EBRD sees Egypt’s hybrid solar-storage model spreading across MENA

“It serves as a template,” Mortada told pv magazine. “It’s not a one-off.”

The EBRD has financed more than 25 renewable energy projects in Egypt under a contractual framework developed jointly with the Egyptian government in 2016 and 2017, designed from the outset to meet international bankability standards. The Obelisk structure follows that framework: a sovereign-backed, 25-year US dollar-denominated power purchase agreement (PPA) with Egyptian Electricity Transmission Co. (EETC), with battery energy storage system (BESS) dispatch incorporated into the contracted structure, and a termination payment regime covering outstanding debt in the event of buyer default.

The Obelisk solar-plus-storage project in Nagaa Hammadi, Upper Egypt – a 1.1 GW solar plant integrated with a 200 MWh BESS – reached financial close in June 2025. The EBRD provided up to $173.5 million, of which $101.9 million benefited from a European Fund for Sustainable Development first-loss cover guarantee. The African Development Bank (AfDB) provided $184.1 million, structured across four financing windows including the Sustainable Energy Fund for Africa and the Clean Technology Fund, according to the June 15, 2025 joint announcement by the three lenders – the AfDB figures have not been independently verified against the full primary release.

British International Investment (BII) provided $100 million in concessional debt and a $15 million returnable grant specifically to reduce the cost of the BESS component. The European Investment Bank subsequently announced $150 million in additional financing at the project’s inauguration in January 2026. Total blended debt financing amounts to $479.1 million.

Building the pipeline

A second hybrid project using the same structure is already advancing. The EBRD is evaluating up to $70 million for the Nubia Benban project in Aswan – a 200 MW solar plant plus 120 MWh BESS developed by Infinity Power and Hassan Allam Utilities – with board approval anticipated in June 2026. Mortada said two further hybrid projects in Egypt are expected to reach financial close before year-end.

The EBRD is also working with a developer on a larger hybrid project in Egypt, not yet publicly announced, designed to deliver solar power on a 24-hour baseload basis by pairing large-scale solar with sufficient storage to supply power around the clock – which Mortada described as the first of its kind in the region. “Once you get this one right, I think it will be one of many to come,” he said. Scatec has since signed a 25-year PPA for a separate 1.95 GW solar and 3.9 GWh BESS project in Egypt, the largest solar-plus-storage project on the continent.

The bankability of these structures rests on two conditions that the EBRD treats as prerequisites, Mortada said: a contractual framework with sound risk allocation between buyer and seller, and a financially strong offtaker or sovereign backing behind it. In Egypt and Jordan, where transmission system operators are not profit-making entities and electricity tariffs are subject to government subsidies, sovereign guarantees of offtaker obligations are essential for non-recourse financing.

“The most acute risk is the counterparty offtaker risk,” Mortada said. “The sovereign guarantee mitigates this very important risk.”

In a co-lending structure involving multiple development finance institutions (DFI), the lead arrangement varies by transaction. When co-lenders such as the AfDB or International Finance Corp. (IFC) are well-resourced and well-established, the structure is parallel and on equal footing. Smaller lenders tend to remain in a passive role behind a larger anchor institution.

“We hire the same set of advisers that we share between us,” Mortada said. “We’re all sitting on the same side of the table.”

Regional momentum

Battery cost declines over the past three to four years have made hybrid structures economically viable in markets where they were not before, Mortada said. BESS serves two functions in these systems – load shifting, dispatching stored solar generation after sunset to displace thermal fuel consumption, and balancing the intermittency of solar output without burning fuel. For countries heavily dependent on imported oil and gas, both functions reduce fuel costs and supply exposure simultaneously.

Mortada said regional geopolitics are reinforcing the investment case.

“What’s happening right now in the region is a very strong argument as to why the government should even double up and expedite the rollout of renewable energy and hybrid solutions,” he said. “It’s not just a cost issue, it’s availability as well and supply disruption.”

Ember analyst Sam Butler-Sloss has made a comparable observation at the regional level, saying that the Iran crisis is accelerating the transition to renewables and electrification by making fossil fuels more expensive.

Jordan is the next market in the EBRD’s hybrid pipeline. In April 2026, the institution signed a memorandum of understanding with Jordan’s Ministry of Planning, Ministry of Energy, and National Electric Power Co. to support renewable energy and BESS tenders, transmission upgrades, and grid reform. Mortada said the EBRD is starting to see hybrid solar-BESS structures emerge in Jordan – a market with similar characteristics to Egypt: high fossil fuel import dependency and a sovereign-backed offtake framework.

The AfDB did not respond to requests for comment.