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Government modifies contracting system with Siemens to establish wind energy stations for €2bn - Daily News Egypt

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Government modifies contracting system with Siemens to establish wind energy stations for €2bn

New system is BOO instead of EBC Finance, negotiations ongoing to purchase produced energy

=The government has decided to amend its contract with Siemens to establish a wind energy stations with a capacity of 2000 MW and investments worth €2bn to operate according to the build, own, operate (BOO) system instead of the EBC Finance system.

Government sources told Daily News Egypt that the Germany company has started negotiations with the Egyptian Electricity Holding Company (EEHC) and the Egyptian Electricity Transmission Company (EETC) regarding the tariff to sell the electricity produced from the stations planned to be launched. An agreement was reached on the tariff to be less than 3.8 cents for each kWh.

The sources added that German Siemens will start implementing two phases of the projects whose capacity is estimated to be 2,000 MW, as it is establishing a station with a capacity of 180 MW in Ras Gharib, and another in Suez Gulf with capacity of 650 MW.

The sources explained that the negotiations are ongoing to purchase the energy planned to be produced with a capacity of 830 MW, in addition to discussion regarding the rest of the capacities with a capacity of 1,170 MW.

The sources said that the government has strong bonds with the German company, and the proof is the company’s responsiveness to the request of the holding company regarding amending the contractual system of the project.

Siemens has completed launching three traditional electricity plants with a capacity of 14.400 MW worth €6bn, which is a low value compared to the technology and fuel available and produced by the plants, however, the company’s desire to implement projects and cooperate with Egypt has not stood in the way of completing the contract and adhering to the timetable.

The sources expected the agreement with Siemens to be concluded and the contracts to be signed to establish the wind energy stations before the end of this year, especially that the German company has received the land and carried out studies and calculations at the location of the project in Ras Gharib and Suez Gulf.

Even though the New and Renewable Energy Authority (NREA) has sought to agree with banking bodies to manage funding the first phase of the project with 180 MW capacity and investments of €180m, the lack of liquidity in the EETC has prevented this.

The EEHC signed an agreement with Siemens in 2015 during the economic conference in Sharm El Sheikh to establish wind energy stations with capacities of 2000 MW.

Egypt is planning to generate 20% renewable energy of the total produced amounts by 2022. Egypt’s current Energy production is estimated to be 44,000 MW, including about 2,400 MW produced from water, accounting for 5.5% of the amount, in addition to 1000 MW from wind energy, and 170 MW from solar energy—an equivalent of 2.6%.

The sources pointed out that the awaited projects will be implemented with the BOO system and investors will implement and fund, and the EETC will purchase the energy produced from the project.

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