Dubai-based fund manager Alcazar Energy Partners has secured $436 million in financing for two wind farms on Egypt’s Red Sea coast costing a combined $626 million, the company said on Monday.
The Niat and Rasgha projects, each with capacity of 250 megawatts, will be built at Ras Ghareb on the Gulf of Suez and are expected to begin commercial operation by the end of 2028, Alcazar said.
The projects will add to Egypt’s renewable energy capacity as the government seeks to raise the sector’s share of power generation to 45% by 2028, according to recent official targets.
Egypt has been especially keen to draw investment into renewable energy since prolonged power cuts three years ago that were worsened by natural gas supply problems. Surging fuel prices since the US-Israeli war on Iran have also strained state finances.
Electricity from the wind projects will be taken by state grid operator Egyptian Electricity Transmission Company under 25-year power purchase agreements, Alcazar said.
At 3 cents per kilowatt hour, the electricity would cost far less than power generated from natural gas, said Alcazar CEO Daniel Calderon.
The European Bank for Reconstruction and Development, the European Investment Bank and German development finance institution DEG are providing the $436 million in debt financing, with each providing a third, Alcazar said.