AfDB Approves $66 Million for Major Solar Project in Egypt

African Development Bank Vice President for Power, Energy, Climate and Green Growth Dr Kevin Kariuki described the investment as a strong example of industrial decarbonisation.

The African Development Bank Group (AfDB) has approved a financing package of up to $66 million for the first phase of the 500-megawatt Dandara solar project and a 100MWh battery energy storage system in Egypt's Qena Governorate. The project will finance the design, construction, operation and maintenance of a large photovoltaic power plant equipped with battery storage, helping deliver reliable renewable energy to one of the country's biggest industrial producers.

The Bank's financing includes $46 million from its ordinary resources and $20 million in concessional funding from the Climate Investment Funds' Clean Technology Fund (CTF). Additional financing will be provided by a consortium of development finance institutions, bringing the total project value to more than $290 million.

The Aluminium Company of Egypt (EgyptAlum) will purchase the electricity under a 25-year Power Purchase Agreement, supported by a wheeling agreement with the Egyptian Electricity Transmission Company (EETC). EgyptAlum is one of Africa's largest aluminium producers and has been listed on the Egyptian Stock Exchange since 1997.

Clean Energy and Battery Storage to Cut Emissions

The solar facility is expected to begin full operations in early 2028, producing around 1,373 gigawatt-hours of clean electricity every year. Its integrated 100MWh battery energy storage system will supply renewable electricity during periods of peak evening demand while helping balance fluctuations in solar power generation. The combination of solar generation and battery storage is expected to improve energy reliability for industrial operations.

The project is forecast to reduce annual carbon dioxide emissions by approximately 500,000 tonnes, while total emissions savings over the project's lifetime are estimated at around 12.5 million tonnes. During construction, the development is expected to create approximately 2,500 jobs, with an emphasis on employment opportunities for women and young people. Once operational, the facility will support 23 permanent positions.

Project Supports Industrial Decarbonisation and Green Investment

African Development Bank Vice President for Power, Energy, Climate and Green Growth Dr Kevin Kariuki described the investment as a strong example of industrial decarbonisation. He said the project will help EgyptAlum maintain its competitiveness in European markets by reducing the carbon footprint of its aluminium production, an increasingly important factor following the introduction of the European Union's Carbon Border Adjustment Mechanism in January 2026.

The Dandara project also aligns with the African Development Bank Group's Ten-Year Strategy 2024–2033, its Four Cardinal Points strategic vision and its Country Strategy Paper for Egypt, which promotes greater access to sustainable energy while encouraging private investment in the power sector.

According to Wale Shonibare, Director of Energy Financial Solutions, Policy and Regulation at the African Development Bank, the project represents the largest private corporate power purchase agreement in Egypt and the wider region. He said it will establish an important benchmark for future private investment in industrial decarbonisation and renewable energy projects serving commercial and industrial customers.