Japan backs solar+storage project in Egypt with $89m loan

Japanese funding and technical expertise will be lent to Egypt’s promising solar PV sector following the news that the Japanese government is loaning 10 billion yen ($89 million) to support the construction of a large-scale solar PV and storage project near to the city of Hurghada.

The project will comprise a 20 MW solar PV plant and a 30 MW storage facility, which will utilize several different types of battery technology, including lithium-ion and sodium-sulfur batteries.

For its part, Egypt’s government will hold a public tender for the project exclusively for Japanese companies that have demonstrable battery technologies ready to go. Sumitomo Electric Industries and NGK insulators are two such companies that are expected to vie for contracts, thus opening the floodgates for more Japanese investment in the growing MENA region.

A written agreement on the project is expected to be signed at next week’s PV Expo in Tokyo, when Egyptian President Abdel-Fattah el-Sissi is scheduled to visit Japan to discuss the project, which would be the first in Egypt to boast a large-scale storage facility.

Construction costs are expected to mount to around $92 million, and the two governments have established a low interest payback rate for the loan. Japan’s government has been eager to encourage its domestic companies to explore business opportunities in new and emerging markets, particularly in the field of advanced storage batteries – an official growth target announced in 2015 calls for Japanese companies to secure 500 billion yen in revenue for its storage technologies by 2020.

"We want to attract global attention with achievements in Egypt," a government official told The Japan News.

According to the Middle East Solar Industry Association (MESIA), Japan has targeted the correct country – a recent MESIA report says that Egypt could add up to 500 MW of PV in 2016. Meanwhile, government officials in the country are preparing tenders for 30 GW of energy projects, with renewables to the fore as the country seeks to drastically upgrade its energy market.