Norwegian renewable energy company Scatec has started constructing the 1.1 GW Obelisk solar project in Egypt and a 100 MW/200 MWh battery energy storage system, the company said in a statement on May 5. The project will have an estimated cost of $590mn. 

The electricity will be sold under a 25-year USD-denominated Power Purchase Agreement (PPA) with the Egyptian Electricity Transmission Company (EETC). It will be backed by a sovereign guarantee.

The project will be built in two phases. The first phase includes 561MW solar facility and a 100 MW/200 MWh battery and will be operational in H1 2026. The second phase will have 564MW solar capacity and will be operational in H2 2026.

Scatec has secured $120mn in equity bridge loans, including $90mn from the Arab Energy Fund and $30mn from the European Bank of Reconstruction and Development (EBRD).  Scatec is also in advanced talks with equity partners. The total capital expenditure (capex) is approximately $590mn and will be 80% financed by non-recourse long-term debt.

Scatec will provide Engineering, Procurement, and Construction (EPC), asset management, and O&M services. The EPC scope will account for about 70% of the total capex.

“We are proud to break ground on Egypt’s first hybrid solar and battery project, building on our proven track record with similar developments. Egypt has ambitious targets to build out significant renewable energy capacity in the coming years, and this milestone further strengthens Scatec’s position as a leading renewable energy producer in the country,” Scatec CEO Terje Pilskog said. 

In mid-March this year, Scatec said it signed a 25-year USD-denominated corporate Power Purchase Agreement (PPA) with Egypt Aluminium to establish a main solar project in Egypt. The project included a 1.1GW Solar PV plant combined with a 100 MW/200 MWh Battery Energy Storage System (BESS).