Scatec has signed loan agreements totalling $217 million for the first phase of its Dandara solar and battery storage project in Egypt and has started construction, the Norwegian developer said. The first phase combines a 569 megawatt solar plant with a 100 megawatt hour battery system at Nagaa Hammadi, supplying Egypt Aluminium under a 25 year power purchase agreement backed by a sovereign guarantee.
The debt is non recourse project financing from three development lenders, the European Bank for Reconstruction and Development, the African Development Bank and the European Investment Bank, and covers about 80 percent of the phase’s estimated capital cost of $271 million. Scatec will provide the engineering, procurement and construction work, about 80 percent of total capex, plus asset management and operations and maintenance services.
Ownership is being syndicated as construction begins. The National Bank of Egypt has taken a 20 percent stake in the project under a partnership agreement, and after that transaction and a recent EBRD platform transaction, Scatec holds 56 percent, split between 36 percent through the EBRD platform and 20 percent outside it. Scatec said it intends to bring in further equity partners and to use equity bridge loans so its own equity contribution is deferred until the end of construction.
Commercial operation of the first phase is targeted for the first half of 2028, with construction of the second phase expected to start in the first half of 2027. The plant’s purpose is industrial: Egypt Aluminium needs contracted renewable power to keep its metal saleable into markets that are pricing the carbon content of aluminium.