Scatec and Egypt Aluminium: A Major Step in Renewable Energy

On March 13, 2025, Scatec ASA, a leading renewable energy solutions provider, signed a groundbreaking 25-year Power Purchase Agreement (PPA) with Egypt Aluminium for a 1.1 GW Solar PV + 100 MW/200MWh Battery Energy Storage System (BESS) project in Egypt. This project, backed by a sovereign guarantee, is set to play a pivotal role in Egypt's ambitious renewable energy goals and Egypt Aluminium's decarbonization efforts.

The project is a significant milestone for both Scatec and Egypt Aluminium. For Scatec, it solidifies its position as one of the leading renewable energy companies in Egypt. For Egypt Aluminium, the largest aluminium producer and industrial electricity consumer in Egypt, the project is instrumental in meeting the EU’s Carbon Border Adjustment Mechanism (CBAM) requirements, which will be introduced in 2026. Approximately 60% of Egypt Aluminium's production is exported to Europe, making compliance with the CBAM crucial for maintaining market access.

The project's estimated total capital expenditure is approximately USD 650 million, with 80% funded by non-recourse project debt and the remainder by equity from Scatec and partners. Scatec owns 100% of the project but is targeting to reduce its long-term economic interest by inviting additional equity partners. Scatec will also serve as the designated EPC service provider, with an EPC share of approximately 90% of total capex, as well as the asset manager (AM) and operations and maintenance (O&M) service provider.

The key next steps for the project include working with the relevant authorities to allocate land, finalise grid connection, and secure financing. Scatec targets to reach financial close and start construction within the next 12 months. The project is expected to significantly boost Egypt's clean energy capacity, aligning with the country's goal of achieving 42% of its energy from renewable sources by 2030.

The inclusion of a Battery Energy Storage System (BESS) in this project enhances its value proposition. The BESS allows for the storage of excess solar energy generated during peak sunlight hours, which can then be used during periods of high demand or low solar generation. This ensures a more stable and reliable power supply, which is crucial for Egypt Aluminium. The BESS is expected to play a pivotal role in decarbonizing Egypt Aluminium's aluminium production by providing a consistent and renewable energy source, thereby lowering its carbon footprint and helping it meet the EU's CBAM requirements.

The project is part of a broader push by Egypt to enhance its clean energy infrastructure. Just last month, the Egyptian Cabinet approved a project with UAE-based renewables developer Masdar to add 1,200 MW of solar energy capacity and 240 MWh of battery storage in Egypt. This project is part of a larger cooperation agreement between Egypt and the UAE to add 4 GW of renewable energy capacity to Egypt’s power grid by next summer. Additionally, Masdar and its partners are working on a massive 10-GW wind project in Egypt and a 4-GW green hydrogen production facility, further cementing Egypt's commitment to renewable energy.



The project faces several potential risks and challenges, particularly in terms of land allocation, grid connection, and securing financing. Delays or complications in these areas could impact the project's timeline and financial viability. However, Scatec's experience and expertise in the renewable energy sector, along with the sovereign guarantee backing the project, position it well to navigate these challenges.

In conclusion, the 1.1 GW Solar PV + 100 MW/200MWh BESS project in Egypt is a significant step towards the country's renewable energy goals and Egypt Aluminium's decarbonization efforts. The project's inclusion of a BESS enhances its value proposition, providing a stable and reliable power supply that is crucial for Egypt Aluminium's operations. While the project faces several challenges, Scatec's experience and the sovereign guarantee backing the project position it well for success. The project is part of a broader push by Egypt to enhance its clean energy infrastructure, aligning with the country's ambitious renewable energy goals.