37591
PHOENIX POWER 1 SAE
May 4, 2016
Egypt, Arab Republic of
Africa
Sep 30, 2022
B - Limited
Active
Approved : Jul 20, 2017
Signed : Oct 9, 2017
Invested : May 15, 2018
Solar - Renewable Energy Generation
Infrastructure
Regional Industry - INF Africa
The project is a greenfield 50 MW photovoltaic (PV) plant for the company “Phoenix Power 1 SAE” as part of Round 2 of the Egyptian Government feed-in-tariff (FiT) scheme for domestic solar PV and wind energy projects. “Phoenix Power 1 SAE” is a Special Purpose Vehicle (SPV) owned by a consortium constituted of Phoenix Power Venture SAL (lead sponsor with 51% shareholding, the “Sponsor”), Infinity Solar Energy SAE (23.8% shareholder), ib vogt GmbH (23.8% shareholder), and Cedrus Enterprises Holding SAL (1.4% shareholder). Phoenix Power Venture is a subsidiary of the Indevco Group which IFC has existing investments with. This SPV constitutes the project sponsors which will own the company “Phoenix Power 1 SAE” to develop the project. The Sponsor has selected ib vogt GmbH as the Engineering, Procurement, and Construction (EPC) and Operations and Maintenance (O&M) contractor. Infinity Solar and ib vogt JV consortium is currently constructing another solar facility in the Benban PV solar park under FiT Round 1 with the same EPC and O&M contractor ib vogt GmbH. The total project cost is up to US$75-80 million with an IFC A loan of up to US$15-20 million and syndications of up to US$45 million, and the balance to be covered by equity.
The project will be located within Egypt’s New and Renewable Energy Agency (NREA)’s 37.2 km2 Benban 1.8 GW PV solar park comprising 39 separate PV plots, situated 12 km west of the nearest village (Benban), and 15 km west of the Nile River. It is 40 km northwest of Aswan city, in the Aswan Governorate of Upper Egypt. The project occupies an 85.7-hectare plot (SBN 32-4) located on the southern boundary of the Benban PV solar park. The Benban PV solar park is being constructed on open desert land that is owned by the Government of Egypt. The area is mainly flat, with sand and gravel dunes, and with no notable natural vegetation and no human activities, and all of the 39 PV development sites are greenfield. Three developers were qualified from Round 1, and one has started some preliminary works and constructed some basic facilities on the site including office, dispensary, workers resting area, and installed septic tanks, which are operational. There are two access roads connecting to the Aswan-Luxor Highway, approximately 1 km away from the solar park. There will also be a road network on-site including a ring road around the Benban PV solar park, which will be developed by NREA and the Egyptian Electricity Transmission Company (EETC).
The project includes the construction of a 1 km underground 22 kV transmission line connecting the project to substation 4 (SS4), the nearest of four EETC high voltage substations, located on the southeastern corner of the Benban PV solar park. Substation SS4 is expected to be full constructed by December 2017. The underground transmission line’s right-of-way will follow the route of internal Benban PV solar park roads and be installed by EETC. Substation SS4 will be connected to the 220 kV high voltage overhead line located approximately 12 km east of the Benban PV solar park, until upgrades are made to the high voltage line. To evacuate the energy produced by the 39 projects located at the solar park, in addition to the underground connections and substations, EETC will also be responsible for designing and building 220 kV overhead transmission lines that will connect the solar park to existing transmission corridors. At a later stage, an additional 180 km double circuit 500 kV transmission line will be constructed by EETC north of the site. EETC will be responsible for the procurement and development of the corresponding environmental and social assessments (ESIAs) for all the elements listed above. All output generated by the project will be sold to EETC under a 25-year Power Purchase Agreement (PPA) to be signed in Q3 2017.Water for the project will be supplied by water trucks and coming from groundwater wells licensed by the Ministry of Water Resources and Irrigation (MWRI). Water distribution in the Benban PV solar park will be managed by the Benban PV solar park’s facilities management company (FMC).
As mentioned in the section on PS1 below, the proposed FMC will be hired to undertake or direct the management of cross cutting construction and operation activities for all the Benban PV solar park on behalf of the solar developers. This approach will assist in ensuring that Environmental, Social and Health and Safety (ESHS) risks are managed consistently and there is a well-managed and coordinated response to overarching cumulative issues such as occupational health and safety, transport / traffic management, security, community engagement and corporate social responsibility, and labor, worker welfare and accommodation, among others.
The project will comprise a single axis tracking system of approximately 187,600 PV panels with a nominal capacity of 50 MW AC and a peak capacity of 63.78 MW DC. Power will be sent to an inverter and fed into the utility power grid system through the EETC substation. The Transmission Connection Agreement (TCA) formed part of the original cost sharing agreement. Project procurement and construction will take place by approximately November 2017 for a period of construction of 12 months, and the plant will be operational for a 25-year period, with options to extend the lease after that date. The FMC will be responsible for managing water and wastewater services, waste management services, logistics and overarching security services, and worker accommodation, all of which will be developed once the FMC is appointed. The project anticipates employing approximately 200 workers during construction, and 20 workers during operation of the project, as well as three security personnel and a team of workers undertaking periodic cleaning of the PV panels during cleaning events.
IFC’s appraisal of the project consisted of two site visits to the Benban PV solar park on 12 December 2015 and on 22 March 2017; appraisal meetings in Cairo, Egypt between 13-17 December 2015, 7-8 March 2016, and between 19-21 March 2017; and finally a review of environmental and social (E&S) aspects through on-site interviews and review of ESHS documents provided. All meetings took place with the project sponsors. IFC reviewed the Environmental Impact Assessment (EIA) issued in February 2016, and the Environmental Management Plan (EMP) contained within it, which cover the construction, operation and decommissioning phases of the project. The findings of the Strategic Environmental and Social Assessment (SESA) non-technical summary commissioned by NREA for the Benban 1.8 GW PV Solar Park, and issued in December 2015, were also considered in this review as were the conditions attached to this approval of the SESA on the 17th March 2016 by the Egyptian Environmental Affairs Agency (EEAA). These conditions generally pertain to the roles and responsibilities of NREA and the facilities management company (FMC) it appoints, as well as requirements at a project level such as on PV panel design.
IFC has previous exposure to the Indevco Group under its investments in 1) UniPak Nile in Egypt (#10292), and 2) IPI in Egypt (#25136, both pulp and paper manufacturing). UniPak Nile has been fully repaid and IFC has exited, and IPI is under supervision with a satisfactory E&S performance rating.