The Asian Infrastructure Investment Bank (AIIB) announced Tuesday that it would provide up to 210 million U.S. dollars in debt financing to tap renewable energy in Egypt.
The project will consist of 11 greenfield solar power plants with an aggregate capacity of 490 MW, according to an AIIB statement.
"We are supporting this project because it contributes to Egypt's renewable energy capacity and will help position the country as a regional energy hub, which will have economic benefits for the entire region," said D.J. Pandian, AIIB vice president and chief investment officer.
This solar power project will increase Egypt's power generation capacity, reduce the country's dependence on gas and fuel for electricity generation, and will help the country meet its commitments under the Paris Climate Agreement as it moves towards an environmentally sustainable energy mix, according to the AIIB.
Egypt's huge solar resources, together with its strategic vision for green growth, will allow this project to generate global environmental benefits by avoiding greenhouse gas emissions of more than half a million tons of CO2 per year.
The program will increase Egypt's generation capacity so it can export energy during peak hours and improve its connectivity in the Middle East, Asia, Europe and Africa, the AIIB statement said.
The project will be co-financed by AIIB and the International Financial Corporation, and is attracting additional lenders from the private sector and bilateral financial institutions, according to the statement.
As of July, the AIIB has approved a total of 2.8 billion dollars in loans for 17 projects.
With 80 members so far, the Beijing-based AIIB was officially established in December 2015 and was opened for business in January 2016. China is the largest shareholder of the AIIB with 27.5 percent of voting rights.
On July 18 this year, S&P Global Ratings announced it had assigned AIIB "its highest possible rating and a stable outlook," following top-notch credit ratings from Moody's on June 29 and Fitch on July 13.