Page 8 - AfrElec Week 40 2021

AfrElec COMMENTARY AfrElec

Egypt benefits from EBRD

green investment

EGYPT A key way to save the world from climate “The message Benban sent to investors was:
catastrophe is to persuade the private sector to ‘you can come to this country, you can find the
spend the necessary trillions in the green invest- technical expertise you need, you are going to be
ment required. treated fairly by the government and you have
In order to reach net zero by 2050, the current a viable long-term project’. That got all these
target date promoted by the Paris Agreement, investors in, and gave them confidence,” says
the whole global economy needs to be moved Boyd-Carpenter.
over to renewables energy, the European Bank The success at Benban benefited from two
for Reconstruction and Development (EBRD) policies that the EBRD promotes, according to
said. Boyd-Carpenter.
“Of course this has to involve the private sec- One is a reliable policy framework in the
tor,” says the EBRD’s Harry Boyd-Carpenter. country where an investment is made “for gov-
“You need huge investment. Today’s energy mix ernments to really get on board and say: ‘we’ve
is round about 80-83% hydrocarbons. By 2050 signed up to net zero’, or ‘we’ve produced an
we have to be at zero percent. It’s an extraordi- ambitious Nationally Determined Contribu-
nary rewiring of the economy.” tion (NDC)’, and then, ‘What does that mean?
Boyd-Carpenter stressed that the private sec- What’s the policy we need to change in our steel
tor is already keen to invest in green issues, but sector? What’s the signal we need to send inves-
needs the right conditions and support in order tors in transport?’ And that takes time. That’s an
to make investment attractive. area we are putting a lot of effort into.”
The EBRD’s view, he adds, is that “the trick is The second is catalytic finance to de-risk the
really to create the right enabling environment. investment – the kind of finance that the EBRD
That’s still missing in a lot of places.” provides.
He gave Egypt as an example of how the With an enthusiastic pool of investors now
EBRD’s engagement in developing solar power in place, Egypt has moved to a still more mar-
demonstrated how private investment can invest ket-friendly approach – competitive auctions
in renewables with confidence. rather than fixed-rate FiTs, driving prices lower
still.
Egypt “When they’ve run these competitive pro-
A 2012 crisis in the Egyptian energy sector cesses, they’ve been getting fantastic prices
prompted the government to make more use of – solar under two-and-a-half US cents, wind
its abundant solar and wind resources. between three and four US cents per kWh,” says
Egyptian officials initiated a feed-in tariff Boyd-Carpenter.
(FiT) scheme for solar power and concentrated “The electricity price at Kom Ombo, the
it all on one very big site in southern Egypt. Then next big solar project financed by the EBRD in
they came to the EBRD for advice on how to Egypt, earlier this year, is less than a third of the
make the scheme attractive to private investors. price of Benban per MWh, because it was done
Two years of work on bankability later, the competitively.”
37-square km, 1.5-GW Benban solar park Separately, Egypt has decided not to invest
attracted strong investor interest, with 80 pri- in coal. Adds Boyd-Carpenter: “That’s partly a
vate sector candidates shortlisted and about 20 climate decision, but it’s also partly a pragmatic
selected to set up projects. The EBRD was the economic decision. Solar is cheaper. Why would
biggest lender. Benban was completed in 2019. you pay twice the price?”™

P8 www. NEWSBASE .com Week 40 07•October•2021