Ministry of Electricity presents new and renewable energy projects situation to cabinet

Companies call for amending feed-in tariff, reducing land use by 1%, abolishing value of cost-sharing agreement

The Ministry of Electricity will present a detailed memorandum to the cabinet within two weeks, which includes the situation of new and renewable energy projects and demands of investors to complete the projects.
Government sources said that the memo includes a report of electricity production surplus at the moment, which amounts to 4,000 MW a day. It also tackles the latest discussions regarding the Gulf of Suez wind farm which will be implemented by Toyota alliance, and the demands of investors regarding renewable energy feed-in tariff projects.
The sources added that energy companies taking part in the second phase of the feed-in tariff filed formal requests to the New and Renewable Energy Authority (NREA) to amend the solar energy projects tariff. They also want to reduce the specified value for land use by roughly 1% of the produced energy, and abolish the value of cost-sharing related to road works and transformer stations.
The investors seek to amend the structure of payment in the solar energy tariff, which is related to fixing 30% of the tariff value at the price EGP 8.8 to the US dollar. The new amendment will be based on the dollar exchange rate on the due date of repayments.
The sources explained that the memorandum will ensure the position of the companies that signed the power purchase agreement with the Egyptian Electricity Transmission Company (EETC). It will also include demands of investors by announcing the financial models of the companies that have been approved, in order to start implementation.
The Ministry of Electricity sent contracts and agreements signed with investors in the first phase of the feed-in tariff to the cabinet a week ago for approval, but the cabinet had not approved it so far.
The sources said that the memo includes the latest discussions with the Toyota alliance to set up a solar power plant in the Gulf of Suez at a capacity of 250 MW. All legal and financial aspects have already been agreed on, but the method of dues repayment—which the alliance wishes to obtain in dollars, not in Egyptian pounds—remains undecided.
The Ministry of Electricity has started negotiations with the GD France, Toyota, and Orascom Construction alliance, after the final agreement with the alliance of Akila and Acti, which presented the lowest prices, faltered.
According to sources, the memo presented by the Ministry of Electricity to the cabinet includes an explanation to the reasons behind the delay of contracting for new and renewable energy projects. The delay is due to the inability of the national grid to accommodate the planned production capacity, and that it requires upgrade and expansion.
The EETC is unable at the time to contract with all companies on the purchase of energy produced from their projects in light of the lack of financial liquidity problem—which is one of the main reasons for the delay of tenders and non-implementation of the project so far.