Masdar Expands Renewables Portfolio Amid Flurry of Solar Deals Across Middle East

Photo-illustration: Pixabay

As clean energy firm Masdar unveiled a raft of deals aimed at expanding its renewables portfolio internationally, a flurry of wind and solar investments this week further served to highlight the Middle East and India’s rapidly growing presence in the global solar power market.

Yesterday Abu Dhabi-owned Masdar signed an agreement with Egyptian electricity infrastructure firm Elsewedy Electric and Japanese energy investor Marubeni that will see the three team up to deliver a portfolio of more than 800MW of wind power in Egypt.

Details of specific proposed wind projects have not been revealed at this stage, but the collaboration will help push Egypt towards its recently-announced target of generating 42 per cent of its electricity from renewables by 2025, including 7.2GW of wind power by 2020 and 3.5GW of solar by 2027, the companies said.

Masdar CEO Mohamed Jameel Al Ramahi explained the deal would build upon the firm’s existing presence in Egypt, where it has developed several solar power projects, including the 10MW Siwa PV plant and four installations in the Red Sea region with a combined capacity of 14MW.

“As Egypt’s economy expands, so do the opportunities to provide energy from renewable sources,” he said.

The company also yesterday completed financing for the 200MW Bayouna solar power project in Jordan, which Masdar is developing on behalf of the country’s state utility National Electric Power Company.

A joint venture with Finnish investor Taaleri Group, which holds a 30 per cent stake, the project is set to be Jordan’s largest solar power plant and is earmarked for completion during the second quarter of 2020, with enough capacity to supply power for around 110,000 homes.

By 2020, Jordan is aiming to source 15 per cent of its power from renewable sources, and the Bayouna solar plant is expected to meet around three per cent, according to Dr Saleh Kharabsheh, Jordan’s minister of energy.

“The Baynouna project is helping to deliver on His Majesty King Abdullah II’s vision for a diversified energy mix and progressing the national agenda for energy security and sustainability,” he said.

The financing deal was managed by the International Finance Corporation (IFC), which invested part of its own capital while securing funds from Japan International Cooperation Agency, the Dutch Development Bank FMO, Europe Arab Bank, OPEC Fund for Development and German development bank DEG.

Meanwhile, Masdar and Spain-based oil company Cespa – both of which are wholly owned by Abu Dhabi’s sovereign wealth fund Mubudala – have announced plans to join forces in expanding their presence internationally, as the latter seeks to further diversify away from fossil fuels.

Under an agreement signed yesterday, the two companies will explore the potential for deeper collaboration in developing renewables projects, particularly wind and solar. Masdar said the move reflected the “constant search for synergies among businesses of the Mubadala Investment Company”.

The agreement bolsters Cespa’s long term diversification strategy, which has seen it acquire the rights to develop its first ever wind farm in Jerez de la Frontera, Spain’s southern province.

Juan Manuel García-Horrillo, director of Cepsa’s gas and power business, said it wanted to gain access to the fast growing renewable energy sector and try to mitigate the volatility of some of its markets, such as crude oil. “Our objective is to grow internationally in the renewables market to continue to diversify our energy sources and respond to the energy needs of every reality,” he said. “We are sure that this agreement will lead to interesting projects for both companies.”

All three Masdar deals were announced on the sidelines of the World Future Energy Summit during Abu Dhabi Sustainability Week, where the International Solar Alliance (ISA) also unveiled a series of major global financing initiatives for solar energy projects, demonstrating the growing importance of renewables in developing economies.

Yes Bank, India’s fifth largest private sector bank, on Wednesday committed $6bn-worth of financing through the ISA for developing solar energy projects in India, with $1bn targeted until 2023 and the remaining $5bn earmarked from thereafter until 2030.

The bank also signed five solar energy co-financing ‘Letters of Intent’ with several companies developing solar projects India, all of which are due to be completed by 2023:. They include Hero Future Energy’s plans for up to 1.5GW of capacity, up to 10GW from Greenko Group, up to 1GW from Amplus Solar, up to 1GW from Jakson Group, and up to 10MW from Tata Power Delhi Distribution Limited.

It follows Yes Bank’s recent $400m co-finance agreement with the European Investment Bank for the construction of new solar plants and wind farms across India, where the government aims to install 100GW of solar capacity by 2022.

A treaty-based alliance of 121 solar rich countries, the ISA was first established at the COP21 climate change summit in Paris in 2015. It is aiming to raise $1tr of investments in solar projects by 2030, with $700m invested directly in solar and £300m set aside for risk mitigation to protect companies wishing to invest in solar.

And, the ISA this week announced the signing of nine solar project deals across five of its member countries, including UAE, Saudi Arabia, Nigeria, India and Spain. The eight companies involved in the deals include Vyonarc Development Ltd, Waree Engineers, Gensol Group, SOLARIG, Shakti Pump, Refex Energy, Amplus Solar, and Zodiac Energy, the ISA said.

It follows plans confirmed this week by Saudi Arabia’s Renewable Energy Project Development Office (REPDO) to tender 4GW of renewable energy projects in 2018, including 3.3GW of solar PV across seven sites, and one 800MW wind project.

Upendra Tripathy, interim director general of the ISA, stressed the importance of its member countries getting projects “on the ground”. “That is what we call action to transaction, and that is what ISA is all about,” he said.

The week’s flurry of deals and major financing sums for numerous solar and wind projects across the region serves to highlight the growing importance of the Middle East in the global renewables market, as well as further cementing India as one of the world’s biggest drivers of solar power globally. While clean energy investment slows in Europe, the shift in the centre of gravity for the global clean energy sector is gathering pace.