IFC and MIGA, members of the World Bank Group, signed an agreement to help the development of a 252MW wind farm by Lekela in Egypt’s Red Sea governorate.
In a declaration, the IFC witnessed that it will provide $84 million in financing while MIGA will give $122 million in financial guarantees, supporting to expand the production of clean energy, lower generation costs, and diversify the country’s energy mix.
The wind farm, West Bakr Wind, situated in the Gulf of Suez, is in processes to produce over 1,000 gigawatt-hours per year, at a tariff well below the average cost of generation in Egypt. The project is expected to power more than 350,000 homes and avoid more than 550,000 tonnes of carbon dioxide discharges yearly.
It is part of the government’s Build, Own, Operate framework and a key pillar of targets to generate 20% of electricity from renewable energy sources by 2022, reducing Egypt’s reliance on natural gas.
CEO of Lekela, Chris Antonopoulos, said “The West Bakr Wind project will play a crucial role in helping the diversification of Egypt’s generation capacity by delivering a best-in-class and competitively priced clean power in the country”.
Antonopoulos added: “As our first project in Egypt, we see a huge opportunity with wind here, and we look forward to working in the country for years to come.”
The IFC’s contribution, in the form of much needed US-dollar-based long-term financing, includes a loan of up to $26 million and $58 million from IFC’s innovative syndications platform, the Managed Co-Lending Portfolio Programme.
MIGA is enabling guarantees of up to $122 million to help Lekela manage non-commercial risk. IFC and MIGA are also supplying key environmental and social guidance to safeguard an important migratory bird flyway.
The project Features the World Bank Group’s strategy in Egypt to help the government meet its renewable energy targets, and free up natural gas resources for export to generate foreign exchange.
“We are dedicated to supporting the government’s programme in Egypt and boosting the production of clean, wind-generated electricity,” said Walid Labadi, IFC Country Manager in Egypt, Libya, and Yemen.
“The Lekela wind farm will support lower the average cost of electricity generation in Egypt and boost private sector participation in this key sector, while sending a powerful signal to the market about our commitment to the country’s renewable energy programme,” Labadi said.
The IFC and MIGA’s involvement complement the World Bank Development Policy Financing programme, a new $1 billion programme signed in December 2018 to support the second generation of Egypt’s reform programme, which will target on developing the private sector while enabling inclusive growth.
