The Egyptian government has finalised agreements with Emirati firm AMEA Power to build a solar park and a wind farm with a combined capacity of more than a gigawatt (GW) in a $1.1 billion deal, the cabinet said on Wednesday.

The deal provides for AMEA to build a 560 megawatt (MW) solar plant in southern Egypt and a 505MW wind farm on the Red Sea coast, and is supported with debt and equity financing from the International Finance Corporation (IFC) and several development and commercial banks.

Power from the solar park and the wind farm will be priced at two U.S. cents per kilowatt hour and three U.S. cents per kilowatt hour respectively, the lowest rates in Africa and among the lowest globally, the IFC said in a statement.

Construction of both projects is due to start in December 2022, with completion of the Abydos solar plant expected after 18 months and of the Amunet wind farm after 30 months.

The deals provide a boost for Egypt's lagging renewable power development, shortly after it hosted the COP27 United Nations climate summit.

The share of non-hydro renewable power in Egypt's total energy mix was just 5% 2021, well below potential, the World Bank said in a report published this month.