The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, announced guarantees of up to $102.6 million in support of the construction, operation and maintenance of six solar power plants in Egypt. The power plants will collectively have a combined capacity of up to 250 MW, and represent the first set of a total 12 projects approved by MIGA's board in support of Egypt's Solar Feed-in Tariff (FiT) program.

The guarantees are being provided against the risks of expropriation, transfer restriction and inconvertibility, breach of contract, and war and civil disturbance. Some $5.0 million of coverage is being provided for equity holder IB Vogt GmbH of Germany for up to 15 years. An additional $97.6 million of cover is being provided for up to 20 years to lender Industrial and Commercial Bank of China (ICBC), bolstering the longer-term strength of the projects against fluctuating tariffs. ICBC provided loans to ACWA Power for three of the six proposed power plants.

The combined cost of the six projects will be $385.8 million. Energy from the power plants will be sold at $0.084 per kWh hour to the Egyptian Electricity Transmission Company under a 25-year power purchasing agreement. The PPA is backstopped by a guarantee from Egypt's Ministry of Finance.

The projects will contribute to the government's target of having renewable energy make up 20 percent of power generation by 2020, and also the FiT program, which seeks to attract private sector investment for up to 4.3 GW in solar and wind power generation.

According to MIGA, to date installed capacity has reached 35 GW, however, with a generation mix consisting of 78 percent gas-fired and 12 percent fuel oil-fired power plants, Egypt's energy sector has suffered from chronic power deficits and frequent blackouts resulting from rapid demand growth coupled with acute gas shortages and severe underinvestment since 2010.