The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed on November XX a loan agreement in project financing1 amounting to up to approximately USD 281 million (JBIC portion) with AMUNET WIND POWER COMPANY S.A.E. (AMUNET) of Egypt, invested in by, inter alia, Sumitomo Corporation and AMEA Power of the UAE, for an onshore wind farm project. The loan is co-financed with International Finance Corporation (IFC), Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, and Standard Chartered Bank, bringing the total co-financing amount to approximately USD 518 million. Nippon Export and Investment Insurance (NEXI) will provide the insurance for the loan by the private financial institutions. In June 2020, JBIC signed a memorandum of understanding (MOU) with IFC to enhance cooperation between the two organizations2. This is the first co-financing with IFC since the signing of the MOU.
In this project, AMUNET will build, own, and operate a 500 MW onshore wind farm in Ras Ghareb within the Red Sea Governorate along the shore of the Gulf of Suez, 230 km southeast of Cairo, the capital of Egypt. AMUNET will also sell the electricity generated by the wind farm to Egyptian Electricity Transmission Company for a duration of 25 years.
In the Infrastructure System Overseas Promotion Strategy 2025 (supplemented in June 2022), the Government of Japan, in support of the transition to carbon neutrality and decarbonization, established the policy of providing support for quality energy and electricity infrastructure that harnesses sophisticated technologies to reduce the burden on the environment in a way that is compatible with the energy policy of the host countries. The loan is in line with this policy and will financially support an overseas infrastructure project where a Japanese company has invested and will be involved in its operation and management for a long term, thereby contributing toward maintaining and improving the international competitiveness of Japanese industry.
Also, in the Tunis Declaration released at the Eighth Tokyo International Conference on African Development (TICAD 8) in August 2022, the Government of Japan calls for the promotion of Japans Green Growth Initiative with Africa (GGA), which aims to achieve structural change toward low greenhouse gas (GHG) emissions and green growth reflecting the different circumstances of each African country through public-private partnership in order to mobilize financial resources in climate adaptation and mitigation, including the collaboration with multilateral development banks. The project, including the co-financing with IFC, is in line with this initiative of the Government of Japan for Africa.
The Government of Egypt aims to increase renewable energy in the energy mix to 35% by 2030, as stated in the Egypts Vision 2030 document released in 2015, and 42% by 2035, as articulated in the Integrated Sustainable Energy Strategy to 2035 adopted in 2016, in order to reduce its dependence on thermal power. Furthermore, in June 2022, the Government released its nationally determined contribution of a 30% reduction in GHG emissions by 2030 through multiple initiatives including the promotion of renewable energy. The project will contribute toward the energy transition the Government of Egypt aspires to.
As Japans policy-based financial institution, JBIC will continue to provide financial support to assist Japanese companies in the overseas expansion of their infrastructure businesses toward decarbonization by drawing on its various financial facilities and schemes for structuring projects and by performing its risk-assuming function.