CAIRO, Oct 26 – Egypt has signed a preliminary financing agreement with Norway’s Scatec and three multilateral development banks for a $650 million solar power project in the southern province of Qena, the Egyptian cabinet said on Monday.
The Dandara project, located in Nagaa Hammadi, will have a planned solar generation capacity of 1 gigawatt (GW), supported by battery storage of 200 megawatt-hours (MWh). The development forms part of Egypt’s broader effort to expand renewable energy generation, reduce reliance on imported natural gas and lower its energy import costs.
The financing arrangements involve the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the African Development Bank (AfDB). The National Bank of Egypt will also take an equity stake in the project company.
The project will be developed in two phases, each comprising 500 megawatts of solar capacity and 100 MWh of battery storage.
The preliminary agreement marks a step towards financing the development, although the project’s implementation will depend on completing the necessary financing and development arrangements.
Renewable energy expansion targets
Egypt is accelerating renewable energy investment as it seeks to reduce its natural gas import bill and diversify its electricity generation mix. The country has set a target for renewable energy to account for 42% of electricity generation by 2030.
The Dandara project would add substantial solar capacity to the country’s electricity system. Its battery storage component is intended to complement solar generation by storing electricity for use when sunlight is unavailable, helping manage the variability of renewable power.
The project’s two-phase structure will allow the development to add capacity in stages, with each phase delivering half of the planned solar generation and storage capacity.
Development finance and local participation
The involvement of the EIB, EBRD and AfDB brings multilateral development finance into the project, while the National Bank of Egypt’s planned equity investment provides a domestic financial-sector stake in the project company.
Scatec, which is listed in Norway, has renewable energy development operations across international markets. Its participation places the company within Egypt’s push to attract investment and technical expertise for large-scale clean energy projects.
The project’s eventual contribution to Egypt’s energy security will depend on its construction, commissioning and integration into the electricity system. If delivered as planned, the 1GW development would increase the country’s solar generation capacity while providing battery storage to support electricity supply.
