The Ministry of Electricity intends to increase the value of the cost-sharing agreement for solar energy projects by 30% following the flotation of the Egyptian pound in November.
An official at the ministry said investors in the feed-in tariff scheme have paid two instalments of the cost-sharing agreement, with one instalment left.
Following the flotation, the prices of infrastructure equipment increased, and the ministry has decided to not bear the increased cost, but will impose it on investors, the official explained.
The cost-sharing agreement is one of the five agreements eligible investors are expected to sign to establish new and renewable energy projects. The cost-sharing agreement also involves the cost of connecting the planned solar power plants to the national grid and to the infrastructure in Benban, Aswan.
The official pointed out that the increase will be added to the final instalment of the agreement, which the Egyptian Electricity Transmission Company aims to collect from investors next month, especially as Xdegemac Company is nearing the completion of transformer stations in Benban, which will transfer the projects’ electricity to the national grid.
The Ministry of Electricity signed the cost-sharing with 39 solar power companies, though 19 companies decided to exit the projects. The remaining 20 companies are still on the project timeline with one instalment left to pay.
According to the agreement, the investors will pay EGP 3,100 per MWh generated, which will be spent by the state to build roads to the project. Other aspects of this project carry different costs. The connection with transmission stations has been valued at EGP 583,000 per MWh.
The Egyptian Electricity Transmission Company has contracted with Xdegemac to establish four transformer stations to transfer the produced electricity from solar energy projects in Benban, Aswan to the national grid. The down payment for Xdegemac was funded by the fees collected from investors in the cost-sharing agreement.