Lower FiT in phase two and possible international arbitration? The Ismail Cabinet is expected to discuss today lowering the feed-in tariff (FiT) rate for phase two projects as outlined in the Electricity Ministry’s proposed framework, government sources tell Al Borsa. The proposal will set a lower tariff in phase two at somewhere between USD 0.07 and USD 0.09 per kWh from USD 0.14 in phase one. The framework will also allow FiT companies which failed to close on phase one to transfer their projects over to phase two under the new rates, the source added. Phase two will also require companies to increase the percentage of local components in their plants to lower FX costs. The Electricity Minister and CBE Governor are apparently holding talks to discuss making FX available for FiT projects.

While the sources do not state whether international arbitration is on the table in phase two, it does appear the government is trying to paint arbitration in Cairo under international rules as being “international arbitration.” We had noted earlier this month, that among the four frameworks under consideration for phase two was to allow international for the USD 0.09 per kWh rate.