GLOBAL LENDERS BLESS FIT PHASE TWO: International finance institutions including the International Finance Corporation, the European Bank for Reconstruction and Development and the European Investment Bank reportedly signed-off on the terms of phase two of the feed-in tariff (FiT) program, at a meeting last Tuesday with the head of the Egyptian Electricity Holding Company Gaber Dessouky and New and Renewable Energy Authority chief Mohamed El Sobky. Sources tell Al Borsa that the lenders are awaiting the official launch of phase two on 26 October to begin talks with project owners

Lenders are still looking for assurances from the government that it will not change the terms of the program, with some threatening to pull out if the government doesn’t meet the new terms. Officials reportedly promised there would be no back-tracking, particularly on arbitration, which doomed phase one. Lenders also want to know when the FiT contracts will be finalized, how the government came up with the new tariff rates, and what plans the government has to make FX available to investors. A meeting was scheduled in two weeks’ time to address these concerns. FiT project owners will begin by drawing-up new feasibility studies to account for the reduction in the rates, which dropped to USD 0.084 per kWh from USD 0.14 per kWh in phase one solar projects. Companies speaking to Al Borsa continue bemoan the new rate, stating that profit margins will be eroded further when the devaluation takes place.