating bird species. This risk is compounded through existing as well as planned WPPs in the wider area as well as associated overhead transmission lines.
The southern plot is located within the Gebel El Zeit Important Bird Area ("IBA") which has also been designated as Critical Habitat ("CH") as per EBRD's E&S Policy ("ESP"). The IBA is 100 km long and extends from north of Ras Ghareb and south to the bay of Ghubbet El Gemsa. It is an important corridor for migrating birds. Gebel El Zeit serves as a vital stepping-stone for birds that make the crossing between the western coast of the Gulf of Suez and south Sinai in spring. The ESP sets out strict requirements for the development of projects in CH, including the need for net gain of those biodiversity features that trigger CH designation, in this case various species of migrating birds. The northern plot is located outside of the IBA and is not CH, nevertheless bird migration over the plot is significant and the Project will need to ensure no net loss of biodiversity.
Environmental and Social Impact Assessments have been conducted for both plots and supplemented with various studies and reports to meet ESP requirements including a Non-Technical Summary; Stakeholder Engagement Plan (SEP); Critical Habitat Assessments ("CHA"); Cumulative Effects Assessment ("CEA"); a Project Strategic Environmental and Social Assessment and Cumulative Impact Assessment ("SESA-CIA") focusing on the IBA; E&S Management documents; Biodiversity Management Plans; and a Biodiversity Action Plan ("BAP"), which sets out how the project will achieve the Bank's no net loss and net gain requirements. The ESIA documentation was reviewed by an independent lenders E&S consultant and the Bank and was disclosed on 10 November 2024. Environmental permits have already been issued for the Project. The Bank also has agreed with the Project a draft E&S Action Plan ("ESAP") to structure the Project in line with the ESP. This ESAP will be finalised prior to consideration of the Project by EBRD's Board.
TECHNICAL COOPERATION AND GRANT FINANCING
N/A
COMPANY CONTACT INFORMATION
Ahmed
Rizkarizk@acwapower.com+201144100344www.acwapower.comSODIC EDNC, Building 5, 5th Settlement, New Cairo, Egypt, Arab Republic of Egypt
