EGYPT —Norwegian renewable energy developer Scatec has signed financing agreements for the first phase of the Dandara project in Egypt and commenced construction. The development will combine a 569 MW solar power plant with a 100 MWh battery energy storage system to supply electricity to Egypt Aluminium under a 25-year power purchase agreement supported by a sovereign guarantee.
The financing package totals USD 217 million and has been provided by the European Bank for Reconstruction and Development (EBRD), African Development Bank (AfDB) and European Investment Bank (EIB). It covers approximately 80% of the first phase’s estimated capital expenditure of USD 271 million, with the remaining funding requirements to be addressed through the project’s equity structure and other financing arrangements. The non-recourse structure links repayment primarily to the project’s cash flows and assets.
Once operational, the first phase is expected to generate approximately 1.4 TWh of renewable electricity annually and avoid more than 550,000 tonnes of carbon dioxide emissions each year. The long-term supply arrangement is intended to help Egypt Aluminium reduce the emissions associated with its energy-intensive aluminium production. It may also support the company’s exposure to export markets where carbon-related trade requirements are becoming increasingly significant.
Scatec holds a 56% ownership interest following transactions involving the National Bank of Egypt and the EBRD investment platform. The company plans to bring in additional equity partners and arrange equity bridge loans, allowing its equity contribution to be deferred until the construction period ends. Scatec will also provide engineering, procurement and construction services, with its EPC scope representing approximately 80% of the first phase’s total capital expenditure, alongside asset management and operations and maintenance.
Commercial operations for the first phase are targeted for the first half of 2028, while construction of the second phase is expected to begin in the first half of 2027. The broader development is planned to expand solar generation and battery storage capacity, although the financing announced here relates to the first phase.
The project brings together a renewable energy developer, a major industrial electricity consumer and multilateral development lenders. For Egypt’s aluminium sector, dedicated solar generation combined with battery storage could help manage the variability of renewable power while reducing dependence on higher-carbon electricity. For lenders and prospective equity investors, the long-term power purchase agreement and sovereign guarantee provide important elements of the project’s revenue and risk framework. Scatec develops, builds, owns and operates renewable energy and storage assets across multiple markets, while the EBRD, AfDB and EIB provide financing for infrastructure and economic development projects.
