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Scatec and the EBRD, EIB and AfDB have signed a $217 million non-recourse financing agreement for the first construction phase of the Dandara solar-plus-storage project in Egypt. The full project is valued at $650 million and is planned to supply Egypt Aluminium under a 25-year power purchase agreement; construction of the second phase is targeted for the first half of 2027.
Scatec and the EBRD, EIB and AfDB have signed a US$217 million non-recourse financing agreement for the first phase of a planned US$650 million solar-plus-storage project in Nag Hammadi, Egypt. The Dandara project is intended to supply electricity to Egypt Aluminium, the country’s largest industrial electricity consumer, under a 25-year power purchase agreement.
The financing covers about 80% of the first of two construction phases, according to the project information reported by Energy-Storage.News. The overall plan comprises 1GW of solar photovoltaic capacity and a battery energy storage system rated at 100MW/200MWh. The three banks’ financing is non-recourse, meaning repayment is structured around the project rather than a general guarantee from Scatec, as described in the report.
The African Development Bank is set to provide up to US$66 million of the financing: US$46 million from its ordinary resources and US$20 million in concessional funding from the Climate Investment Funds’ Clean Technology Fund. The report does not give a breakdown of the remaining US$151 million among the EBRD and EIB.
An Egyptian state announcement put the project’s total investment value at US$650 million. Scatec has said it expects the project to generate 1.4TWh of electricity a year when complete. The company holds a 56% stake in Dandara and plans to provide engineering, procurement and construction services, asset management, and operations and maintenance through its own teams.
Power Supply for Egypt Aluminium
The project would give Egypt Aluminium a dedicated renewable electricity supply through a long-term contract, linking a large industrial user’s power needs with new solar generation and battery storage. For the company, the development is relevant to both energy supply and the emissions associated with production.
When the power purchase agreement was signed in March 2025, Scatec estimated emissions reductions of more than 550,000 tonnes of CO₂ per year and said the project could help Egypt Aluminium meet requirements under the European Union’s Carbon Border Adjustment Mechanism. That is a company estimate and stated rationale; the reported financing agreement does not independently verify the projected emissions reduction or confirm the buyer’s future compliance.
The financing commitment also brings development-bank capital into a large-scale clean-energy project in Egypt. The planned battery is part of the project design, but the available report does not specify how it will be dispatched, how long it will supply power at a given output, or how its operation will align with the aluminium producer’s demand.
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From Power Contract to Financing
The project’s route to financing began before the current agreement. In October 2025, Dandara Solar Energy Company, a Scatec subsidiary, signed a letter of intent with the three finance institutions for development financing, with Norwegian and Egyptian state officials present, according to the report. The power purchase agreement with Egypt Aluminium followed in March 2025, establishing the intended buyer and contract term.
The financing agreement was signed at an event on October 26, 2026, attended by Egyptian Prime Minister Mostafa Madbouly and Electricity and Renewable Energy Minister Mahmoud Esmat. Scatec provided additional details on October 28. Separate agreements at the event covered connection of the project to Egypt’s national grid and a contribution to the project company by the National Bank of Egypt.
Scatec has said it expects to fund the broader project through a combination of 80% non-recourse financing and equity for the remainder. It holds 56% of Dandara, including a portion connected to a US$221 million renewable energy investment platform agreed with the EBRD, according to the report. The developer is seeking additional investors and equity bridge loans, with equity injections planned to be deferred until construction ends.
“The company aims to begin construction of the second phase in the first half of 2027.”
— Scatec
Costs, Equity and Construction Timing
The signed US$217 million financing agreement covers about 80% of the first phase, not the entire US$650 million project. The report does not set out the full phase-by-phase construction schedule, the amounts committed by the EBRD and EIB individually, or the final equity contributions from Scatec and other investors.
Scatec is still seeking further investors and equity bridge loans, according to the report. The terms and timing of those arrangements are not specified. The project’s reported annual output and emissions savings are projections; the available information does not give a commissioning date or confirm when Egypt Aluminium will begin receiving electricity.
Grid Connection and Second Phase
The next steps include arranging the project’s connection to Egypt’s national grid, completing the remaining financing and equity arrangements, and advancing construction. Scatec’s stated target is to start the second phase in the first half of 2027; that remains a company target rather than a confirmed construction start.
Further updates will be needed to establish when the first phase begins building, how the battery and solar facilities will be delivered, and when the project can start supplying power under the 25-year agreement with Egypt Aluminium.
Key Questions
How much financing has been signed?
Scatec and the EBRD, EIB and AfDB signed a US$217 million non-recourse financing agreement for the first phase. The full project’s reported investment value is US$650 million.
What will the Dandara project include?
The plan comprises 1GW of solar PV and a 100MW/200MWh battery energy storage system, built in two phases. Scatec expects annual generation of 1.4TWh when the project is complete.
Who is expected to buy the electricity?
Egypt Aluminium is the intended buyer under a 25-year power purchase agreement signed in March 2025. It is described in the report as Egypt’s largest industrial electricity consumer.
When is construction expected to start?
Scatec aims to begin construction of the second phase in the first half of 2027. The source does not provide a confirmed start date for construction of the first phase.
Is the emissions reduction confirmed?
No. The estimate of more than 550,000 tonnes of CO₂ avoided per year was attributed to Scatec when the power agreement was signed. It is a projection, not a verified result reported at the time of the financing agreement.
Source: energy-storage.news
