The European Bank for Reconstruction and Development commended the Egyptian government’s success in increasing the utilization of its abundant resources of solar and wind energy, by increasing private sector investments in green energy, saying in a report on its website that the crisis experienced by the energy sector during 2012 prompted the government to increase its use. From these resources, Egyptian officials began a scheme for a solar feed-in tariff and focused on a very large site in southern Egypt in Benban, Aswan, and then consulted the European Bank for Reconstruction and Development on how to make the project attractive to private investors.
The bank stated that two years of work to provide bank financing; The 37 square kilometer, 1.5 gigawatt Benban solar plant has attracted strong interest from investors, with 80 private sector candidates shortlisted and then settling on about 20 investors to set up projects in Benban. The European Bank for Reconstruction and Development was the largest financier of the project, and the construction of Benban was completed in 2019.
When the auctions were launched, investors got fantastic prices for solar energy of two and a half US cents per kilowatt-hour, and between three and four US cents per kilowatt-hour for wind power, said Harry Boyd Carpenter, managing director of green economy and climate action at the European Bank for Reconstruction and Development. .
Carpenter added that the price of electricity at Kom Ombo, the next big solar project that the European Bank for Reconstruction and Development began financing in Egypt earlier this year, will produce power at a cost of less than a third of Benban’s price per megawatt-hour, because it has been implemented competitively.
The managing director of green economy and climate action at the bank continued that the message Benban sent to investors was: “You can come to Egypt, find the technical expertise you need, you will be treated fairly by the government and you will have a viable project in the long term.”
“This led to investors entering the project with confidence,” he added.
The report stated that with the approach of the COP26 summit in Glasgow, Britain, next November, the question on their minds is what can save the world from climate catastrophe? The answer is actions that are split between governments, international organizations and multilateral partners such as the European Bank for Reconstruction and Development, which is already spending billions on green transformation, and aimed at getting the private sector to spend the trillions needed for green investment.
On this, Harry Boyd Carpenter said: “This must include the private sector. We need huge investments, energy consumption from hydrocarbons ranges between 80-83 percent, and by 2050 we have to reach zero percent of carbon emissions.”
The good news, Carpenter added, is that the private sector’s interest in green investments is increasing sharply, and that there is a lot of investment ready to be pumped into creating green homes.
He explained that the EBRD’s view lies in creating the appropriate enabling environment, which is still missing in many places, as the Bank aims to make the majority of its investments green by 2025 while in line with the goals of the Paris Agreement on Climate Change by 2023, and intensify Participation in green politics across its regions.
“We need two things,” Carpenter said. One is a credible policy framework in the country in which the investment is made for governments to join in and share net zero emissions, or produce an ambitious Nationally Determined Contribution (NDC), and the second is catalytic financing to eliminate investment risks, which is provided by the European Bank for Reconstruction and Development “.
The article “European Reconstruction”: Competitive energy prices motivate investors for green projects in Egypt was written in Al Borsa newspaper.