The New and Renewable Energy Authority (NREA) is currently in talks with five local banks to obtain a revolving loan worth EGP 1bn to finance solar power projects with capacities of less than 500 kW.
Sources from the NREA said that it is negotiating with Banque Misr, the National Bank of Egypt (NBE), and the Commercial International Bank (CIB, to provide a revolving loan with the aim of encouraging the use of solar energy among residents and institutions.
The revolving loan is an arrangement which allows for the loan amount to be withdrawn, repaid, and redrawn again in any manner and any number of times, until the arrangement expires.
The sources pointed out that a number of banks have financing programs for solar power plants, but they are inactive. The interest on these loans ranges between 12% and 14%, contrary to earlier media reports that it will not exceed 8%.
They further added that the NREA seeks to ease procedures of establishing solar power plants through the revolving loan with an interest rate of not more than 6% for house and commercial uses.
The authority intends to put clear rules for obtaining loans to ensure the continuity of the funding programme.
Egypt’s home electricity subscribers amount to 21 million. According to government reports, there are 180,000 residential subscriptions with monthly consumption of no less than 1,000 kW. The installation of solar panels in houses and linking them to the grid does not add any additional burdens on the state, but it requires financing facilities.
The sources explained that the participants can install solar panels on the roofs of their houses to provide their needs of electricity and sell the surplus of production to the nearest electricity distribution company.
They stressed the importance of establishing more solar power plants in the coming period, especially as the government has announced a plan to lift energy subsidies gradually, adding a burden on citizens.
The sources said that the installation of solar panels on the roofs of buildings takes six weeks, and linking the produced energy with the national grid takes 14 days. This system does not require land, transformers, or high voltage lines, and is considered the fastest way to turn to using clean energy.