Daily News Egypt

Electricity Ministry resolves contentious items with Toyota alliance to establish Gulf of Suez wind farm - Daily News Egypt

Advertising Area

Advertising Area

Electricity Ministry resolves contentious items with Toyota alliance to establish Gulf of Suez wind farm

Ministry agrees to arbitration abroad, buys energy at EGP 0.46 per KW/H

The Ministry of Electricity resolved the contentious items with Toyota-Orascom-GD France alliance to establish a wind farm in the Gulf of Suez to produce 250 MW. The contracts for the project will be signed in the coming weeks.

Sources at the ministry said that the ministry agreed with the alliance to move arbitration abroad with the consent from both parties. The location, however, has not yet been determined.

The source told Daily News Egypt that the ministry agreed to buy energy produced from the farm at EGP 0.46 per KW/H, making the price the cheapest for wind farm energy.

Moreover, the source added that the alliance has almost completed the financial aspect of the project and secured the necessary funding for the plant, noting that investments amount to €250m.

He pointed out that the alliance committed to the terms, regulations, and price set, even though they was proposed before the flotation; hence, the government agreed to move the arbitration’s location.

The Ministry of Finance had approved the government’s guarantee of payment in case of dispute over the establishment of the Gulf of Suez wind farm with a capacity of 250 MW.

Based on the ministry’s decision, the state will be responsible for providing official financial guarantees to pay the companies’ dues if the Ministry of Electricity fails to pay the price of energy produced. Such guarantees are always provided for projects agreed to be implemented by the private sector.

The Ministry of Electricity will buy energy produced from the station for 25 years at a price that was agreed upon in accordance with the offer made in the tender. Furthermore, the ministry will sell the produced energy to the distribution companies.

The Ministry of Electricity had negotiated with GD France, Toyota, and Orascom after its negotiations with Lekela Power-Actis, which presented the lowest prices, were stalled because the company did not complete the procedures and requirements announced by the ministry.

The ministry seeks to produce 20% of the total national electricity with new and renewable energy by 2020, as part of the ministry’s plan to diversify its sources of energy production and sustainable development in the sector.

The Ministry of Electricity announced that it would not contract directly with any company to build renewable power plants. Instead, it will propose competitive tenders and the company which offers the lowest prices will win the tender.

Advertising Area

Breaking News

No current breaking news

Receive our daily newsletter