The Egyptian Electricity Transmission Company (EETC) will sign an energy purchase agreement with eight solar power companies that managed to implement financial closure of their projects, according to the conditions and controls of the first phase of the feed-in tariff within 10 days.
Sources in the Ministry of Electricity said that the committee supervising the projects has completed studying the files of six companies that fit the conditions, and implemented financial closure to establish solar power stations in Benban in Aswan, based on the feed-in tariff system and the controls of the first phase of the project.
Sources explained that the Arabic copy of the energy purchasing agreement was reviewed and approved by the State Council and that it will be available for signing by the EETC within 10 days.
According to the terms and conditions of the first phase, in case of conflict, arbitration will take place in Egypt in the Cairo Regional Centre for International Arbitration. The company will provide 85% of financing in foreign currencies and the remaining 15% in Egyptian pounds, while the tariff’s price stands at 14.32 cents.
The Electricity Ministry has given the 136 qualified companies a chance to respond to its official signing invitation until 21 October, whether through signing the agreement on financial closure or participating in the second phase of the projects, or even withdrawing.
The chairperson of one of the solar power companies said that there are no problems regarding arbitration in Egypt in case of conflicts. He added that the economic feasibility of establishing a solar power station based on the feed-in tariff system is profitable.
Several investors qualified for the projects said that the ministry will not sign the agreement once financial closure is implemented because agreements are not finalised.
An official in the New and Renewable Energy Authority (NREA) said that the ministry is committed to its announcement to sign the first phase’s agreement until 26 October, and that whoever cannot implement financial closure will have a chance in the second phase. Its conditions include providing 70% of the financial structure with foreign banks, with arbitration being in Egypt but with room for change if both parties agreed. The price of the tariff per kilowatt is 8.4 cents.
The Ministry of Electricity seeks to establish solar power projects with a capacity of 2,300 MW and wind energy stations with a capacity of 2,000 MW.