The project will power one of Africa’s largest aluminum producers under a 25-year agreement
QENA, Egypt – The African Development Bank Group (AfDB) has approved a financing package of up to $66 million for the first phase of the Dandara solar project in southern Egypt, supporting the development of a 500-megawatt (MW) solar power plant and a 100 megawatt-hour (MWh) battery energy storage system.
Located in Qena Governorate, the Dandara photovoltaic plant with integrated battery storage will be developed by Norway-based Scatec through its subsidiary Dandara Solar Power S.A.E.. The project represents a strategic step in Egypt’s efforts to transition to a low-carbon economy and promote renewable energy use in industrial sectors, in line with Egypt Vision 2030 and the Sustainable Development Goals.
Funding Structure
The total project cost is estimated at more than $290 million. The AfDB’s financing package comprises:
- $46 million from the bank’s own ordinary resources
- $20 million in concessional funding from the Climate Investment Funds’ Clean Technology Fund
- Additional debt expected from a consortium of development finance institutions
The European Bank for Reconstruction and Development is also considering a senior loan of up to $80 million to support the project.
Project Timeline and Output
The project is scheduled to become fully operational in early 2028. Construction is expected to begin in the second quarter of 2026, following receipt of all required permits and approvals, with an implementation period of approximately 15 months.
Once operational, the facility is expected to generate approximately 1,373 gigawatt-hours (GWh) of clean, reliable, and cost-effective electricity annually. The battery storage system will supply renewable power during peak evening demand periods, mitigate solar variability, and improve grid reliability.
Environmental and Employment Impact
The project is expected to reduce annual carbon dioxide emissions by approximately 500,000 tonnes. Over its lifetime, total emissions reductions could reach approximately 12.5 million tonnes.
The construction phase is expected to create around 2,500 jobs, with a focus on opportunities for women and young people, while 23 permanent positions are expected during operations.
Power Purchase Agreement
The Aluminum Company of Egypt (EgyptAlum)—one of Africa’s largest aluminum producers and a public enterprise listed on the Egyptian Stock Exchange since 1997—will be the sole off-taker under a 25-year Power Purchase Agreement. The electricity will be supplied exclusively to the state-owned company to power its operations in Upper Egypt.
Strategic Importance
AfDB Vice President for Power, Energy, Climate and Green Growth, Dr. Kevin Kariuki, said the project represents an important step in industrial decarbonisation. “This project perfectly illustrates industrial decarbonisation,” Kariuki stated. “It will enable EgyptAlum to preserve its market share in the European aluminium sector while protecting more than 6,000 Egyptian jobs in the context of the European Union’s Carbon Border Adjustment Mechanism, which came into effect in January 2026”.
The project aligns with the AfDB’s Ten-Year Strategy 2024-2033, the institution’s Four Cardinal Points strategic priorities, and its country strategy for Egypt, which seeks to expand access to sustainable energy while attracting private-sector investment.
AfDB Director of Energy Financial Solutions, Policy and Regulation Wale Shonibare said the Dandara project is expected to establish an important benchmark for private-sector investment in renewable energy and industrial decarbonisation across the region.
The Dandara Solar Power Plant is planned as the first phase of a larger development that will eventually include 1,000 MW of solar capacity coupled with 200 MWh of battery storage.
