Scatec, a renewable energy power producer, and its partners have issued a $334.5 million non-recourse green project bond to refinance six solar projects in Egypt with 380 MW. The project bond benefits from a Climate Bond certificate from the Climate Bond Initiative.
The non-recourse green bonds, maturing in 19 years, were distributed to a consortium of development finance institutions, comprising the European Bank for Reconstruction and Development (EBRD), the US International Development Finance Corporation (DFC), the Dutch entrepreneurial development bank FMO and German Investment Corporation DEG, alongside private institutional investors from around the globe.
The EBRD is investing up to $100 million in a certified green bond issuance of $334.5 million. The Bank also provides a $30 million Credit Enhancement Facility (CEF) for participating institutional investors.
Multilateral Investment Guarantee Agency (MIGA), a part of the World Bank Group, and EBRD risk mitigation instruments were incorporated into the structure to enable distribution to the private sector investors, including major institutions for whom these are first-ever investments in Egypt.
Mitsubishi UFJ Financial Group acted as arranger for the bond issue.
“With this innovative green transaction, we have gained access to the international debt capital markets for project financing, improved our financing terms, and supported Egypt’s ambition to become a green hub in the Middle East,” said Mikkel Torud, CFO of Scatec.
“The refinance is being granted for six operational solar PV projects participating with a capacity of 380 MW in the Benban Solar Park with a total capacity of 1,465 MW, initiated as part of the Egyptian government’s ambitious Sustainable Energy Strategy for the period ending 2035. The Benban Solar Park is funded by private sector capital, enabling the Egyptian government to support its goal of generating 20% electricity from renewable energy resources by 2022. The agreement signed today reflects the huge confidence of the private sector in the Egyptian electricity sector,” said Mohamed Shaker, the Minister of Electricity of Egypt.
According to Mercom’s Q1 2022 solar funding and M&A report, in March 2022, Scatec has refinanced the non-recourse debt facilities tied to three operating solar projects totaling 190 MW it co-owns in South Africa.