Arab Republic of Egypt / Loan Insurance for Amunet Wind Power Project
Nippon Export and Investment Insurance
Nippon Export and Investment Insurance (NEXI; Chairman and CEO: Atsuo Kuroda) decided to provide insurance for loans extended by commercial financial institutions to Amunet Wind Power Company S.A.E. (the Project Company) invested by Sumitomo Corporation (Sumitomo) with their partner AMEA Power LLC. The Project Company will build, own and operate the 500-megawatt onshore wind farm consisting of 77 wind turbine generators and located in the Gulf of Suez region facing the Red Sea, approximately 240 km southeast of Cairo, the Arab Republic of Egypt (Egypt). The power generated will be sold to the Egyptian Electricity Transmission Company (EETC) under a 25-year Power Purchase Agreement (PPA) and the Ministry of Finance of Egypt has issued a guarantee for the PPA.
This is the first joint project between NEXI and the International Finance Corporation (IFC) based on the memorandum of understanding (MOU)1 signed in 2020. In addition, due to its contribution to environmental protection and climate change prevention, this project is provided with Loan Insurance for Green Innovation2 and increased commercial risk coverage of 97.5% is applied for the first time. The project also complies with the LEAD Initiative3 (in the Environment and Energy field) which NEXI actively promotes. This is also the first project which NEXI provides the Swap Transaction Insurance.
The Egyptian government set a specific target to increase the share of renewables in the national energy mix to 42% by 2035, which consists of hydro power (3%), wind (14%), solar (22%), and solar thermal (3%). This project is expected to play a significant role in Egypt as a measure aligned with Egypt’s renewable energy strategy.
Of the joint project financing procured by the Project Company from IFC, Japan Bank for International Cooperation (JBIC) , the Standard Chartered Bank, Tokyo Branch (SCB), Sumitomo Mitsui Banking Corporation (SMBC), and Sumitomo Mitsui Trust Bank, Limited, NEXI provides cover for approximately USD 200 million loan extended by the commercial banks, as well as for the interest rate swap agreement guaranteed by SMBC.
The financial support from NEXI is expected to expand the business opportunities of Japanese companies in Africa including Egypt, and maintain and increase the global competitiveness of Japanese businesses in renewable energy development.
NEXI will continue to actively support Japanese companies to expand their global business, as a Japanese financial institution to implement national policies.
| Insured | Standard Chartered Bank, Tokyo Branch (SCB), Sumitomo Mitsui Banking Corporation (SMBC), and Sumitomo Mitsui Trust Bank, Limited |
| Insured value | Approximately USD 200 million |
| Tenor | 21.5 years |
| Covered risk | Political risk 100%, Commercial risk 97.5% |
Contact
Power Group, Structured and Trade Finance Insurance Department
Tel: +81-3-3512-7340
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1 NEXI News Release, September 17, 2020
https://www.nexi.go.jp/en/topics/newsrelease/2020091502.html -
2 NEXI News Release, July 30, 2019
https://www.nexi.go.jp/en/topics/newsrelease/2019072901.html
NEXI News Release, October 4, 2021
https://www.nexi.go.jp/en/topics/newsrelease/2021100101.html - 3 In December 2020, NEXI announced the LEAD Initiative to respond to the business environment with and after the COVID-19. This initiative is intended to actively promote the underwriting of projects, with a focus on contributing to global carbon neutrality, solving social issues, and achieving the SDGs. Under this initiative, we aim to underwrite insurance of total value of JPY 1 trillion by the end of fiscal 2025, while diversifying our funding sources not only from traditional capital providers, but also from institutional investors, etc.