African Development Bank Approves $184.1 Million for Egypt’s 1-Gigawatt Obelisk Solar Project

The African Development Bank (AfDB) Board of Directors has announced a $184.1 million financing package to support the development of the Obelisk Solar Project in Egypt. This project is set to become Africa’s largest solar power plant, located in Qena Governorate, Southern Egypt. The 1-gigawatt solar photovoltaic project, paired with a 200-megawatt-hour battery energy storage system, is expected to be fully operational by the third quarter of 2026. This marks a significant milestone in the region’s renewable energy transition.

The Obelisk Solar Project, with a total estimated cost exceeding $590 million, will generate 2,772 gigawatt-hours of clean energy annually for Egypt’s national grid. The Egyptian Electricity Transmission Company will serve as the sole off-taker under a 25-year Power Purchase Agreement, ensuring long-term energy stability. The AfDB’s $184.1 million package includes $125.5 million from ordinary resources, $20 million from the Sustainable Energy Fund for Africa (SEFA), and $18.6 million from the Canada-African Development Bank Climate Fund, a partnership with the Government of Canada. An additional $20 million will come from the Climate Investment Funds’ Clean Technology Fund, with the remainder to be mobilised from a consortium of development finance institutions.

The project’s battery storage system will address peak evening demand and mitigate solar power variability, enhancing grid reliability. It is projected to reduce annual carbon dioxide emissions by approximately one million tonnes and create about 4,000 jobs during construction, alongside 50 permanent roles, with a focus on employing women and youth. This aligns with Egypt’s Nexus of Water, Food, and Energy (NWFE) platform, which granted the project a Golden License, recognising its strategic importance.

Dr Rania Al-Mashat, Egypt’s Minister of Planning, Economic Development and International Cooperation, hailed the project as a “key milestone” under the NWFE programme, launched at COP27 in November 2022. The initiative has already facilitated 4.2 gigawatts of privately financed renewable energy investments, valued at $4 billion, with AfDB support. The NWFE’s energy pillar aims to add 10 gigawatts of renewable capacity and phase out 5 gigawatts of fossil fuel generation by 2030, with investments totalling $10 billion. Al-Mashat emphasised that Obelisk will bolster Egypt’s energy security and advance its goal of achieving 42% of its power generation from renewables by 2030.

Kevin Kariuki, AfDB Vice President for Power, Energy, Climate, and Green Growth, described Obelisk as a “landmark development” that leverages Egypt’s renewable potential and the bank’s leadership. The project supports the AfDB’s Ten-Year Strategy, New Deal on Energy for Africa, and Country Strategy Paper for Egypt, while aligning with SEFA’s mission to accelerate the continent’s energy transition. Wale Shonibare, Director of Energy Financial Solutions at AfDB, highlighted its replicability across Africa, balancing energy security, affordability, and sustainable development.

The project reflects strong international backing, with Canada playing a pivotal role. Ambassador Ulric Shannon expressed pride in supporting Egypt’s solar energy development, noting its contribution to energy stability and a low-carbon economy. The initiative’s environmental benefits are significant, with its one-million-tonne annual CO₂ reduction supporting global climate goals. This aligns with Egypt’s commitments under the Paris Agreement and its role as a leader in North Africa’s renewable energy sector.

Construction is expected to commence soon, with job creation focusing on local communities in Qena. The project’s emphasis on women and youth employment addresses regional unemployment challenges, while the battery storage innovation sets a precedent for future solar developments across the continent. The AfDB’s involvement also signals confidence in Egypt’s economic resilience, despite challenges like currency depreciation and energy shortages.

The Obelisk project positions Egypt as a renewable energy hub, potentially attracting further investment. Its success could inspire similar initiatives in countries where solar potential is high. As the Obelisk Solar Project moves toward completion in 2026, it promises to transform Egypt’s energy landscape and set a benchmark for Africa’s renewable sector. With $590 million in total funding and robust international support, the initiative could drive economic growth, reduce emissions, and enhance energy access, though overcoming logistical and economic challenges will be critical. The AfDB and Egypt’s partnership offers a model for sustainable development, with global implications for the continent’s green future.