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Thursday, 10 January 2019

Is the Electricity Ministry looking to ditch Egypt’s feed-in tariff program in favor of an IPP framework?

Is the Electricity Ministry looking to ditch the feed-in tariff program in favor of IPP framework? The Egyptian Electricity Transmission Company (EETC) is reportedly looking to end its reliance on power purchased from the private sector under the feed-in tariff (FiT) program, unnamed Electricity Ministry sources said. The move is meant to open up space for the private sector to produce and sell power under an independent power producer (IPP) framework, which allows private companies to directly sell power to consumers while paying the state a fee to use the national grid for transmission. The EETC is not looking to back down from its pre-existing commitments to power purchases under the FiT framework, including from the Hamrawein and Al Nowais coal plants, the sources stressed.

Background: The Egyptian Electricity Utility and Consumer Protection Agency (Egyptera) had been holding high-level meetings last year to discuss the pricing scheme for power produced and sold under the IPP framework. Sources at the time said the plan is to implement a flexible system that will allow suppliers to negotiate prices with consumers, charging them more or less than the state for power based on a contractual agreement between them. Energy group Empower reportedly became the first company to receive an IPP license to sell electricity from waste in June.

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