Scatec has entered into a power purchase agreement (PPA) with the Egyptian Electricity Transmission Company (EETC) for 1.95GW of solar power and 3.9 gigawatt-hours (GWh) of battery energy storage systems (BESS) in Egypt.
This agreement will see Scatec build a single, integrated solar and BESS hybrid facility designed to deliver steady, 24/7 renewable baseload power.
In addition, Scatec will develop two separate, stand-alone BESS projects that will focus on providing critical grid stability and support services.
Together, these developments are said to constitute the largest investment in Scatec’s history.
Scatec CEO Terje Pilskog said: “Signing this groundbreaking PPA further cements Scatec’s leading position and commitment to delivering reliable, renewable energy at a large scale in Africa.
“By integrating advanced solar and battery technologies, we are providing Egypt with sustainable, around-the-clock power and grid stabilising services, supporting both the country’s energy transition and the region’s long-term economic development.”
Scatec will receive compensation under a 25-year, US dollar-denominated, pay-as-produced PPA based on the actual electricity output of the hybrid system.
The plant is projected to generate around 6,000GWh of renewable energy per year.
Scatec will handle engineering, procurement and construction (EPC), asset management and operations and maintenance for the projects.
The company said that it will draw on its track record of comparable large-scale hybrid and BESS projects to ensure effective execution and management across all project phases.
As the projects’ lead developer, Scatec will bring in additional equity partners. Information on capital expenditure, EPC scope and the financing structure will be released at financial close, which is anticipated in the latter half of this year.
In a related development, Reuters reported that Sungrow plans to set up a factory in the Suez Canal Economic Zone to produce energy storage batteries. Part of the factory’s output is designated for Scatec’s project, according to a statement from the Egyptian cabinet.
Egypt has set a target for renewable sources to contribute 42% of its electricity generation by 2030, but officials have warned that this objective could be jeopardised without greater international assistance.
In September last year, Scatec finalised a 15-year PPA with BTG Pactual Comercializadora de Energía, a branch of Banco BTG Pactual Brazil, for a solar power plant in Colombia.
