The Red Sea Wind Energy (RSWE) consortium announces the financial close of its second wind farm in the Gulf of Suez, Egypt. The 500 MW wind farm is financed by a myriad of development partners.
Red Sea Wind Energy (RSWE) has reached another milestone in the construction of its second wind farm in the Gulf of Suez in Egypt. The company announces the financial close of this second project, which aims to develop an installed capacity of 500 MW. The financing of this second project is provided by the Japan Bank for International Cooperation (JBIC), in coordination with Sumitomo Mitsui Banking Corporation, Norinchukin Bank and the French bank Société Générale.
The loans provided by these financial companies are covered by guarantees from the European Bank for Reconstruction and Development (EBRD) and Nippon Export and Investment Insurance (NEXI). For its part, HSBC Bank Egypt, the subsidiary of the British banking group HSBC acts as a working capital bank and security agent “onshore”. The participation of several Japanese financial institutions in this project confirms the return of Japan in Africa, announced at the 8th Tokyo International Conference on African Development (TICAD-8) in 2022 in Tunisia.
Japanese investments
Japan wants to counter Chinese investment in Africa, which has increased tenfold in recent years. In East Africa alone, Beijing’s investment flows have increased by 35% to reach $8.2 billion in 2021 according to the United Nations Conference on Trade and Development (UNCTAD). Regardless, the funding will allow RSWE to accelerate the development of its project in the Gulf of Suez, near the town of Ras Ghareb.
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This new 500 MW wind farm project builds on the consortium’s success in developing a first 262 MW project that has been in commercial operation since 2019. The wind farm has been under construction since November 2022 and is expected to start commercial operations in the third quarter of 2025. The project has already been the subject of a 25-year power purchase agreement (PPA) between RSWE and the Egyptian Electricity Transmission Company (EETC).
According to RSWE, the wind farm under construction will be able to provide clean electricity to more than 800,000 Egyptian households. It will also help accelerate Egypt’s transition to renewable energy generation and reduce CO2 emissions by approximately 1 million tons per year after it comes online. For the record, RSWE is owned by a consortium consisting of French energy company Engie (35%), Egyptian flagship Orascom Construction (25%), Japanese investor Toyota Tsusho Corporation (20%) and its compatriot Eurus Energy Holdings Corporation (20%).
Jean Marie Takouleu
