Egypt issues new 600-MW tender
Thursday, Dec 14, 2017
Egypt has issued a 600-MW tender seeking to procure new photovoltaic (PV) solar projects.

The New and Renewable Energy Authority (NREA) and the Egyptian Electricity Transmission Company (EETC) are offering the tender under a build-own-operate (BOO) contract for solar projects, to be located west of the Nile in the areas of Minya and Aswan.

A deadline of January 14, 2018, has been set for local and foreign companies to apply for prequalification. The companies must have experience in the design, financing and construction of PV systems and must have built at least three solar plants of a minimum of 100 MW. Bidders must also submit audited financial statements from the last three years.

Contract awards are expected during the first quarter of 2018.

Electricity produced at the sites will be purchased by the EETC under power purchase agreements (PPAs). After the 25-year operating period the land and project will then be returned to the NREA.

Notably, this 600-MW procurement is outside of Egypt’s flagship renewables procurement system – its feed-in-tariff (FiT) scheme. During the first two rounds of the FiT program, Egypt allocated some 2,000 MW of PV capacity, most of which will operate under 25-year FiT contracts and will be located over multiple projects at the Benban solar complex, near Aswan. When complete the 1,800-MW capacity site will be the world’s largest solar facility.

Egypt began its FiT procurement in 2014 with the aim of contracting 4,300 MW of wind and solar capacity between 2015 and 2017. By 2022, it intends to source 20% of its electricity from renewables. Yet issues over dispute resolution clauses and the depreciation of the Egyptian pound have held back many of the first-round FiT projects.

With these issues mostly addressed, and international lenders back on board, the forecast for the FiT and indeed in the latest tender are more positive. Last month, the European Bank for Reconstruction and Development (EBRD) became the single largest investor in renewable energy in Egypt when it agreed to finance 16 solar plants, worth some 750 MW, at the Benban complex. Financing was provided under the bank’s US$500 million framework for renewable energy in Egypt program, designed to stimulate and support wider private investment.

Furthermore in October, the EBRD, the Green Climate Fund (GCF), the Islamic Development Band (IDB), the Islamic Corporation for the Development of the Private Sector, and the Dutch development bank FMO said they would provide US$335 million in funding to support Norway’s Scatec Solar in building six 50-MW plants in Benban.

Previous reports from local media have suggested that further tenders may be offered next year, and may include wind. NREA head Mohamed El-Khayat told Daily News Egypt in mid-November that the organisation would offer 400 MW of new and solar capacity in 2018, but NewsBase Intelligence (NBI) has been unable to confirm whether this is still planned, or whether procurement will be confined to this most recent solar announcement.

This NewsBase commentary is from our REM publication. To sign up for your free trial, click this link: https://newsbase.com/publications/rem-renewable-energy

Read more NewsBase top stories via this link: http://bit.ly/2h95NUx
Find out more about Renewables from NewsBase