Scatec has signed $217 million of loans for the first phase of Dandara, a 569MW solar plant with a 100MWh battery system in Egypt that will supply Egypt Aluminium, the country’s largest aluminium producer. The Norwegian renewables company said on 28 October that construction is starting, with commercial operation targeted in the first half of 2028.
The non-recourse project finance comes from the European Bank for Reconstruction and Development (EBRD), the African Development Bank (AfDB) and the European Investment Bank (EIB). Scatec said in its regulatory release that the loans cover about 80% of the first phase’s estimated $271 million cost.
Who is lending what
Two of the three lenders have published their shares. The EBRD said on 29 October it is providing $63 million. That includes $10 million of concessional finance from the Climate Investment Funds (CIF) and $7 million from Canada through the EBRD’s High-Impact Partnership on Climate Action. The EIB said it is lending up to $90 million through EIB Global, guaranteed by the EU’s European Fund for Sustainable Development Plus. The AfDB has not published its share.
Scatec also signed a partnership with National Bank of Egypt, which will take a 20% stake. After that deal and an earlier transaction with the EBRD, Scatec says it owns 56% of the project: 36% through a renewable energy platform it set up with the EBRD and 20% directly. It plans to bring in more equity partners. Scatec will also build, manage and operate the plant, with its construction work making up about 80% of the capital cost.
The plant and its buyer
Dandara is in Qena Governorate in Upper Egypt. It will sell its power to Egypt Aluminium, also known as EgyptAlum, under a 25-year power purchase agreement. The EIB says EgyptAlum’s payments are backed by a guarantee from Egypt’s Ministry of Finance, and the EBRD says the electricity will be delivered through the national transmission network.
Scatec says the first phase will generate about 1.4TWh a year and cut carbon dioxide emissions by more than 550,000 tonnes a year. The lenders give somewhat higher figures. The EBRD puts output at about 1.47TWh a year, enough for more than 300,000 households, and the emissions saving at nearly 732,000 tonnes. The EIB expects around 1,500GWh in the first year. The EBRD describes the plant as 500MW, against Scatec’s and the EIB’s 569MW, without explaining the difference. The EIB gives April 2028 as the start of commercial operation.
The battery system will let some solar power produced during the day be used at peak times, the EBRD says. The bank’s package also funds a training programme in Qena for at least 100 people in green and digital skills, with women expected to make up at least a quarter, and Scatec will offer up to five internships a year to graduates.
Scatec expects to start building a second phase in the first half of 2027. Reuters reported, according to pv magazine, that Egypt had signed a preliminary $650 million financing deal for the whole project earlier in the week.
“Dandara builds on what Scatec recently achieved with Obelisk; now bringing renewable power directly to Egyptian industry at scale,” said Scatec chief executive Terje Pilskog. Obelisk is the company’s earlier solar and battery plant in Egypt, which Scatec calls Africa’s largest hybrid solar and battery installation.
Why lenders are backing solar for an aluminium smelter
This is TSN’s analysis. Aluminium smelting is one of the most electricity-hungry industries there is, so the source of a smelter’s power largely decides the carbon footprint of its metal. Scatec says the deal will help Egypt Aluminium meet “evolving trade-related environmental standards”. The clearest of these is the EU’s carbon border adjustment mechanism, which covers aluminium imports. A long-term solar contract gives the smelter a way to show lower-carbon power to European buyers.
The deal’s structure helps explain why three development banks signed up. A 25-year contract with one large buyer, backed by a state guarantee, gives lenders predictable income, and the concessional money from CIF and Canada lowers the cost of the battery part. That is a model other Egyptian industries could copy.
The limits are real, though. A 100MWh battery is small next to 569MW of panels, so most of the plant’s output will still arrive in daylight hours, as the lenders’ own descriptions imply. The generation and emissions figures are forecasts that differ by as much as a third between the parties. And nothing is generating yet. The test of Dandara is whether it is running on schedule in 2028. Similar long-term supply deals are spreading elsewhere, such as Fortescue’s green grid contract with PLS in Australia, where batteries have started to beat gas at the evening peak. Storage technology is also moving, from lithium-ion to newer chemistries such as recyclable flow batteries.
Sources
- Scatec ASA, “Scatec secures financing for the first phase of the Dandara solar and BESS project in Egypt”, regulatory release, 28 October 2026. https://www.scatec.com/en/scatec-secures-financing-for-the-first-phase-of-the-dandara-solar-and-bess-project-in-egypt/
- European Bank for Reconstruction and Development, “EBRD supports Egypt’s energy security with US$ 63 million of financing”, 29 October 2026. https://www.ebrd.com/home/news-and-events/news/2026/ebrd-supports-egypt-s-energy-security-with-us–63-million-of-fin.html
- European Investment Bank, “EIB provides up to $90 million for one of the largest solar and battery projects in Egypt and Africa”, 29 October 2026. https://www.eib.org/en/press/all/2026-363-eib-provides-up-to-usd90-million-for-one-of-the-largest-solar-and-battery-projects-in-egypt-and-africa
- pv magazine, “Scatec secures $217 million for Egypt smelter solar-plus-storage plant”, 29 October 2026 (citing Reuters on the preliminary $650m deal). https://www.pv-magazine.com/2026/10/29/scatec-secures-217-million-for-egypt-smelter-solar-plus-storage-plant/
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