The 250MW project in the eastern coastal region of Ras Gharib will cost $450 million. The remaining funding is expected to come from the state and the private sector. It is part of the World Bank's build-own-operate programme for independent power producers (IPPs), which aims to develop 2.5GW of commercial wind farms in Egypt. The country currently has 430MW of wind in operation. Of the $220 million funding, $70 million is a loan, with the rest provided by the bank's Clean Technology Fund (CTF). The loan has a 28.5-year maturity period, with the first seven years interest-free.
The construction of the wind farm will be the third and final phase of Egypt's $794.9 million wind power development project (WPDP), one of the many initiatives aimed at scaling up generation of electricity from renewable energy sources in the country.
The funding for the ambitious three-phase WPDP will largely come from the CTF, one of the World Bank's two climate investment funds that aims to increase the use of low-carbon technologies and cut carbon emissions across the globe.
"According to the loan, we will be able to keep pushing forward on the goal of getting wind power functioning for at least 20% of our energy needs by the end of the decade," a briefing from the Egyptian Environment Action Agency says.
The WPDP was implemented in 2007. The first part involves the installation of $342 million of transmission infrastructure, for which the World Bank will provide $70 million while the CTF will inject $148.3 million. The second component features $2.9 million of technical assistance, including $1.75 million from the CTF.
The Egyptian government is keen to increase renewable energy sources because of increasing pressures on fossil-fuel resources. It has a target to generate 20% of its energy from renewable sources by 2020. Of this, 12% - 7.2GW - is to be generated from wind energy. The government plans to bring on board between 400MW and 600MW of all renewables annually under the WPDP.
The European Investment Bank (EIB) and the government of Egypt have committed $70 million and $54 million, respectively, to scale up wind in the north African nation.