Norwegian renewable energy company Scatec has secured approximately €195 million in development-bank financing for a solar power and battery storage project supplying electricity to Egypt Aluminium, covering around 80% of the first phase’s estimated €243 million investment cost.
The financing package involves the European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD) and African Development Bank (AfDB). Loan agreements have been signed, although full disbursement of the financing has not been separately confirmed.
The EIB is contributing up to €80.9 million, backed by an EU guarantee under the Global Gateway framework.
Solar Generation and Battery Storage Capacity
The first phase will combine 569 MW of solar generation capacity with 100 MWh of battery storage. Electricity will be supplied to Egypt Aluminium under a 25-year power purchase agreement backed by a sovereign guarantee.
Construction is beginning, with commercial operations expected in the first half of 2028. Scatec forecasts annual electricity generation of approximately 1.4 TWh and annual emissions reductions exceeding 550,000 tonnes of CO₂.
Implications for Aluminium Exports to Europe
The project has implications for European aluminium trade, as an estimated 60% of Egypt Aluminium’s exports go to the European Union.
Aluminium falls within the scope of the EU’s Carbon Border Adjustment Mechanism (CBAM), making the emissions intensity of electricity used in production increasingly relevant to the competitiveness of exports.
Replacing higher-carbon electricity with renewable generation could reduce the embedded emissions of aluminium supplied to European customers. The actual CBAM impact will depend on the applicable calculation methodology, verified emissions data and the treatment of electricity-related emissions.
Development Banks Finance Industrial Decarbonisation
The financing illustrates the role of European and African development banks in supporting industrial decarbonisation beyond mining operations.
While European critical-minerals policy frequently focuses on extraction, the competitiveness of the wider industrial supply chain also depends on smelters, refineries and processing facilities capable of producing materials with lower carbon intensity. Aluminium production is particularly electricity-intensive, making access to renewable power relevant to both operating costs and trade competitiveness.
For Egypt Aluminium, the project could improve the emissions profile of production destined for the European market. For Scatec, the sovereign-backed 25-year agreement provides a long-term industrial electricity customer. The project has therefore progressed beyond preliminary financing discussions, with loan agreements signed and construction moving forward. Its anticipated emissions benefits for European aluminium imports will depend on renewable electricity delivery and verification of industrial emissions data.
