Arab Republic of Egypt / Loan Insurance for Gulf of Suez Onshore Wind IPP Project
-First Loan Insurance for Project Finance for Egyptian IPP-

December 4, 2017

Nippon Export and Investment Insurance

Nippon Export and Investment Insurance (NEXI; Chairman and CEO: Kazuhiko Bando) has provided insurance to support commercial bank loans for onshore wind IPP project implemented on the Gulf of Suez, 260 km southeast of Cairo, by Ras Ghareb Wind Energy SAE1(“Ras Ghareb”), an entity of the Arab Republic of Egypt invested in by Toyota Tsusho Corporation (“Toyota Tsusho”) and Eurus Energy Holdings Corporation (“Eurus Energy”). This is the first time that NEXI has provided long-term insurance for an Egyptian project since the outbreak of the “Arab Spring.” This is also the first loan insurance provided by NEXI to support project finance for an IPP project in Egypt.

Under this project, Ras Ghareb will build, own and operate the onshore wind power plant (125 units, 262.5MW) in Ras Ghareb municipality, Red Sea Governorate on the Gulf of Suez, with a 20-year power purchase agreement with the Egyptian Electricity Transmission Company.

Toyota Tsusho is developing and expanding its power generation business in the Middle East and Africa, including renewable energy such as wind power. As the company is especially focusing on business in Africa as a region of high potential for growth, the participation in this project is in line with its business strategy. Currently, Eurus Energy is operating wind and photovoltaic energy business in 12 countries. Egypt is the 13th country and also the first African country for Eurus Energy. By joining this project in Egypt, Eurus Energy is anticipating further business expansion in overseas markets.

In November 2015, the Japanese government announced “Actions for Cool Earth:ACE2.0” to support developing countries that address climate change. In addition to this, in the “Strategy for Exporting Infrastructure Systems” updated in May 2017, the government expresses its willingness to promote Japanese infrastructure business in the global market including design, construction, operation and management as well as investment in projects in their host countries. For NEXI, supporting this project through loan insurance is in conformity to the Japanese government’s policy.

To meet Egypt’s increasing power demand as a result of growing population and economy in recent years, expansion of power generation facilities is inevitable. Under the country’s power sources development program, it focuses on power sources diversification including renewable energies instead of heavy oil and gas that have been the major power sources. Under such circumstances, this project is expected to play an important role in Egypt.

In this project, Ras Ghareb is going to raise USD 320 million in total in the form of co-finance, of which Japan Bank for International Cooperation will provide USD 192 million, Sumitomo Mitsui Banking Corporation and Societe Generale, Tokyo Branch will provide USD 128 million. NEXI will provide insurance to support the loans of these two commercial banks.

NEXI’s financial support to this project will help Japanese companies to have more business opportunity in Egypt and other African countries, and will also help strengthen and maintain their international competitiveness in the energy development including renewable energy.

As a financial institution implementing Japan’s policy, NEXI will continue to support Japanese companies’ overseas business.

Borrower Ras Ghareb Wind Energy SAE
Lender (Insured) Sumitomo Mitsui Banking Corporation
Societe Generale, Tokyo Branch
Insurable Value USD 128 million
Tenor 18 years
Covered Risks Political Risk (with Extended Political Risk Insurance) 100% and Commercial Risk 90%

Contact: Power Group, Structured and Trade Finance Insurance Department
     Tel: 03-3512-7202

1 Ras Ghareb is held by Toyota Tsusho/Eurus Energy (40%), Engie SA (France, 40%), and Orascom Construction SAE (Egypt, 20%).