Proceeds will finance six operating fields in Egypt’s Benban Solar Park
London, April 28, 2022 – Today, six operating companies sponsored by Scatec ASA launched a 19-year USD$334.5 million Green Project Bond to finance six operating fields in Egypt’s Benban Solar Park, the fourth largest photovoltaic solar power plant in the world and the largest on the African continent. A leading renewable energy solutions provider worldwide, Scatec has been present in Egypt since 2017 and is one of the largest independent solar power producers in the country. This innovative capital markets climate finance transaction is the first of its kind in Africa.
The Project Bond benefits from a Climate Bond certificate from the Climate Bond Initiative. The green capital markets transaction was distributed to a consortium of development finance institutions—comprising the European Bank for Reconstruction and Development (EBRD), U.S. International Development Finance Corporation (DFC), Dutch Entrepreneurial Development Bank (FMO) and German Investment Corporation (DEG)— alongside private institutional investors from around the globe. The Multilateral Investment Guarantee Agency (MIGA) and EBRD risk mitigation instruments were incorporated into the structure to facilitate distribution to these private sector investors, including major institutions for whom these are first-ever investments in Egypt.
This innovative capital markets exercise has benefitted from the proactive encouragement of the Government of Egypt. The dual-MDB credit enhancement structure establishes an efficient precedent for future transactions, including the prospect of Investment Grade credit ratings, to support financing of the country’s ambitious energy transition and climate resilience investment programmes.
MUFG structured and executed the transaction. Scatec’s Green Project Bond represents a further step forward in MUFG’s Blended Finance franchise. Over the past five years MUFG has positioned itself as a market leader in credit-enhanced, institutional investor-distributed deals delivering financing to support social and economic development. Successful execution of this Egyptian Green financing, leveraging the country’s commitment to a low-carbon future, marks MUFG’s eighth Blended Finance transaction on the African continent alone.
Ahmed Usein and Christopher Marks, responsible respectively for Structured Solutions and Emerging Markets EMEA at MUFG, commented: “We are extremely pleased to have partnered on this remarkable transaction with Scatec and our development finance partners, including MIGA and EBRD in structuring of the credit enhancement documentation— with the invaluable support of the Government of Egypt. Beyond the provision of new long-term institutional liquidity to the country’s expansive Benban solar fields, this structure creates new financing options for the next generation of economic, social and climate resilient projects in Egypt and beyond.”
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with approximately 2,500 locations in more than 50 countries. The Group has about 170,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group aims to “be the world’s most trusted financial group” through close collaboration among our operating companies and flexibly respond to all of the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges.