By Abbas Nazil
The African Development Bank Group (AfDB) has signed a $66 million financing agreement for the first phase of a major solar power and battery storage project in southern Egypt, expected to strengthen industrial competitiveness, reduce carbon emissions and provide cleaner electricity to one of Africa’s largest aluminium producers.
The Dandara project, located in Qena Governorate, will combine a 500-megawatt solar power plant with a 100-megawatt-hour battery energy storage system to provide reliable and cost-effective renewable electricity.
The financing agreement was signed between the Bank Group and Dandara Solar Power S.A.E., a special purpose company owned by Norwegian renewable energy developer Scatec and its partners.
The Bank’s Board of Directors approved the project in July 2026, while the financing package comprises $46 million from the institution’s ordinary resources and $20 million in concessional funding from the Climate Investment Funds’ Clean Technology Fund.
An additional $151 million in debt financing is expected to be mobilised from a consortium of development finance institutions to support the project.
The funds will cover the design, construction, operation and maintenance of the photovoltaic power plant and its integrated battery energy storage system.
The facility is expected to become fully operational in early 2028 and generate approximately 1,373 gigawatt-hours of clean electricity annually.
The Aluminium Company of Egypt, known as EgyptAlum, will serve as the project’s sole electricity off-taker under a 25-year Power Purchase Agreement.
The Egyptian Electricity Transmission Company will support the arrangement by providing for the transmission of electricity generated at the solar facility to the aluminium production plant.
The integration of battery storage is expected to improve the reliability of the renewable energy supply by making solar-generated electricity available during periods of peak evening demand.
The storage system will also help address fluctuations in solar power generation, which depend on the availability of sunlight.
According to the AfDB, the project is expected to prevent approximately 500,000 tonnes of carbon dioxide emissions annually, contributing to Egypt’s efforts to expand renewable energy use and reduce the environmental impact of industrial production.
It is also projected to create about 2,500 jobs during construction and provide 23 permanent positions once operations begin, with particular attention to employment opportunities for women and young people.
Speaking on the investment, AfDB Vice President for Power, Energy, Climate and Green Growth, Dr Kevin Kariuki, said the project demonstrated how combining large-scale solar generation with battery storage could support energy-intensive industries.
He said the investment would strengthen industrial competitiveness, lower carbon emissions and help African manufacturers respond to changing international market requirements.
Kariuki also highlighted the relevance of the project to emerging trade requirements, including the European Union’s Carbon Border Adjustment Mechanism (CBAM), which introduces carbon-related costs for certain imported goods.
The initiative is expected to demonstrate how renewable energy can help manufacturers reduce the carbon intensity of their production processes while maintaining reliable electricity supplies.
For EgyptAlum, securing renewable electricity through a long-term agreement could support its efforts to improve the environmental performance of aluminium production, an energy-intensive industrial activity.
The project also reflects the growing role of battery storage in renewable energy development, particularly in addressing the challenge of supplying electricity when solar generation declines.
The AfDB said the investment aligns with its Ten-Year Strategy for 2024–2033, its Four Cardinal Points strategic vision and its Country Strategy Paper for Egypt.
These frameworks seek to expand access to sustainable energy across Africa and encourage greater mobilisation of commercial capital for investment in the energy sector.
Through the financing arrangement, the Bank aims to support the expansion of renewable energy infrastructure while demonstrating how clean power investments can contribute to industrial development, employment creation and climate action.
