37637
TAQA ARABIA FOR SOLAR ENERGY S.A.E.
May 5, 2016
Egypt, Arab Republic of
Africa
Sep 30, 2022
B - Limited
Active
Approved : Jul 20, 2017
Signed : Oct 11, 2017
Invested : Jun 7, 2018
Solar - Renewable Energy Generation
Infrastructure
Regional Industry - INF Africa
The project is a greenfield 50 MWac photovoltaic (PV) plant being developed by TAQA Arabia (the sponsor) as part of Round 2 of the Egyptian Government feed-in-tariff (FiT) scheme for domestic solar PV and wind energy projects. TAQA Arabia is currently owned by Qalaa Holdings (previously known as Citadel Capital) which IFC has existing investments with. This sponsor will own the project company "TAQA Arabia Solar Energy S.A.E.", and has selected Sterling & Wilson as the Engineering, Procurement, and Construction (EPC) and Operations and Maintenance (O&M) contractor. The total project cost is approximately US$75-80 million with an IFC A loan of US$15-20 million and syndications of up to US$45 million, and the balance 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 a 97-hectare plot (SBN 21-3) located in the third row within the central area 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 underground septic tanks, none of which are yet 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 would be developed by NREA and the Egyptian Electricity Transmission Company (EETC).
Substation SS3 will be initially connected via SS4 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. An additional 180 km double circuit 500 kV transmission line will be constructed north of the site, to evacuate the energy from the solar park. This 500 kV line is considered an Associated Facility (AF) to the solar park, and EETC will be putting out a tender for an ESIA of this transmission line in May 2017.
The project includes the construction of a 1 km underground 22 kV transmission line connecting the project to substation 3 (SS3), the nearest of four EETC high voltage substations, (on the northeastern corner of the Benban PV solar park. Substation SS3 is expected to be fully constructed by December 2017. The underground transmission line right-of-way will follow the route of internal Benban PV solar park roads and be installed by EETC. Substation SS3 will be initially connected via SS4 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 Q2-Q3 2017. Water for the project will be supplied by 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 E&S 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 be comprised of a single axis tracking system of approximately 200,040 PV panels with a nominal capacity of 50 MW AC and a peak capacity of 65.013 MW DC. Power will be sent to an inverter and fed into the utility power grid system through the EETC substation. The Network Connection Agreement (NCA) formed part of the original cost sharing agreement signed on the 30th November 2015. Project procurement and construction will take place by approximately November 2017, 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 600 workers during construction, and 15 workers during operation of the project, as well as 2 security personnel.
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 from 13-17 December 2015, from 7-8 March 2016, and from 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 sponsor TAQA Arabia. IFC reviewed the Environmental Impact Assessment (EIA) issued in February 2016, and the Environmental and Social Management Plan (ESMP) 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 the project level such as on PV panel design.
IFC is involved with six other Qalaa Holdings project companies/funds including 1) Kenya Uganda Rail (#24766); 2) Dewan Petroleum in Pakistan (#24894); 3) NPC Egypt (#28332); 4) ERC Refinery in Egypt (#29128); 5) MENA JI Fund (#27632); and 6) Sphinx Fund in MENA (# 26638). Five of these projects have an E&S performance rating of satisfactory and one partially unsatisfactory. None of the above projects directly involves TAQA Arabia.