Scatec ASA, in partnership with EDF power solutions, has started construction of the 900 MW Shadwan onshore wind farm in Egypt. In connection with the project, the Norwegian group has signed equity bridge loan (EBL) agreements totalling $150 million with The Arab Energy Fund (TAEF). The three-year facility comprises $50 million for Shadwan and $100 million for Energy Valley, a project combining 1,950 MW of solar capacity and 3,935 MWh of battery storage.

A $716 million project

According to Scatec, Shadwan carries a total capex of $716 million and will be among the largest onshore wind farms in Africa. The project is expected to generate approximately 4 TWh per year and avoid an estimated 1.6 million tons of CO2 emissions annually. Elsewhere in the sector, Renalfa and Eurowind have inaugurated Tenevo, a 242 MWp solar complex with batteries, while Covestro sources 100 MW of offshore wind power for its German sites.

Scatec says Shadwan will be delivered through its integrated model, which combines the TAEF bridge loan with cash flows from its design and construction activities. This approach is intended to limit the group's equity funding requirement. Scatec's chief executive says TAEF's support allows construction to begin with limited capital deployment.

A joint development agreement with EDF

Scatec has also signed a joint development agreement with EDF, targeting a 29% equity stake in Shadwan. The group also plans to invite additional equity partners into the project. Scatec will deliver Engineering, Procurement and Construction (EPC), asset management and operations and maintenance services for both Shadwan and Energy Valley.

Scatec chief executive Terje Pilskog presents Shadwan and Energy Valley as a step in the group's ambition to build a renewable energy portfolio in Egypt. Béatrice Buffon, chief executive of EDF power solutions, says the project marks progress for the company in the country and draws on Egypt's wind resources. She says it will provide competitive, low-carbon electricity.

Long-term financing and timeline

Scatec has signed mandate letters with a consortium of development finance institutions for long-term non-recourse project financing. Financial close for both projects is expected by year end, as is the construction start for Energy Valley. Shadwan will be built in phases, with the first phase expected to reach commercial operation date at the end of 2027.

Nicolas Thevenot, Chief Banking Officer of TAEF, says the financing reflects the institution's commitment to supporting critical energy infrastructure. TAEF describes itself as a multilateral impact financial institution focused on the energy and utility sectors in the Middle East and North Africa region. Established in 1975 by ten Arab oil-exporting countries, it says it operates in over 35 markets and holds a loan portfolio of $6.38 billion, of which about 25% comprises environmental and socially linked projects.