Egypt to Build 1GW Solar Plant with Battery Storage Backed by $479M Funding

In a transformative step for Egypt’s clean energy future, a coalition of global development finance institutions—including the African Development Bank (AfDB), European Bank for Reconstruction and Development (EBRD), and British International Investment (BII)—has announced a landmark financing package of $479.1 million. The funds will support the development of a 1-gigawatt (GW) solar photovoltaic (PV) power plant with an integrated 200-megawatt-hour (MWh) Battery Energy Storage System (BESS) in the Nagaa Hammadi region of Upper Egypt.

The project is spearheaded by Obelisk Solar Power SAE, a special-purpose vehicle fully owned by Scatec ASA, a Norway-based renewable energy solutions provider with a robust presence in emerging markets. Designed to be constructed in two phases, the project is Egypt’s first large-scale hybrid solar and battery facility, signifying a significant milestone in the country’s energy transition and sustainability agenda.

Financing Breakdown and Blended Structure

The total estimated capital expenditure of the integrated project is $590 million. Of this, 80%—approximately $475.6 million—will be covered through a blended financing structure combining concessional loans, commercial financing, and grants:

• African Development Bank Group: $184.1 million

  • Includes $125.5 million in commercial financing

  • $20 million from the Sustainable Energy Fund for Africa (SEFA)

  • $18.6 million from the Canada-African Development Bank Climate Fund

  • $20 million from the Climate Investment Funds' Clean Technology Fund

• European Bank for Reconstruction and Development (EBRD): $173.5 million

  • $101.9 million of which benefits from an EFSD+ (European Fund for Sustainable Development Plus) first-loss cover for 18 years

  • A $6.5 million grant from the EBRD Shareholder Special Fund

• British International Investment (BII): $115 million

  • $100 million as a concessional loan

  • $15 million as a returnable grant to subsidize the BESS component

The African Development Bank’s Board approved its financing package on June 11, 2025, solidifying multilateral commitment to Egypt’s renewable energy transformation.

Project Phases and Expected Impact

Scatec will construct the power plant in two distinct phases:

• Phase 1: 561 MW of solar capacity and 100 MW/200 MWh of battery storage, expected to be operational by mid-2026.

• Phase 2: An additional 564 MW of solar PV capacity, anticipated to come online in the second half of 2026.

Energy generated by the plant will be sold under a USD-denominated, 25-year Power Purchase Agreement (PPA) with the Egyptian Electricity Transmission Company (EETC), backed by a sovereign guarantee. Once operational, the project is expected to generate approximately 3,000 GWh annually—enough to power over one million Egyptian homes—while displacing an estimated 1.4 million metric tons of carbon dioxide emissions per year.

Advancing Egypt’s Climate Ambitions and NWFE Platform

The Obelisk Solar Power project is part of Egypt’s broader commitment to reaching 42% renewable energy in its power mix by 2030. It also aligns with the country’s Nexus of Water, Food and Energy (NWFE) Country Platform, which was launched during COP27 in Sharm El Sheikh as a cornerstone initiative for sustainable development and climate resilience.

Dr. Rania A. Al-Mashat, Egypt’s Minister of Planning, Economic Development and International Cooperation, called the project a “landmark” for Egypt’s clean energy ambitions.

“This is not only the first of its kind in Egypt, but it also serves as a model for innovative financing through strategic multilateral partnerships. It strengthens grid resilience, advances our NWFE agenda, and provides new opportunities for private sector involvement.”

Global Endorsements and Strategic Importance

The project has received strong endorsements from key stakeholders across participating financial institutions:

• Wale Shonibare, AfDB Director of Energy Financial Solutions:

  “This project exemplifies the renewable energy potential across Africa and showcases how innovative financing and partnerships can support scalable clean energy solutions.”

• Iain Macaulay, BII Head of Project Finance for Africa & Pakistan:

  “Integrating BESS with solar PV is a game-changer. This dispatchable renewable solution strengthens Egypt’s energy security and sets the standard for future hybrid projects.”

• Boyd Carpenter, EBRD Managing Director of Sustainable Infrastructure:

  “This project takes Egypt’s energy transition to the next level by ensuring solar power is available day and night. It significantly reduces fossil fuel dependency while supporting NWFE’s energy pillar.”

• Stefano Sannino, EU Directorate-General for MENA and Gulf Affairs:

  “This project represents a flagship investment under the EU-Egypt Strategic Partnership and the new EU-Egypt Investment Guarantee for Development Mechanism. It is a model for future green investments in the region.”

Scatec’s Role and Vision

Scatec ASA, the project’s developer, will also serve as the operations and maintenance (O&M) contractor. The company has extensive experience in hybrid energy solutions, including projects in South Africa, Mozambique, and other developing markets.

Terje Pilskog, CEO of Scatec, shared his enthusiasm:

“This project is a major milestone for Scatec and affirms our ability to deliver complex, large-scale hybrid solutions. It also demonstrates the power of collaboration with top-tier development institutions to realize sustainable energy goals.”

Paving the Way for Africa’s Energy Future

Beyond Egypt, the Obelisk project holds replicability potential across Africa. The combination of long-term concessional financing, commercial investments, and battery-backed solar systems presents a viable model for countries looking to accelerate their clean energy transitions while managing grid intermittency.

This landmark investment signals growing confidence in Egypt’s green economy, marking a new era of energy security, climate leadership, and multilateral collaboration in the Middle East and North Africa (MENA) region.