Scatec ASA has commenced construction of its 1.1 GW Obelisk solar and 100 MW/200 MWh battery storage project in Egypt. The energy will be sold under a USD-denominated 25-year Power Purchase Agreement (PPA) with the Egyptian Electricity Transmission Company (EETC), backed by a sovereign guarantee.

The project will be constructed in two phases. The first phase of 561 MW solar + 100 MW/200 MWh battery storage is targeted to reach commercial operational date (COD) in the first half of 2026 and the second phase of 564 MW solar in the second half of 2026.

Scatec has also signed equity bridge loans (EBL) of USD 120 million for the project, postponing the project equity injections to the end of the construction period. A USD 90 million EBL will be provided by The Arab Energy Fund with maturity in the second quarter 2028 and another USD 30 million EBL by the European Bank for Reconstruction and Development (EBRD) with maturity in the first quarter 2027.

Scatec has further signed a mandate letter with a consortium of development finance institutions for the long-term non-recourse project debt at attractive terms, with financial close expected in the next few months. The company is also in advanced discussions with potential equity partners, expected to conclude in the same timeframe.

 “We are proud to break ground on Egypt’s first hybrid solar and battery project, building on our proven track record with similar developments. Egypt has ambitious targets to build out significant renewable energy capacity the coming years, and this milestone further strengthens Scatec’s position as a leading renewable energy producer in the country,” says Scatec CEO Terje Pilskog.

Total capex for the project is approximately USD 590 million to be partly financed by a targeted 80% non-recourse long-term project debt. Scatec will deliver Engineering, Procurement and Construction (EPC), Asset Management (AM), and Operations & Maintenance (O&M) services for the project. Scatec’s EPC scope is approximately 70% of total capex, reduced from previous communication due to optimisation of the EPC structure but with unchanged gross profit to Scatec.