Norwegian renewable energy developer Scatec has secured approximately €195 million in development-bank financing for a solar and battery storage project that will supply Egypt Aluminium. The project combines 569 MW of solar generation with 100 MWh of battery storage and is intended to support industrial decarbonisation and European metals trade.
Financing and project delivery
The financing package from the European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD) and African Development Bank (AfDB) will cover approximately 80% of the estimated €243 million investment needed for the first phase.
The project will supply electricity to Egypt Aluminium under a 25-year power purchase agreement (PPA) backed by a sovereign guarantee. The EIB is contributing up to €80.9 million, with support from an EU guarantee under the Global Gateway framework.
The financing agreements have been signed, moving the project from preliminary development and lender interest to contracted financing. The announcement does not establish that the entire package has been disbursed. Construction is moving forward, with commercial operations expected to begin in the first half of 2028.
Renewable electricity and industrial emissions
Scatec expects the project to produce approximately 1.4 TWh of electricity each year and avoid more than 550,000 tonnes of carbon dioxide emissions annually.
The project investment is significant for Egypt Aluminium, where electricity use accounts for an important part of the industrial carbon footprint. Aluminium production requires substantial amounts of energy, making access to renewable electricity increasingly relevant to operating costs and international competitiveness. The long-term supply agreement is designed to provide the producer with dedicated renewable power and reduce its reliance on higher-carbon electricity generation.
The development illustrates how development-finance institutions are supporting industrial decarbonisation through energy infrastructure, rather than focusing exclusively on renewable generation for general electricity markets. For established industrial producers, renewable electricity can help address environmental requirements and the growing commercial importance of product-level emissions.
CBAM and European aluminium exports
Approximately 60% of Egypt Aluminium’s exports are estimated to go to the European Union, giving the project relevance beyond Egypt. The EU’s Carbon Border Adjustment Mechanism (CBAM) includes aluminium among the products subject to carbon-related import requirements, increasing the importance of measuring and managing production emissions.
Replacing higher-carbon electricity with solar generation could improve the emissions profile of aluminium supplied to European customers and potentially strengthen the producer’s competitive position in that market. The precise CBAM impact will depend on the applicable calculation methodology, independently verified emissions data and how the mechanism treats electricity-related emissions.
The project’s projected environmental benefits should not, therefore, be taken as confirmation of a reduction in the carbon costs of Egypt Aluminium’s exports to Europe. Any commercial advantage will depend on how the renewable electricity is accounted for and reflected in verified industrial emissions.
Development finance and industrial energy transition
The financing brings European and multilateral development institutions together to link renewable energy investment with industrial competitiveness. While European critical raw materials policy often focuses on mining and mineral extraction, industrial supply chains also rely on energy-intensive processing facilities, including smelters and refineries that can meet increasingly demanding environmental standards.
Aluminium production is particularly exposed to electricity costs and carbon intensity because of its substantial power requirements. Competitively priced renewable electricity can affect both operating economics and producers’ ability to retain access to European markets. For Egypt Aluminium, the project offers the prospect of a more sustainable electricity supply and a stronger position in export markets where embedded emissions are becoming a more important commercial consideration.
For Scatec, the 25-year, sovereign-guaranteed PPA provides a long-term industrial customer and supports the renewable energy investment’s revenue structure. Signed financing agreements substantially reduce the project’s remaining funding uncertainty, although construction, capital deployment and eventual electricity delivery remain key milestones. Its eventual effect on European aluminium trade will depend on renewable electricity being delivered and emissions performance being independently verified.