Lekela Egypt Wind Power BOO S.A.E.

Project description

This summary covers an application by Lekela Power B.V. (Lekela) of The Netherlands for its (or one or more of its subsidiaries’/affiliates’) equity, shareholder loan, and/or quasi-equity investments in the Lekela Egypt Wind Power BOO S.A.E. wind farm project in the Arab Republic of Egypt. The investor seeks cover for up to USD 170 million against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract for a guarantee period of up to 20 years.

The project consists of the development, construction, operation, and maintenance of a 250 MW greenfield wind farm (the “Project”).  The Project will be an Independent Power Producer, generating an average of 1120 GWh annually for sale to the Egyptian Transmission Company (“EETC”) under a 20-years Power Purchase Agreement. The electricity produced by the Project will be injected into the national grid and sold to Egyptian end-consumers by EETC.  The payment obligations of EETC will be guaranteed by the Government of Egypt represented by the Ministry of Finance.  Construction is expected to begin in March 2019 and operations two years later.

The Project in located the Gulf of Suez area of Egypt in Gebel El Zeit approximately 30km north-west of Ras Ghareb on the Red Sea.  The site is largely uncultivated and uninhabited.

Environmental Categorization

The project is a category A under MIGA’s Policy on Environmental and Social Sustainability.  This is a joint project with IFC; in accordance with MIGA AIP, the MIGA disclosure is linked to IFC disclosure.  Click here to view the Environmental and Social Review Summary prepared by the International Finance Corporation for their proposed support to the project, thereafter updated by the International Finance Corporation on May 23, 2019.

Development Impact

The Project’s development impact includes improved energy generation capacity, efficiency and diversification, enabling improved service delivery to Egypt’s population. It has the potential to support Egypt's power system reliability by adding ca. 1120 GWh of generation capacity per annum, while diversifying the country's fuel mix and mitigating Green House Gas emissions by displacing over 500,000 tons of carbon dioxide per annum in support of Egypt's Paris Agreement commitments. Power generated will support the stability of Egypt’s energy system, enabling dispatch from the lowest cost units, permitting fleet efficiency improvement projects, and facilitating regional energy trade. Finally, the Project will source equipment and employees locally, supporting Egypt’s aspiration to become a regional hub for manufacturing and training in the renewable energy sector.