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Sunday, 4 December 2016

Government freezes negotiations over five energy projects signed at EEDC

The government has called off talks on a number of high-profile energy projects signed at Egyptian Economic Development Conference (EEDC)in 2015, saying it has no need to increase capacity further, unnamed sources told Al Borsa. The focus is now instead on upgrading the national distribution grid to accommodate the added capacity, the sources added. The projects shelved, the newspaper claims, are ACWA Power’s 2,200 MW combined cycle plant in West Damietta (signed in partnership with Masdar) and its 2,000 MW clean coal plant; a USD 11 bn coal power plant signed with Tharwa Investment; a 500 MW in wind farm; and some 1,500 MW in solar power projects. Last week the ministry had delayed issuing the tender for the USD 1.3 bn Damanhour power plant, moving it to its 2022-2027 plan from the 2017-2022 version. This new shift in policy, if confirmed, comes as the three Siemens combined-cycle plants are undergoing commissioning.

Well, solar companies, you asked for it: Meanwhile, the Electricity Ministry will reprice contracts with companies under the feed-in tariff (FiT) program, but it may not be what the solar companies had in mind when they put in the request. The ministry expects companies will foot the bill for the 30% increase in costs of building infrastructure to the power plants and connecting them to the power grid under the cost-sharing agreement signed by FiT companies, ministry sources tell Al Borsa. As we noted last month, FiT companies were among the many who are requesting the government reprice their agreements following the float, calling for the government to increase the tariff. In an article last week, Wamda had suggested that the ministry has lost interest in FiT as the Siemens power plants start coming online.

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