International banks and institutions have agreed to finance the second phase of the renewable energy feed-in tariff projects after meeting with officials from the Ministry of Electricity and Renewable Energy.
In a meeting held at the ministry a few days ago, international institutions and agencies were very willing to finance the second phase of the feed-in tariff projects, sources at the ministry revealed. It was agreed that another meeting will be held within two weeks to answer inquiries regarding the contracts and agreements.
Sources added that the financing agencies will await the cabinet’s announcement to begin implementation of the second phase of the feed-in tariff project in October, as well as negotiations with companies and alliances that are qualified to carry out the implementation of wind and solar energy projects.
The sources explained that the financing agencies’ main inquiries were related to whether there will be further amendments to conditions and controls would be amended again or if the ministry will adhere to what it announces.
The agencies also inquired about the basis on which the feed-in tariff will be calculated; when the final copy of the energy purchase agreement will be ready; and any solutions to provide the dollar to investors to convert instalments.
Financial parties noted that they are able to cease financing these projects in the event that any of the items that were agreed upon in the meeting are violated. These projects are of paramount importance for the diversification of energy resources in Egypt and for attracting more foreign countries to invest in Egypt, they added.
Sources said that officials confirmed to representatives from international institutions that they are obliged to adhere to the announced items of the agreement—starting from the announced tariff, then the arbitrary item, and the regulating terms and conditions.
The meeting was attended by chairperson of the Egyptian Electricity Holding Company (EEHC) Gaber Desoki; chairperson of the New and Renewable Energy Authority (NREA) Salah El–Sobky; chairperson of the Egyptian Electric Utility and Consumer Protection Regulatory Agency (EgyptERA) Hatem Waheed; and head of the feed-in tariff unit Lamia Youssef.
The banking parties and institutions that attended the meeting included the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and EFD.
New and renewable energy investors said that they will carry out a new feasibility study for financial institutions to lend to them, so as to establish the second phase of the feed-in tariff project.
They are still discussing the tariff’s profitability in light of the current conditions, such as the foreign currency shortage and the high exchange rate for US dollars.