A new tender issued by the Egyptian Electricity Transmission Company will bring 600 MW of large-scale solar projects to the West of Nile area. It is the first auction to take place under the country’s new auction mechanism.
During the course of the past few months, the Egyptian government has developed and announced a new auction mechanism for renewables. Now, the first tender under this new scheme has been issued by the Egyptian Electricity Transmission Company (EETC). It will assign 600 MW of solar capacity to developers that will then turn it into solar parks in the West of Nile area.
Tender currently open for bids
This new tender follows Rounds 1 and 2 of the FIT programme. It invites interested developers to submit their pre-qualification documents, i.e. their technical and financial bids, which will have to be received by the EETC in mid-January at the latest. In order to qualify, investors must have previously installed at minimum of three solar plants of at least 100 MW each. Those projects to get selected will be built under the Build Own Operate (BOO) policy. They will also receive long-term PPAs with the EETC.
2 GW of solar capacity allocated in Rounds 1 and 2
Rounds 1 and 2 of the FIT programme added around 2 GW to the country’s overall capacity. The majority of these projects will receive a 25-year FIT contract. Most of them will form part of the Benban solar complex, which has a capacity of 1.8 GW and is located in the Aswan region of Egypt’s North.
Ambitious plans for country’s energy future
The Egyptian government plans to cover 20% of the nation’s energy supply through renewables by 2022. This is an ambitious goal, however, new projects are constantly adding to the country’s overall capacity. Financial support from different international sources may help in the process. The European Bank of Reconstruction and Development, for example, decided in October that it will provide financial help to bring along 16 new solar projects in Egypt, with a total capacity of 750 MW. Also, the International Finance Corp announced their support for the development of 13 new solar parks.
Nonetheless, developers investing in Egypt are facing obstacles as well. The devaluation of the Egyptian dollar impedes the financing conditions for new projects. Where the FIT was calculated in Egyptian dollar and debt was due in USD, local banks where finding it hard to provide financing.