The Ministry of Electricity has received three offers from Arab and foreign companies to implement new and renewable energy plants under the independent power producer (IPP) system with investments worth $400m.
Sources at the ministry told Daily News Egypt that three companies—Egyptian, Emirati, and Chinese—have submitted requests to implement electricity production projects from solar and wind energy under the IPP system. This system includes investors contracting directly with consumers, as the contracting company will repay, together with consumers, the energy transfer fees for using the national electric grid to the ministry.
The sources explained that a committee formed by the Ministry of Electricity and the New and Renewable Energy Authority (NREA) will examine the offers submitted to it in order to file a report about it to Minister of Electricity Mohamed Shaker, especially since the electricity law has allowed the production and selling of energy to the private sector under the IPP system.
The sources said that the ministry seeks to implement new and renewable energy projects within its strategy to produce 20% of total electricity produced by 2020.
The ministry seeks to contract with investors in accordance with two systems. The first relies on competitive bids through the Egyptian Electricity Transmission Company using the build, own, operate (BOO) system. The second is IPP, which includes investors selling the produced energy directly to consumers.
An official at one of the companies making its offers told Daily News Egypt that his company has solar energy projects in Benban, Aswan within the solar energy feed-in tariff project. It has received several requests from companies and factories to look into the possibility to obtain electricity directly.
According to the electricity law, each subscriber has the freedom to choose their own electricity provider. The competitive electricity market is based on free competition. Through this, qualified subscribers can contract with electricity production companies or accredited distributors through dual contracts to provide the required electricity needs.
In a related context, Hassan Allam Group will be signing contracts for the management of a solar energy project in Benban within days, after the completion of the contract review.
The company will set rules and regulate all project requirements, including water, sanitation, tree planting, labour employment, housing, infrastructure, traffic, and community services.