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The launch of new and renewable energy projects in 2017 Companies confirm the attractiveness of the investment sector and demand additional incentives and acceleration in the proceedings
Investors in the new and renewable energy sector have high expectations for 2017 to be a year of progress and to mark the beginning of implementing solar plant and windfarm projects. Investors believe that the new and renewable energy market in Egypt is an attractive market for investment, but needs fast procedures and additional incentives and legislation to bring international companies to invest in the energy sector. Human and managerial resources manager at Infinity Solar Systems, Hesham El-Gamal said that the Ministry of Electricity has spent the whole last year studying the economics of new and renewable projects and the decline of the mechanisms that organise the investment process. He added that this year will see the launch and progress of projects, explaining that new and renewable energy projects need a clear vision, especially since all foreign investors are waiting for the result of the first phase of the feed-in tariff, in which nine entities signed an agreement to buy energy from the nine companies with the Egyptian Electricity Transmission Company (EETC). He stressed the need to provide additional incentives and benefits for companies to attract foreign companies, especially in light of the existence of other markets such as Jordan and the United Arab Emirates (UAE), which offer many incentives for investors to achieve sustainable development. He called on the Ministry of Electricity to reconsider the tariff purchase of wind power because it is unprofitable and has no return on investment, and to reduce the value of cost-sharing and letters of guarantee for the submitted projects. The Ministry of Electricity seeks to contract on power production projects from renewable sources such as solar and wind power plants, through the private sector, according to the feed-in tariff system, with a capacity of 4,300 MW and investments of up to EGP 7bn. Mohamed El-Daley, project management director at Desert Technologies Company, said that 2017 will not witness any additional new and renewable energy projects. Agreements and the adoption of the contracts that have been signed over 2016 will be completed, along with the completion of talks on the second phase of the feed-in tariff. He explained that the government plays a big role this year in sending a message of reassurance to investors about the seriousness of implementation of projects, especially since companies that had invested in the renewable energy sector two years ago did not begin the actual steps to implement their projects so far. He called on the Ministry of Electricity to facilitate the procedures for investors, and to provide incentives to encourage investors not to head to other markets such as Jordan, the UAE, Iran, and Morocco. Egypt has a great opportunity to make progress in the renewable energy sector during the current year in light of the participation of more than 100 local and international companies in the feed-in tariff and competitive tenders offered by the EETC to establish solar and wind plants with a capacity of 550 MW, he stated. Hassan Amin, regional manager for Aqua Power Company, said that the investment opportunities in the field of renewable energy in Egypt are considered unique, especially since a number of foreign countries have come close to achieving self-sufficiency in the production of alternative energies. He explained that the government is required to develop a strategy for the energy sector to ensure the inflow of investments, especially since the liberalisation of the exchange rate. The flotation was a good decision, and must be followed by further decisions to attract investors, including the identification of amount of investment Egypt needs during the coming period. He pointed out that this year will see a development in the implementation of solar energy projects. Companies that complete feed-in tariff projects are seeking to raise financing for the projects. The tariff structure should be reconsidered to encourage investment, he explained. Ahmed Ayyad, project manager at Philadelphia Energy, said that among the motivating factors to establish a solar power plant in Egypt is the feed-in tariff system, but so far, there is no clear vision to it. Ayyad continued that the delayed procedures negatively affect projects, and that the New and Renewable Energy Authority should consider the Jordanian experience in tariff projects. He predicted that the current year will witness an evolution in the completion of the second phase of the power purchase agreement in the feed-in tariff projects to be signed with investors, and to be actually implemented.
