The European Bank for Reconstruction and Development (EBRD) has approved a long-term senior loan of $50m (equivalent to €42m) for Egypt to construct a 500 MW wind farm.
The plant is to be located in the Gulf of Suez, approximately 40 km north-west of Ras Ghareb.
The EBRD said the project will be one of the largest privately developed utility scale wind power plants in Egypt, and will support the country in increasing its renewable energy capacity. Additionally, it will support Egypt’s transition to the use of renewable energy sources, and exploitation of the exceptional wind resources available in the Gulf of Suez area.
Moreover, the project is expected to further improve the environmental characteristics of Egypt’s power sector by reducing local pollution and CO2 emissions, as well as water consumption.
By adding 500 MW of renewable energy generation to Egypt’s energy mix, the project is set to assist in Egypt’s transition to a low-carbon economy, due to its current high dependency on thermal power generation.
The wind plant’s construction will contribute to Egypt’s goal of producing 20% of its electricity from renewable sources by 2022, and 42% by 2035. It is expected to achieve sizeable environmental benefits, with an anticipated annual reduction in CO2 emissions of about 1m tonnes.
“In addition, the project will allow for increased private participation in the renewable energy sector in the country,” EBRD said.
The bank announced that the total costs of the project are likely to come in at about $560m (the equivalent of €474m).
This represents the third private sector wind farm to be constructed in the Gulf of Suez. The bank disclosed that the new project will be located to the north of the West Bakr wind farm, which it has also financed.