Egyptian Prime Minister Mostafa Madbouly witnessed the signing of preliminary financing terms for a $650Mn solar power project in Nag Hammadi, Qena Governorate, Upper Egypt, with a planned capacity of one gigawatt (GW), according to a cabinet statement on October 26.

The project will also include a battery energy storage system with a capacity of 200 megawatt-hours (MWh). It will be developed in two phases, each comprising 500 megawatts (MW) of solar capacity and 100 MWh of battery storage, the statement said.

Norway’s Scatec signed the agreement with the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the African Development Bank (AfDB). Separate agreements covered grid connection and the National Bank of Egypt’s participation in the project company.

The project aims to supply about one-third of the electricity needs of Egypt Aluminium, a subsidiary of the Metallurgical Industries Holding Company (MIH).

The development is expected to reduce carbon emissions from aluminum production and improve the competitiveness of Egyptian exports amid tightening environmental requirements in international markets.

The agreements mark a step towards completing financing and implementation arrangements for the project, reflecting cooperation between the Egyptian government, Scatec, international financial institutions, and domestic banks to expand renewable energy use in industry.