ICBC contributes $70 million to syndicated loan for 3 solar power plants in Benban Solar Park

On October 18, 2017, the Industrial and Commercial Bank of China (ICBC) and the European Bank for Reconstruction and Development (EBRD) issued a $140 million syndicated loan to Alcom Energy JSC — a special purpose vehicle and project company that is owned by ACWA Power, Al Tawakol Electrical Co. incorporated in Egypt (Al Tawakol), and Hassan Allam Holding incorporated in Egypt (Hassan Allam) — for the construction of 3 solar power plants in Benban Solar Park. Both the ICBC and ERBD contributed USD $70,000,000 as lead arrangers of the loan. The loan has a maturity length of 18 years. Its interest rate and grace period are unknown. On December 15, 2017, Multilateral Investment Guarantee Agency (MIGA) signed a contract in which it agreed to issue guarantees of $42,046,560 to ICBC for its investment into Alcom Energy JSC. The guarantees are issued for up to 20 years against the risks of Transfer and Convertibility Restrictions, Breach of Contract, Expropriation and War and Civil Disturbance. The purpose of the syndicated loan from ICBC and EBRD is to develop, construct, and commission three solar power plants in Beban Solar Park (محطة بنبان للطاقة الشمسية) within Aswan Governorate. The 3 power plants will have a combined capacity of 165.5 MW (67.5 MW, 70 MW and 28 MW, respectively) at the 1.8 GW Benban Solar Park (or Complex). The project is expected to produce power for 80,000 homes as well as reduce Co2 emissions by 156,000 tons annually. All of the solar projects are being developed under Egypt’s Feed-in Tariff (FiT) scheme. ACWA Power was granted a 25-year Power Purchase Agreement (PPA) and it will sell the power generated by the three solar plants to the state-owned Egyptian Electricity Transmission Company (EETC) (the off-taker). The project is allocated to plot 3-1 (approximately 97 hectares (Ha)) in the Benban complex. The project will have alternating current capacity of 50 MWAC and peak direct current capacity of 70MWDCP, and will be linked to substation 1 (SS1) on the northeastern corner of the Benban complex via an underground 22 kilovolt (kV) transmission line following the internal routes right-of-way (RoW) installed by EETC. SS1 covers an area of 15 km2. The Benban solar complex comprises a 37-square kilometer (km2) area allocated to Egypt's New and Renewable Energy Agency (NREA) located in the western desert, 15 km west of the River Nile and approximately 1 km west of Aswan – Luxor highway. The complex is approximately 650 kilometers (km) from Cairo. With the exception of the narrow and densely populated Nile Valley with its intensive agriculture, the area is all desert land, largely unused and unpopulated. The area is mainly flat, with sand and gravel dunes, and with no notable natural vegetation and no human activities. The nearest villages are Benban village, about 12 km east and Fares village about 25 km northeast of the Benban solar complex, with 26,200 and 11,000 inhabitants respectively. The nearest cities are Aswan, 40 km south and Luxor 140 km north. The Benban solar complex was sub-divided into 39 plots each allowing for a solar plant of up to 50 megawatts (MW) with a total capacity for the entire site of up to 1.8 Gigawatts (GW). As per Government of Egypt (GoE) requirements, each plot in the Benban solar complex is allocated to a separate project company, requiring separate permits to operate; although one company may have ownership stakes in more than one project. Power evacuation will be the responsibility of EETC. Power will be evacuated from the new substations via an existing 220 kV high voltage line, 12 km east of the Benban solar complex. The total cost of this project is $185 million. $140 million is being provided via debt financing and $5 million is being provided via equity contributions. A consortium of Astroenergy and CGGC (China Gezhouba Group Corporation) International is the Engineering, Procurement, and Construction (EPC) contractor and First National Operation & Maintenance Co. Ltd (NOMAC) — a fully owned subsidiary of ACWA Power — is the Operations and Maintenance (O&M) contractor. On January 7, 2018, this project reached financial closure. According to ACWA Power, the 3 solar power plants became commercially operational during the third quarter of 2019.

Additional details

1. This project is also known as the ACWA Solar Power Plant Project or ACWA Benban Solar Project. 2. This project was one of the first fully non-recourse project financed transactions in Egypt since the late 1990s – and the only feed-in-tariff (FiT) project financing to attract a pure commercial bank. It was also the first non-recourse project-financed transaction in Egypt across sectors for any Chinese bank, and the first fully non-recourse deal in the power sector in the African continent for ICBC. It was awarded several international prizes, such as the “2017 Global Multilateral Deal” by PFI and the “Project Finance Deal of 2018” by Bond, Loan & Sukuk Middle East. 3. This project should not be confused with Project ID#57855, which captures a $60 million contribution by ICBC to a syndicated loan the construction of three additional solar photovoltaic power plants in the Benban Solar Park.

Number of official sources

10

Number of total sources

15