Japan to back solar plant in Egypt with $89mn loan

Tokyo / DPA

The Japanese government has decided to offer a yen loan of about 10 billion about $88,829,700) to support construction of a gigantic solar power plant with a large-capacity storage battery system in Egypt.
Egypt is expected to hold a public tender open only to Japanese companies with advanced battery technology. The government hopes this will give the Japanese firms a leg up in the rapidly expanding renewable energy markets in the Middle East and North Africa.
Egyptian President Abdel-Fattah El Sissi is scheduled to make his first visit to Japan from February 28 to March 2, during which a written agreement on the project is expected to be signed.
According to sources, the plan is to build a 20-megawatt solar power plant with a 30-megawatt capacity storage facility in the eastern Egyptian city of Hurghada. The plant is to be completed by 2019 and would supply electricity to about 7,000 households.
The total construction cost is expected to be about $92 million (about 10.5 billion yen), which is to be fully covered by a yen loan to be paid back over a long period at a low interest rate. This would be Egypt’s first major solar power plant equipped with a large storage facility.
A senior official of the Egyptian Electricity and Renewable Energy Ministry told The Yomiuri Shimbun that the government had high hopes for Japan’s storage technology, due to its excellent durability and stability. The official revealed that bidding for the project would only be open to Japanese companies or consortiums led by Japanese firms.
Egypt produces oil and natural gas, but it also imports energy from other countries. To address this, the Egyptian government has set a goal of increasing the proportion of energy generated from renewable sources from the current 3 per cent to 20 per cent by 2022.
Other resource-rich countries in the Middle East and North Africa are also expecting demand for electricity to rise, and are therefore looking to renewable energy.