Orascom in negotiations to acquire stake in Ras Ghareb wind farm

Alyaa Stohy
2 Min Read
Orascom Construction (OC)

Orascom Construction (OC) is currently eyeing a stake in a 500MW wind farm in Ras Ghareb, adjacent to a 262.5MW wind farm in which the company has a 20% stake and a 20-year PPA with the government.

A source told Daily News Egypt that OC is targeting more projects that have a build-own-operate (BOO) scope, and which will bring in recurring income in various sectors including water treatment.

The company is also focused on growing an Operation and Maintenance business, which it already has in facilities management, water treatment and the monorail.

OC management sees its current portfolio of over $4bn as constituting a healthy backlog standing, and includes projects that they have expertise on. Moreover, the management is comfortable with backlog figures that provide 18 months of revenue visibility in the Middle East and North Africa (MENA) region, and 12 months of revenue visibility in the US.

The company stressed its expertise in securing financing on behalf of the client for large scale projects such as the monorail and water treatment plants through foreign currency financing. In this instance, 52.2% of the group’s total backlog is in foreign currency (FCY) or priced in FCY as of the end of September 2020, while 37.2% of the backlog in Egypt is in FCY.

 The source added that the company is selectively looking at other countries, including Iraq and some countries in Africa, although this would depend on financing and the type of projects that become available. They see more awards going towards data centres and commercial projects in the US.

The company witnessed healthy operations in 2020, despite having some delays in a few projects due to the novel coronavirus (COVID-19) pandemic, and which reflected on numbers for the second quarter (Q2) of 2020. However, Q3 of 2020 numbers showed a rebound with a backlog of $5.3bn, and net cash of $209m.

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