Ministry of Electricity signs purchase agreement with solar companies

The minister has granted investors 10 days to complete the financial closing procedures; eight companies plan to implement feed-in tariff projects with investments worth $600m

The Ministry of Electricity has started signing purchase agreements Thursday with eight solar energy companies according to the feed-in tariff system.
Sources at the ministry disclosed that companies invited to sign agreements for the first phase of the feed-in tariff projects will begin signing with the Egyptian Electricity Transmission Company (EETC) from Thursday.
The sources told Daily News Egypt that the minister of electricity has decided to grant companies 10 working days starting today to complete the financial closing procedures for solar energy projects. This comes after the minister's meeting with representatives of Scatec Solar, Wadi Degla, Infinite Solar, FAS Energy, Irena, Alfa, Mag, and Dahma.
The sources pointed out that the purchase agreements approved by the State Council are now available to be signed by companies, according to the rules and regulations of the first phase of the feed-in tariff.
The total investments into the solar energy plants are worth $600m. Sources expect there to be 12 plants, ranging in capacity from 20MW to 50MW in Zafarana in the Red Sea and Benban in Aswan.
According to the terms and conditions of the first phase, in case of any disputes the feed-in arbitration will take place in the Cairo Regional Centre for International Arbitration. The company is obliged to provide 85% of the project financing in foreign currency, and 15% in Egyptian pounds. The tariff price will be 14.32 cents.
In Daily News Egypt's print issue for Wednesday 12 October, a list was published detailing the companies that were invited to sign the purchase agreement. These include the companies whose aforementioned representatives met with the minister.
The sources said that the ministry is committed to its announcement about the signing of the purchase agreement for the first phase until 26 October. Companies must respond with formal letters, whether by continuing with or withdrawing from the project, by the deadline on Friday.
Sources added that companies which fail to complete the financial closing will have a chance to sign in the second phase. The second phase regulations include providing 70% of the funding structure from foreign banks and arbitration in case of conflict will be in Egypt. The price of the tariff per kilowatt will be 8.4 cents.
The chairperson of one of the solar energy companies said that the minister's decision to grant companies up to 10 days to complete the financial closing has eliminated all tension and anxiety about the government's "loss of interest" in signing the agreement.
He explained that his company has completed all procedures and will sign the agreement with the Ministry of Electricity mid-week. He is currently seeking to complete the project's financial closing procedures.