New and Renewable Energy Authority (NREA) officials are attempting to complete negotiations with 10 local and foreign financial institutions to finance a Siemens wind farm within the month.
A source in the NREA said that the agency estimates it will need €180m to finance activity in the first part of the project’s implementation. The total cost of the project that will have a 2,000 MW capacity factor is estimated at €2bn. Siemens, a German company, has begun implementing the first stage of the project which will have a capacity factor of 180 MW.
The authority is negotiating with local and foreign banks including HSBC, the National Bank of Egypt (NBE), the Commercial International Bank (CIB), Banque du Caire, Bank Audi, Emirates NBD, International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), the KFW Development Bank, and the African Development Bank (AFDB).
The NREA seeks to provide 60% of the cost of the project through international financial institutions, while the rest of the project’s cost will be provided by local banks. A principle agreement was reached to form an alliance between three local banks—the NBE, Banque du Caire, and the CIB—to secure the necessary funds for the project.
Siemens will also establish a factory for the production of wind turbine blades with self-financed investments of €100m. The factory will produce 300 blades annually for 100 wind turbines that will each have an annual capacity factor of 340 MW.
The NREA’s full payment to Siemens is pending a final agreement with the financing banks. After obtaining loans from the banks, the authority will sign contracts with Siemens to buy the power produced from the new projects.