Scatec announced on 28 October the signing of 217 million dollars in loans for the first phase of the Dandara project in Egypt. The financing is provided by the European Bank for Reconstruction and Development, the African Development Bank and the European Investment Bank. The Norwegian group also said it is starting construction of the plant.
Located in Qena Governorate, this phase comprises 569 MWc of photovoltaic panels and a 100 MWh battery, according to the EIB. It is to supply renewable electricity to Misr Aluminium Company, or EgyptAlum, which the institution describes as the country's leading aluminium producer.
Loans cover about 80% of the first phase
Scatec values the investment in this first phase at 271 million dollars. The loans cover about 80%. The announcement thus establishes signed financing for this tranche of the project, beyond the preliminary financing conditions presented on 26 October for the Dandara project as a whole.
The EIB stated on 29 October that its contribution could reach 90 million dollars, backed by a European Union guarantee under the EFSD+ facility. It is participating alongside the two other development banks in financing the plant and the associated storage.
Twenty-five-year supply for EgyptAlum
The industrial offtake rests on a twenty-five-year power purchase agreement with EgyptAlum, backed by a sovereign guarantee. The EBRD explains that supply at agreed prices should make the manufacturer's electricity costs more predictable and reduce its exposure to fluctuations in fossil fuel costs.
Exports are also at stake. According to the EBRD's project factsheet, around 60% of EgyptAlum's aluminium sales abroad go to the European Union. Less carbon-intensive electricity should contribute to the environmental competitiveness of this production, an objective that still depends on the completion and operation of the facility.
The deal also includes the entry of the National Bank of Egypt, with an announced stake of 20%. Scatec says it holds 56% of the project following transactions involving that bank and the EBRD. The group plans to bring other investors into the equity and will handle construction, asset management and operation.
Commercial operation of the first phase is targeted for the first half of 2028. Scatec plans to begin construction of the second phase in the first half of 2027.