Egypt fixes tariff for solar power plants usufruct rights at 2% of production

Six companies approached signing of contracts with governorates to establish stations worth $400m

The government decided to keep land usufruct rights tariff at 2% of energy produced per year.
Government sources told Daily News Egypt that the governorates have started to grant the lands, under their jurisdiction, to companies and investors to establish solar power plants on usufruct rights for 25 years. This is in return for 2% of the value of energy produced annually, which is the same value adopted by the New and Renewable Energy Authority (NREA) in its lands.
The sources added that fixed companies approached the signing of the contract to obtain land in the governorates of Minya, New Valley, and South Sinai on the usufruct system to establish solar power plants of 400MW and investments worth $400m, including Inara and Schneider Electric.
Renewable energy projects require access to land either through the NREA or the governorates.
The sources pointed out that the companies that signed a protocol of cooperation and preliminary agreements with the governorates of Minya, New Valley, and South Sinai will implement solar power plants with the system of net metering and independent producer, which includes the sale of electricity produced directly to consumers.
The sources added that the NREA also has large areas of land, but investors started to go to the governorates to get their land and sell electricity directly on the IPP system for factories, companies, hotels, and tourist villages, although the regulation of this system has not been issued so far.
Mohammed El-Khayat, head of the NREA, told the Daily News Egypt that the total area of land allocated by the state for renewable energy projects is large.
“There is an integrated coordination between the governorates and the new and renewable energy authority on this procedure,” he added.
He explained that the land is available to all investors. If the investor submits an application to the governorate, it will be transferred for approval from the NREA to establish the project and the Egyptian Electricity Transmission Company (EETC) to obtain approval for the connection to the network.
In an earlier statement, the Governor of South Sinai, Khaled Fouda, stressed that any investor who wants to build a solar power plant in the governorate will receive the land using the system of usufruct in exchange for 2% of the value of energy produced annually. He invited the companies to invest in the state plan to transform Sharm El-Sheikh into a green city.