Egypt Aluminium is set to receive renewable electricity from a planned solar and battery project supported by approximately €195 million in financing. Norwegian renewable energy developer Scatec has signed financing agreements with development banks for the project’s first phase. The electricity will be supplied to the aluminium producer under a long-term power purchase agreement (PPA).
Solar and battery capacity under a 25-year PPA
The project combines 569 MW of solar generation with 100 MWh of battery storage. Electricity supply to Egypt Aluminium is planned under a 25-year PPA backed by a sovereign guarantee. Scatec expects the facility to generate about 1.4 TWh of electricity annually.
Scatec also expects the project to prevent more than 550,000 tonnes of carbon dioxide emissions each year. The announcement describes the agreement as providing dedicated renewable power for the aluminium producer. It also links the long-term supply arrangement to reducing reliance on higher-carbon electricity generation.
EIB, EBRD and AfDB funding for the first phase
The financing package is provided by the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the African Development Bank (AfDB). It is intended to cover approximately 80% of an estimated €243 million investment required for the first phase. The EIB is contributing up to €80.9 million, supported by an EU guarantee under the Global Gateway framework.
The financing agreements have been signed, moving the project from preliminary development and lender interest to contracted financing. The announcement does not confirm whether the entire financing package has been disbursed. Construction is proceeding, with commercial operations expected to start in the first half of 2028.
Electricity supply relevance for aluminium decarbonisation reporting
The project is positioned around electricity consumption as part of Egypt Aluminium’s industrial carbon footprint. Aluminium production requires substantial energy, making access to renewable electricity relevant to operating costs and international competitiveness. The long-term agreement is intended to provide a dedicated renewable power supply rather than relying on higher-carbon electricity generation.
The investment also reflects support for industrial decarbonisation through energy infrastructure connected to an industrial off-taker. For established industrial producers, renewable electricity can be used to meet environmental requirements alongside growing commercial attention on product-level emissions. The announcement describes this as extending beyond renewable generation aimed solely at general electricity markets.
EU CBAM implications for aluminium exports
The project has implications for trade with the European Union because an estimated 60% of Egypt Aluminium’s exports are destined for the bloc. The EU’s Carbon Border Adjustment Mechanism (CBAM) includes aluminium among goods subject to carbon-related import requirements. This increases the importance of measuring and managing emissions associated with production.
The announcement states that replacing higher-carbon electricity with solar generation could improve the emissions profile of aluminium supplied to European customers. It also notes that any potential competitive effect depends on how renewable electricity is accounted for in verified emissions reporting. It further says that CBAM outcomes depend on applicable calculation methodology, independently verified emissions data, and how electricity-related emissions are treated.
Development finance linking renewables and industrial energy needs
The financing structure reflects European and multilateral development institutions connecting renewable energy investment with industrial competitiveness. The announcement references European critical raw materials policy, alongside energy-intensive processing facilities such as smelters and refineries that must meet environmental standards. It identifies aluminium as exposed to both electricity costs and carbon intensity due to its power requirements.
Access to competitively priced renewable electricity is described as influencing operating economics and maintaining access to European markets. For Egypt Aluminium, the project is presented as offering a more sustainable electricity supply and a stronger position in export markets where embedded emissions are increasingly important commercially. For Scatec, a 25-year, sovereign-guaranteed PPA provides a long-term industrial customer and supports revenue tied to the renewable investment.
The signed agreements are described as substantially reducing remaining funding uncertainty, while construction progress, capital deployment and eventual electricity delivery remain key milestones. The announcement links renewable generation with industrial decarbonisation through delivery of electricity and independently verified emissions performance. Its stated effect on European aluminium trade depends on those elements.