The latest on Egypt’s burgeoning renewable energy sector
Egypt’s renewable energy sector under the second feed-in tariff program has been on a tear in the past couple of weeks. Herewith, a roundup of recent developments, including news yesterday and overnight (background here, here and here, for those so inclined):
International institutional interest in solar helps 30 companies close on power plants: The International Finance Corporation has been among a number of leading international finance institutions to dish out some of the c.USD 1.8 bn pledged to the Benban solar complex, helping companies in the project reach financial close. The UK government announced it would be taking part in the IFC’s debt package through the state-owned CDC Group, which is investing USD 97 mn in the complex. Meanwhile, the African Development Bank’s (AfDB) infrastructure fund for Africa, Africa50, signed financing documentation with Scatec Solar and Norfund for developing 400 MW in solar plants in Benban by contributing equity and leveraging total funding of around USD 450 mn, African Review reports.
The China-led Asian Infrastructure Investment Bank (AIIB) is also providing USD 210 mn to fund 11 solar power plants in Benban, according to Trade and Industry Minister Tarek Kabil, in addition to the European Bank for Reconstruction and Development’s USD 500 mn framework for renewable energy in Egypt. Senior debt will be provided by EBRD, FMO, the Green Climate Fund, the Islamic Development Bank and the Islamic Corporation for the Development of the private sector. By Al Mal’s count, 30 solar power projects have reached financial close as of Monday morning and submitted their documents to the Electricity Ministry.
Other renewable energy projects in the works: The Egyptian Electricity Transmission Company (EETC) will sign a power purchase agreement today with a consortium made up of Toyota, Orascom, and GD France, who are co-developing a USD 250 mn wind power station in the Gulf of Suez, said Lamiaa Youssef, the Electricity Holding Company chief officer on the feed-in tariff (FiT) program. The parties have already concluded negotiations, agreeing that the EETC would purchase power from the 250 MW project at USD 0.038 per kWh for 25 years under the FiT, she told Al Borsa. The New and Renewable Energy Authority (NREA) is also looking at offers from Vestas, Siemens, Enercon, and Ray Power for another 250 MW station in the Gulf of Suez, NREA boss Mohamed El Khayat said, adding that two solar power projects will be tendered in Hurghada and Kom Ombo before the end of December.
What’s next for Egypt’s renewables sector? Electricity Minister Mohamed Shaker reminded everyone that the FiT for all subsequent solar and wind projects will be determined on a case-by-case basis. The ministry will begin issuing tenders in 1Q2018, he said, and a committee is currently drawing up a list of renewable energy projects that will be offered.
Speaking on other power projects, Shaker said that the ministry plans to sign the contracts to connect the Egyptian and Saudi electricity grids soon. He also repeated that the Dabaa contracts will be signed before the year is out (inshallah).