In one of the largest foreign direct investments (FDI) in Egypt in recent years, the country will leverage a $635 million investment from the International Finance Corporation (IFC) to construct, operate and maintain up to 11 solar power plants with a combined capacity of 500 megawatts.
“This landmark investment demonstrates that when you have the right reform policies, and a government willing to allow greater involvement by the private sector, you can attract investors in every sector, including infrastructure,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa.
Located in Benban near Aswan, the solar photovoltaic generation park will be the largest globally. It will harness Egypt’s vast solar resources to generate reliable and affordable power, reduce greenhouse gas emissions, create employment, drive the local economy and in turn spur overall economic growth in the country.
It is part of Egypt’s solar Feed-In Tariff (FIT) program, which including projects financed by other institutions like Proparco and the European Bank for Reconstruction and Development (EBRD), is expected to be one of the largest FDIs catalyzing $2 billion of inflows.
In June 2017, EBRD approved $500 million to finance a similar project under the program that aims to stimulate private investment in over 4GW of wind and solar power.
The program will introduce multiple regional and international investors and new lenders to the country, highlighting Egypt’s re-emergence as an attractive investment destination. It will also create a wider base of private capital for future infrastructure investments into Egypt.
IFC’s investment into the solar photovoltaic project is part of its broader strategy to create competitive, sustainable, inclusive and resilient markets to unlock private investment, create jobs and enable governments to reach their development objectives.
The Benban solar project will cost $730 million to develop.