Scatec is positioning Egypt as one of its largest green-infrastructure markets, with plans to invest up to US$5 billion over two years across renewable energy, battery storage, renewable-powered desalination, green data centres and green hydrogen projects. The Norwegian developer’s expanding portfolio builds on Egypt’s Nexus of Water, Food and Energy (NWFE) programme, where its existing pipeline has been valued at about US$3.6 billion across solar, wind, storage and green hydrogen projects.
The scale of the programme, however, is only part of the story. Scatec’s approach relies on project finance, allowing individual projects to raise most of their construction capital without putting the developer’s entire balance sheet behind the investment. A typical structure is roughly 20% equity and 80% non-recourse debt, with Scatec and partners such as Norfund and EDF Power Solutions providing the equity while development finance institutions provide the bulk of the senior debt. On the Obelisk solar-and-storage project, for example, about US$479 million of DFI debt supported a project costing roughly US$590 million.
Development finance institutions are central to making this structure work. Lenders including the European Bank for Reconstruction and Development, African Development Bank, European Investment Bank and British International Investment have provided long-term financing, while programmes such as NWFE help bring concessional and commercial capital together. Political-risk protection from institutions including MIGA, alongside EU investment guarantees, further reduces the risks perceived by lenders and makes it possible to finance projects in longer tenors and at lower borrowing costs.
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The other critical piece is how the projects will make money. Large projects such as Scatec’s solar-and-storage developments are supported by long-term US dollar-denominated power purchase agreements with the Egyptian Electricity Transmission Company (EETC). Contracts extending up to 25 years provide predictable revenues and reduce exposure to volatile electricity markets. For battery projects, contracted dispatch and capacity services provide additional revenue certainty, giving lenders greater confidence that the projects can generate sufficient cash flow to service their debt.
The model illustrates how Africa could finance the enormous capital requirements of its energy transition without relying entirely on governments or developers’ own balance sheets. Equity absorbs the first layer of risk, DFIs provide most of the debt, guarantees reduce political and sovereign risk, and long-term PPAs create predictable revenues. If Scatec can replicate this structure across its planned solar, wind, storage, desalination and green-hydrogen investments, Egypt could become a useful demonstration of how blended finance and project finance can turn multi-billion-dollar green infrastructure ambitions into bankable projects.
