The Islamic Corporation for the Development of the Private Sector (ICD)-the private sector arm of the Islamic Development Bank (IsDB), and Alfa Solar Co- a subsidiary of Alfanar Company, have signed facility agreements for a US$28.5 million Shariah-compliant senior financing to part fund the development, construction and operation of a 50 megawatts solar PV project (the “Project”) in the Arab Republic of Egypt. ICD and Alfanar are also partnering with the European Bank for Reconstruction and Development (EBRD), which is providing the Project with a matching conventional loan facility.
The Project is being developed under the Government of Egypt‘s feed-in-tariff (FiT) renewable energy program, which was launched in 2014, and aims to attract enough private investment to facilitate the development of over 4,000 megawatts of wind and solar power projects in the country. The project will be located in Benban solar complex, which is set to be one of the largest solar energy parks in the world.
The Project is expected to abate up to 100,000 tons of CO2-equivalent per annum, supporting Egypt’s emission reduction targets under the Paris Climate Agreement, as well as promoting sustainable energy development and private sector participation in the country’s energy landscape.
Alfa Solar has executed a power purchase agreement with the Egyptian Electricity Transmission Co. (EETC) in May 2017, and is working with ICD and EBRD to achieve financial close by October 2017
Mr. Khaled Mohammed Al-Aboodi, the Chief Executive Officer of ICD, expressed his appreciation for all the effort that was invested to reach this milestone by all the parties involved, and thanked the Egyptian Government and its various agencies for their commitment and support of this important program. He also welcomed the opportunity to be part of this success story, and hoped that this can lead to more partnerships with Alfanar in the near future.
Mr. Sabah Mohammed Al Mutlaq, Chairman of Alfa Solar and Vice-Chairman of Alfanar Group said that “The collaboration with EBRD and ICD for financing this project has been a pivotal element in taking the project forward. Globally, countries are experiencing the effects of climate change and renewable energy investors and financier’s role is vital to cultivate more investment in the region for green energy and scale down the effects of global warming. This partnership will assist the socio-economic development in Benban by providing local population with infrastructure, job creation and skills training. The region has tremendous potential when generating power from the natural resources, and Alfanar will continue to actively consider venturing with ICD for additional renewable technology projects in solar, wind as well as energy from waste”
Alfanar Company was established in 1976 in the Kingdom of Saudi Arabia, and is a leading player in the Middle East’s energy sector, with 17,000 employees and more than 2,000 engineers. The Company’s activity portfolio covers integrated development, financing, engineering, construction, testing & commissioning, technical services, civil works, operation and maintenance for Power, Water, Oil & Gas projects; in addition to manufacturing of power electrical equipment with world class research and development centers and offices in Portugal, UAE, Egypt, Qatar, UK, India and Spain.
ICD is a multilateral financial institution and a member of the Islamic Development Bank (IsDB) Group. The mission of ICD is to provide Sharia-compliant financing and investment solutions to private sector actors engaged in developmentally impactful activities in its member countries. ICD also provides advice to governments and private sector organizations to encourage the establishment, expansion and development of Islamic finance instruments and channels globally. ICD is rated AA by Fitch and Aa3 by Moody’s.