The Benban Solar Park, which targets to reach between 1.6 - 2.0 GW of solar power by the middle of 2019, will provide fast-developing Egypt with the clean energy it requires for sustainable economic growth.
The project will not get any incentives. However, it will be granted a 25-year contract to sell its electricity at 7.8¢/kWh to the state-owned Egyptian Electricity Transmission Company (EETC). The price will be pegged to the value of the US dollar.
At the moment 29 power plants in the park have received public financing at an amount of almost $1.8 billion. They account for nearly 1.5 GW of solar power.
The solar park is designed to house 32 power plants. All the plants are designed to be powered up by mid-2019 and they will be capable of churning out a combined 1,650 megawatts of electricity.
This is forecast to provide Egypt, with a population of more than 90 million, with the clean energy it needs to drive growth and fight poverty.
Generate from renewable sources
Egyptian officials think the nation can generate 20 percent of its power from renewable sources by 2022.
“The potential is endless,” says Lamya Youssef, the head of private sector power at the state-run Egyptian Electricity Transmission Company. “Because of the enormous increase in (Egypt’s) population, we need large investments in infrastructure, which the government cannot afford on its own. That’s why we need private sector investments.”
Initially, the land had 41 unique plots ranging from 0.12 square meter to 0.39 square meter. The total land area of the park is about 14.4 square meter. The Sahara Desert’s eastern region is known to have some of the best sunlight in the world. It ranks better than the US/Mexico western desert, but trails a little behind the Chilean desert highlands considered the world’s best spot.
The centralization of the electricity grid infrastructure such as power lines and power substations allows for the sharing of costs of expensive hardware, making the cost of electricity drop lower. Newly-developed financial models, some of them partially backed by governments, are helping investment groups develop large-scale solar power projects at decent pricing.
IFC and banks providing loan
For example, the Multilateral Investment and Guarantee Agency (MIGA), an organization within the World Bank Group, is providing $210 million of political risk insurance to private lenders and investors involved in the solar park. International Finance Corporation (IFC) and a consortium of nine international banks will provide a $653-million debt package to finance construction of 13 solar power plants, which will join 19 other plants to make up the Benban Solar Park – the largest private-sector financing package for a solar photovoltaic facility in the Middle East and North Africa.
The plants will cost a total of $823 million to build, the IFC said in a press release. At least 325MW of the site is designed to use of NEXTracker’s single axis trackers. Another 64MW of single axis trackers will be deployed by German group ‘Mounting Systems GmbH. Construction is underway on multiple projects at the site, including a 165MW portion that just started work.