Egypt Aluminium will receive renewable electricity from a planned solar and battery project supported by approximately €195 million in financing. Norwegian renewable energy developer Scatec has signed financing agreements with development banks for the project’s first phase. The electricity supply is set to be provided under a long-term power purchase agreement.
Solar and battery capacity under a 25-year power purchase agreement
The project combines 569 MW of solar generation with 100 MWh of battery storage. Electricity will be supplied to Egypt Aluminium through a 25-year PPA backed by a sovereign guarantee. Scatec expects the facility to generate about 1.4 TWh of electricity annually.
The developer also expects the project to prevent more than 550,000 tonnes of carbon dioxide emissions each year. Construction is described as underway, with commercial operations expected to start in the first half of 2028. The announcement does not confirm whether the full financing package has already been disbursed.
EIB, EBRD and AfDB support for first-phase investment
The financing package is provided by the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the African Development Bank (AfDB). It is intended to cover approximately 80% of an estimated €243 million investment required for the first phase. The EIB contribution is up to €80.9 million.
The EIB amount is supported by an EU guarantee under the Global Gateway framework. Scatec said the financing agreements have been signed, moving the project from preliminary development and lender interest to contracted financing. Remaining steps include construction, capital deployment, and delivery of electricity.
Electricity supply role in aluminium production emissions
For Egypt Aluminium, electricity consumption is described as an important part of its industrial carbon footprint. Aluminium production requires substantial energy, making access to renewable electricity relevant to operating costs and international competitiveness. The long-term agreement is intended to provide dedicated renewable power and reduce reliance on higher-carbon electricity generation.
The project investment is positioned around industrial decarbonisation through energy infrastructure rather than renewable generation for general electricity markets. For established industrial producers, renewable electricity can address environmental requirements alongside the growing commercial importance of product-level emissions. The project’s effect depends on delivery of renewable electricity and independently verified emissions performance.
EU CBAM implications for aluminium exports
The project has implications for trade with the European Union because an estimated 60% of Egypt Aluminium’s exports are destined for the bloc. The EU’s Carbon Border Adjustment Mechanism (CBAM) includes aluminium among goods subject to carbon-related import requirements. This increases the importance of measuring and managing production emissions.
The mechanism’s impact depends on applicable calculation methodology, independently verified emissions data, and how electricity-related emissions are treated. The announcement notes that projected environmental benefits should not be treated automatically as established reductions in carbon costs for Egypt Aluminium’s EU exports. Any commercial advantage would depend on how renewable electricity is accounted for in verified industrial emissions.
Development finance linking renewables with industrial energy needs
The financing structure reflects the role of European and multilateral development institutions in linking renewable energy investment with industrial competitiveness. European critical raw materials policy often focuses on mining and mineral extraction, while industrial supply chains also rely on energy-intensive processing facilities such as smelters and refineries. These facilities are described as needing to meet increasingly demanding environmental standards.
Aluminium, according to the announcement, is particularly exposed to electricity costs and carbon intensity because its production process requires substantial power. Access to competitively priced renewable electricity can affect operating economics and producers’ ability to maintain access to European markets. For Scatec, the 25-year, sovereign-guaranteed PPA provides a long-term industrial customer and supports the revenue structure of the renewable investment.