Seven energy companies—Egyptian, Saudi, Emirati, and Chinese—are considering withdrawal from the second phase of the solar power feed-in tariff projects.
Sources said that companies believe that the non-completion of projects is the best solution, especially as electricity produced by the solar plant is sold at a low charge, as well as the increased amount of sharing the costs of road works and linking the additional capacities to the national electricity grid.
Sources explained that the seven companies obtained lands in the Banban region in Aswan to launch solar power plants at a total capacity of 350 megawatts—50MW per company—with total investments worth $400m.
According to the sources, companies have begun talks and discussions with the Egyptian Electricity Transmission Company (EETC) and the New and Renewable Energy Authority (NREA) to discuss the possibility of amending some of the items in the structure of the solar energy feed-in tariff projects. The guidelines and conditions of the second phase of the feed-in projects were announced before the Central Bank of Egypt’s (CBE) decision to float the pound.
The conditions of the second phase of the feed-in tariff projects include financing the solar energy projects with 70% from foreign sources of funding and 30% from local sources of funding.
The repayment method of the solar energy projects includes 30% of the value of the tariff at a price of EGP 8.88 (the dollar exchange price at the issuance time), and 70% of the value of the tariff is charged according to the price of the dollar’s exchange price against the pound on the repayment date.
According to the energy purchase agreement, in case of a dispute between the EETC and investors, the arbitration will take place in Egypt with the possibility of being moved outside Cairo, if both parties agree to do so.
33 companies and alliances are taking part in the second phase of the feed-in tariff projects, according to Ehab Ismail, director of planning department at NREA.
Companies taking part in the second phase of the feed-in tariff projects include Infinite Solar, Alfa Solar, TAQA Arabia, Orascom Construction, ACWA Power, Philadelphia Solar, Sun Infinite Energy, Alcazar Energy, Elsewedy Electric, Phoenix Power, and Access Power.