Arab Republic of Egypt / Loan Insurance for Gulf of Suez 2 Wind Power Project

March 6, 2023

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 Red Sea Wind Energy S.A.E. (the Project Company) invested by Toyota Tsusho Corporation and Eurus Energy Holdings Corporation with their partner Engie S.A. and Orascom Construction S.A.E. The Project Company will build, own and operate the 500-megawatt onshore wind farm consisting of 84 wind turbine generators and located in the Ras Ghareb region facing the Red Sea, approximately 200 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 European Bank for Reconstruction and Development (EBRD) 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. The project also complies with the LEAD Initiative3 (in the Environment and Energy field) which NEXI actively promotes. This is also a project which NEXI provides the Swap Transaction Insurance4 .

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 EBRD, Japan Bank for International Cooperation (JBIC), Sumitomo Mitsui Banking Corporation (SMBC), Societe Generale Tokyo Branch, The Norinchukin Bank, NEXI provides cover for approximately USD 163 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 Sumitomo Mitsui Banking Corporation (SMBC), Societe Generale Tokyo Branch and The Norinchukin Bank
Insured value Approximately USD 163 million
Tenor 21 years
Covered risk Political risk 100%, Commercial risk 97.5%

Power Group, Structured and Trade Finance Insurance Department
Tel: +81-3-3512-7340