The New and Renewable Energy Authority (NREA) has signed a usufruct agreement with Lekela Power to launch a wind farm with 250MW capacity in Suez governorate.
Chairperson of the NREA, Mohamed El Khayat, told Daily News Egypt that the company has received the land allocated for the project upon a usufruct agreement signed in Suez for 2% of the produced energy annually. The Egyptian Electricity Transmission company (EETC) will be purchasing the energy produced from the project.
The project is part of the government’s plan to implement energy projects under the build, own, operate (BOO) system. It is located in north east of Ras Gharib. The project benefits from its location where there are strong winds, allowing the company to sell energy at competitive prices.
Lekela Power signed an energy purchase agreement with the EETC last month. The financial closure of the project is expected to be finalised by the end of August.
Furthermore, Lekela has agreed with three European banking institutions to fund the project by about $245m. The International Finance Corporation (IFC) offered the company $82m worth loan, while the European Bank for Reconstruction and Development (EBRD) contributed with $81m. The Overseas Private Investment Corporation (OPIC) gives the company a fund worth $82m, which was the first fund it provided in Egypt.
The ownership structure of Lekela Power is distributed as 60% for Actis for direct investment and 40% for an alliance led by Mainstream Renewable Power. It includes investors such as the IFC and the Rockefeller Brothers Fund.
Faisal Eissa, the chairperson of the company, announced in previous statements to Daily News Egypt, that Lekela Power plans to establish wind farms with a total capacity of 500MW within two years, in addition to the safeguards whose contracts were signed with the EETC.
The total capacity of the wind farm projects implemented by Lekela in Africa reached about 1,243MW, including three wind farms in South Africa with a total capacity of 360MW in the operation phase, and three plants in Senegal and South Africa with a capacity of 408MW in the construction phase, in addition to two wind farms in Egypt and Ghana with a capacity of 475MW in the final stages of development.